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Intelligence in a transnational environment

Intelligence in a transnational environment
National Security Summit, Vibe Hotel Canberra
31 August 2016
2.50pm

Introduction

Thank you for providing me with the opportunity to address this important summit.

I would like to acknowledge the traditional owners and custodians of the land on which we are meeting today. I would also like to pay my respects to the Elders both past and present.

As we’ve heard already, the world is becoming more connected and the border is becoming less defined. Serious and organised crime is transnational and we estimate that up to 70 per cent of serious and organised crime targets affecting Australians are either based offshore or have offshore links.

Serious and organised crime is growing in sophistication and constantly adopting new and advanced technologies to undertake illegal activities.

It is expanding its reach globally and infiltrating new markets— both legitimate and illegitimate—in order to increase the opportunities to generate illicit wealth. It works to conceal unlawfully derived profits, seeking to intermingle those funds with legitimately earned money.

Serious and organised criminals are involved in a range of criminal activities that involve the movement of commodities across physical borders including illicit drugs, firearms and human trafficking.

They also exploit virtual borders by using the Internet and other technologies to target the community through activities such as online scams, cybercrime and the theft of personal identity information stored electronically.

These activities significantly affect the wellbeing of families and communities across Australia. Serious and organised crime diverts funds out of the legitimate economy and undermines the profitability of lawful business. This money is instead lining the pockets of criminals.

Our Costs of Serious and Organised Crime publication estimates it cost Australia $36 billion in 2013-14.In addition to the cost of law enforcement efforts, there are also costs associated with managing social harms, and the loss of legitimate business and taxation revenue. Serious and organised crime also compromises the health, safety and wellbeing of individuals and communities. 

Today I’m going to talk to you about the nature of transnational organised crime and how the Australian Criminal Intelligence Commission provides support to partner agencies, including through our coercive powers. I’ll also share some examples that demonstrate the importance we place on intelligence sharing and cooperation to assist operational outcomes.      

The Australian Criminal Intelligence Commission

The Australian Government warned in late 2015 there was evidence of an unprecedented threat to Australia from terrorists and criminals who were exploiting gaps in law enforcement information holdings to avoid detection.

Our agency, the Australian Criminal Intelligence Commission (ACIC) was formed to strengthen Australia’s ability to combat this threat.

We are uniquely equipped as Australia’s national criminal intelligence agency with investigative and information delivery functions, with ICT specialists working side by side with our nation’s top intelligence analysts to pursue criminal and national security threats.

We create a national intelligence picture of crime, target serious and organised crime, deliver information capability and services to front line policing and law enforcement, and provide crime and justice research that produces an evidence base for addressing crime in Australia.

We aim to reduce the impact of serious and organised crime on the community, by making it harder for criminals to operate in Australia.

We do this by disrupting, disabling and dismantling criminal enterprises through effective enforcement, regulation, policy and legislation.

The ACIC has a very potent intelligence collection capability in the form of our coercive powers—essentially being able to compel an individual, corporation or Commonwealth Government agency to produce documents or other information.

But we also have a range of other collection capabilities, including human source, telecommunications interception, technical and physical surveillance and cyber forensics.

These capabilities provide us with the means to access a broad range of information and data from across the public and private sectors.

We then exploit this information through the application of advanced analytical tools to find out more about the known criminals and to discover criminal activity and previously unknown targets.

Our priority is to close the gaps that currently result in an inability for Australia’s law enforcement and other agencies, to quickly and efficiently share all the information and intelligence they gather with each other.

This is what the ACIC’s national criminal intelligence system, or NCIS, will do.

The system will revolutionise the way in which law enforcement officials around the country operate.  They will gain enhanced and richer information and intelligence, much faster.

For example, a police officer who stops a vehicle will be able to learn much more about the driver, and police faced with an armed offender in a siege-type situation will gain faster access to the background of the hostage taker.

While a full build of NCIS is some time away, the NCIS Pilot Program has already consolidated more than 100 million records and 30 million master records from 400 data sources.

Extrapolate that to everyone who could have access to NCIS in the future and the additional data that could be connected into it, and you begin to see a very clear picture of what our agency can deliver to law enforcement across the country.

It is important to reflect, though, that our systems are not just about metadata and enterprise solutions. It’s about what we build and deliver to our law enforcement partners to safeguard us, our friends, our family and our nation.

Globalised crime

But how does all this work in a global environment?

Crime is transnational, so it’s important to have a global law enforcement approach.

The ever-changing criminal and technological landscape requires advancements in law enforcement information and intelligence sharing arrangements to combat serious and organised crime.

We recognise the global nature of crime and are expanding our international footprint to complement and work in collaboration with the international networks of domestic partners.

We have analysts posted internationally—Hong Kong, Dubai, Ottawa and Virginia in the USA.

This capability connects our international partners to the Commission’s broader information gathering capabilities to provide our international partners with an Australian threat and risk picture—and to build relationships to further enhance information and intelligence exchange internationally.

An important part of strengthening and expanding our international reach is through our role in the Five Eyes Law Enforcement Group, which consists of heads of major law enforcement agencies from the United States, United Kingdom, Canada, New Zealand and Australia.

The group’s principal focus is to create a collective, collaborative and unified ‘Five Eyes’ approach to the threat and harm of serious and organised crime of mutual interest.

As part of this we are involved in working groups which look at money laundering, criminal intelligence, cybercrime and technical infrastructure.

Through these working groups we exchange information and intelligence to create a picture of current and emerging threats and risks by leveraging country or inter-agency expertise, information and tools to create a hostile environment for organised crime.

When it comes to transnational serious and organised crime, it takes a networked approach from multiple agencies and multiple countries to tackle the threat posed by these global syndicates.

Through our international and national collaboration we continue to build a richer national picture of serious and organised crime. We share intelligence products, participate in joint operations and investigations and work to disrupt criminal behaviour and criminal entities.

Cybercrime

We describe cybercrime as a crime involving an intrusion on a computer, system or network.

The internet, computers and mobile devices are an integral part of everyday life and cybercriminals have seized the opportunity to exploit Australian victims.

Cybercriminals based offshore are reaching into businesses, homes and personal lives from a distance. These criminals invade our lives by interjecting themselves into the everyday online business of Australians. Things that are now simply a way of life for all of us—the place where we do our banking, read the newspaper, share photos on social media, do our shopping, and email our friends and family.

The Cyber Security Review, led by the Department of the Prime Minister and Cabinet, found that cybercrime is costing the Australian economy up to $1 billion annually in direct costs alone, with conservative estimates of around $17 billion per year overall.

In response to this the Australian Cyber Security Strategy, released in April 2016, allocates $230 million to enable innovation, growth and prosperity.

The strategy focuses on five key themes—a national cyber partnership, strong cyber defences, global responsibility and influence, growth and innovation and a cyber smart nation.

As part of the strategy, the ACIC received $16m over four years to expand our cybercrime intelligence capability both within our agency and as part of our role with the Australian Cyber Security Centre. This will equate to 25 additional personnel.

Breaking the business model of cyber criminals requires a focused, joined up effort. We need to disrupt and deny cyber criminals through an end-to-end approach with partner agencies including the AFP and Computer Emergency Response Team (CERT) Australia, as well as State and Territory agencies.

We are also part of the Australian Cybercrime Online Reporting Network (ACORN) which is a national policing initiative of the Commonwealth, State and Territory governments.

It allows the public to easily report instances of cybercrime. It also provides advice to help people recognise and avoid common types of cybercrime.

Launched in November 2014, ACORN has received nearly 66,000 reports, of which online scams and fraud make up 49 per cent. Within this, the key types of fraud being reported are online purchase and sales, contributing 21 per cent.

However, this approach is not complete without working closely with international partner agencies, in particular the European Cybercrime Centre (EC3) in The Hague where international law enforcement partners co-locate and support international cybercrime intelligence operations with no borders. We also have analysts deployed to the FBI’s International Cyber Crime Coordination Cell in Virginia, USA.

The funding we have received is reflective of the critical, enduring nature of the cybercrime threat, which will only grow over the coming years.

Money laundering

Financial profit is overwhelmingly the motivating factor behind organised crime. Through information sharing agreements with international law enforcement agencies, we look to identify those that move these funds around the globe—the money launderers.

The ACIC’s targeting criminal wealth No.2 Special Investigation is designed to disrupt and deter criminal groups by collecting evidence and intelligence about financially motivated crime.

Organised crime groups rely on money laundering as a way of legitimising or hiding both the proceeds and instruments of crime.

Money laundering is a pervasive, corrupting process that stretches across the mainstream economy, including the banking sector, international funds transfers, foreign exchange services, casinos, online gambling, and the markets that deal in commodities such as stocks and shares, artwork, jewellery and real estate—to name a few.

Money laundering also operates in areas outside the mainstream economy, such as the alternative remittance sector and other informal value transfer systems such as Hawala.

Many of these activities occur outside formal reporting structures relating to the movement of funds, with the majority of targets based offshore beyond the reach of Australian law enforcement and regulatory agencies.

The Eligo National Task Force—a joint initiative between the ACIC, Australian Transaction Reports and Analysis Centre (AUSTRAC), the Australian Federal Police (AFP), state and territory law enforcement, key Commonwealth agencies and international partners—was established to disrupt high priority international and domestic money laundering operators.

By ‘following the money trail’—in essence, targeting the flow of the funds used to purchase illicit drugs and the proceeds derived from selling them—the Eligo Task Force has achieved significant results
(to  31 July 2016), including:

  • seizure of more than $86 million in cash
  • restraint of more than $59 million worth of assets
  • identification of over 480 targets previously unknown to law enforcement
  • disruption of around 73 serious and organised criminal groups and networks
  • and the arrest of 465 individuals on 1077 charges.

So ‘following the money trail’ is much more than a cliché: it is proving a very effective means of discovering and understanding, and then informing our response to the organised crime environment.

Serious Financial Crime Taskforce

The Serious and Financial Crime Taskforce—established in June 2015—continues the work of Project Wickenby, a cross agency taskforce which played a pivotal role in the Australian Government’s fight against tax evasion and crime. 

The Serious Financial Crime Taskforce aligns the priorities and resources of Commonwealth law enforcement and regulatory agencies to target the highest risk priorities, through an intelligence-led approach within a sustainable governance framework.

A recent example of a collaborative approach is the co-ordinated national response to the Panama Papers being undertaken by Australian Government agencies. 

The Australian Taxation Office-led response involves the Australian Criminal Intelligence Commission, AUSTRAC, AFP, the Australian Securities and Investment Commission (ASIC) and the Australian Border Force to examine all aspects of Australian involvement identified through the leaked Panama Papers.

The collaborative effort of Commonwealth agencies is exploring the issues from both an immediate response and longer term preventative context.

 

While there is nothing illegal about Australian entities owning off-shore companies, clearly the opaque nature of the complex arrangements in place to hide beneficial ownership of assets is a concern for Australia. 

The lack of transparency of these complex company arrangements that leverage off multiple tax havens creates opportunities for tax evasion and the hiding of beneficial ownership of assets and affords an opportunity for serious organised crime to hide illicit wealth. 

This is why Australian Government agencies are working collaboratively to understand the extent of the abuse of these complex opaque arrangements, the role of intermediaries and off-shore service providers, and the extent to which tax is avoided and illicit wealth is hidden.

Illicit drugs

Motivated by greed and power, many criminal groups and individuals use the illicit drug market as their primary income stream, profiting from the misery illicit drugs inflict on the nation. When looking at transnational serious and organised crime threats, illicit drugs are ever-present.

 According to our most recent Illicit Drug Data Report, there was a record 105, 862 illicit drug seizures in 2014-15.

Over the past five years, intelligence and data continue to show an emerging national and international concern with methylamphetamine, particularly crystal meth (‘ice’).

In my 38 year career in law enforcement, I have never seen a substance as destructive as ice.

Serious and organised crime groups thrive on the profits generated through ice. The price paid for meth in Australia is among the highest in the world. This has driven interest in the market by transnational organised crime groups with access to offshore industrial-scale manufacturing, as well as by domestic organised crime groups.

According to the United Nations Office on Drugs and Crime the average street price per gram of meth in China is USD$80, whereas in Australia it is USD$500.

Wholesale prices in Australia have been recorded as ranging from
A$90 000 to A$325 000 per kilogram. Since 2010, the purity of meth has increased, making its use even more dangerous.

Despite this, prices have remained relatively stable. Nationally the price of a gram of non-crystal meth in 2014-15 ranged from $100 to $500, while the price of a gram of crystal meth ranged between $250 and $1200.

Transnational serious and organised crime groups feature prominently in the global meth market. These groups use multiple countries as transit points for trafficking meth and precursor chemicals to and from Asia and the Americas, Australia and New Zealand.

Drug trafficking syndicates from Africa and Iran, and others with links to China and Hong Kong, traffic meth into and through South-East Asia by air transport and sea cargo containers. Indian drug trafficking networks smuggle precursor chemicals to drug manufacturing locations in nearby countries. The Chinese meth market is also supplied by large-scale domestic production.

In 2015, we released an unclassified report, titled The Australian Methylamphetamine Market: The National Picture, which highlighted organised crime threats in the methylamphetamine market and their impact on the Australian community.

The report prompted development of broader Australian Government prevention and response strategies, laying the ground work for establishing a National Ice Task Force to develop strategies and recommendations to inform a National Ice Action Strategy.

One of the Taskforce’s recommendations is for greater international engagement. The ACIC is working with the AFP and Department of Foreign Affairs and Trade to strengthen relationships in the region and develop a new international supply disruption strategy.

To combat the threat of illicit drugs, and deliver a global response, we need a multi-dimensional approach. Law enforcement alone cannot fix the ice problem, which is why sharing our information and intelligence and working with other agencies and portfolios is so important.

There is a need to focus on prevention, early intervention, and treatment, building resilience, education, appropriate legislation and regulation, in addition to law enforcement.

Coercive powers

The Australian Criminal Intelligence Commission is established under the Australian Crime Commission Act 2002.

The Act provides the ACIC with access to coercive powers which are used in special operations and special investigations to obtain information where traditional law enforcement methods are unlikely to be or have not been effective. Information gained during our examinations can be very valuable to our partners.

Intelligence obtained through our coercive powers can be disseminated to international partners.

Our coercive powers can only be used in relation to operations and investigations that the Board has determined to be ‘special’. In determining whether an investigation or operation is special, the Board considers the effectiveness of other law enforcement methods in understanding, disrupting or preventing the criminal activity under consideration.

The ACIC’s coercive powers can be used to compel persons to give evidence concerning their knowledge of federally relevant criminal activity including terrorism offences and offences associated with Foreign Fighters.

This helps front-line agencies respond to the threat posed by terrorism and fill key intelligence gaps on the nexus between terrorism and organised crime.

There are significant penalties for not answering our questions truthfully. It is an offence for a person summonsed to attend an ACIC examination to fail to attend or fail to answer a question that they are required to answer by the examiner presiding over the examination.

In one example, the Federal Court imprisoned a young man—referred to in the media by his pseudonym ZZ— who chose not to answer our questions truthfully.

The detention was for an indefinite period, until he purged his contempt of the ACC.

He was released from prison after four weeks when he purged his contempt by answering our questions.

Our hearings are conducted in secret.

This is as much to protect the identity of the witness and the fact they are talking to us as anything else.

Witnesses are also able to claim protection so that the answers, documents and things they provide are not admissible in evidence against them except in certain limited circumstances.

Our access to coercive powers helps us to increase law enforcement’s understanding of existing and evolving threats posed by serious and organised crime.

Our general strategy regarding selection of witnesses to attend coercive hearings is to build an intelligence picture by calling forward individuals that we believe can add to our understanding of the issue at hand.

We tend to focus on individuals within the community that know what is happening, but are concerned about sharing this information with security and law enforcement agencies.

In many cases that will mean calling witnesses that are friends, associates or even relatives of the individual or group of prime interest to us.

Our hearings are also non-adversarial, designed not to alienate but to build community trust—a far more productive strategy in the longer term.

Outlaw motorcycle gangs (Morpheus)

Outlaw motor cycle gangs (OMCGs) are highly visible crime entities with a presence in all Australian states and territories. In recent years, we have seen considerable expansion both within Australia and overseas. 

OMCGs continue to exert significant influence over Australia’s illicit commodity markets. They engage in a wide range of serious crimes, including drug trafficking, money laundering, extortion, firearms offences and acts of high level violence.

The most recent assessment of OMCGs identified that there are more than 38 OMCGs operating in Australia, with about 4,700 patched members.

To address the ever present and growing threat of OMCGs, we are working collaboratively with a range of Commonwealth, state and territory partners to bring about not only improved understanding, but also to cause effective disruption to criminal gang activity.

This collaboration is reflected in initiatives such Operation Morpheus and the ACIC’s leadership of the Australian Gangs Intelligence Coordination Centre (AGICC) which services the intelligence requirements of the AFP-led National Anti Gang Squad (NAGS).

Operation Morpheus was established in September 2014 and is targeting OMCGs using both traditional and non-traditional law enforcement methods, including executing warrants on club houses, investigating tax and welfare payments, monitoring their travel movements and business activities. 

Operation Morpheus is also targeting the professional facilitators of serious and organised crime—for example the lawyers and accountants who assist OMCG members to carry out their illegal activities. 

Since its establishment to March 2016, Morpheus has resulted in:

  • 2042 arrests
  • 5304 charges
  • more than 1001 search warrants

Seizure of:

  • approximately 2.3 kilograms of cocaine
  • approximately 2.8 kilograms of amphetamine and 50,000 pills
  • approximately 211 kilograms and 3 litres of Methamphetamine
  • 424 firearms and other weapons, and 21750 rounds of ammunition
  • more than 2670 Traffic Infringement Notices issued;
  • 29 motor vehicles, 1 light aircraft, 1 boat and 22 motorcycles seized;
  • more than 440 kilograms of drugs seized
  • over $4.4 million cash seized.

Visa strategy

The Department of Immigration and Border Protection visa strategy aims to reduce the threat OMCGs pose to Australia by either refusing or cancelling the visas of individuals who fail the ‘character test’ as defined in the Migration Act 1958 (Section 501).

The refusal of entry to Australia or exclusion from Australia of non‑citizens who represent a risk of engaging in criminal activity in Australia will significantly disrupt several criminal enterprises, leading to a reduction in the overall threat represented by these groups.

A secondary objective of this strategy is to increase public confidence by showing that the Australian Government takes the threat of OMCGs and organised crime seriously, and is using different means at its disposal to respond to the threat.

Members of serious and organised crime gangs, other than OMCGs, are also being targeted by this strategy. More than 105 organised criminals have had their visa cancelled or refused.

In June 2014, Alex Vella, then National President of the Rebels Motorcycle Club, was the first OMCG member to have his visa cancelled on character grounds (under s501 of the Migration Act). It was cancelled after an overseas trip to Malta—his home country.

Vella was the head of the largest OMCG in Australia for more than four decades. The Rebels have chapters in each state and territory and also overseas. This was a great example of how government agencies can work together and think globally to achieve results.

Conclusion

My vision for a safer Australia is one that is better connected, informed and capable of responding to crime and criminal justice issues. It is my conviction that law enforcement in Australia has to better harness its collective resources and improve its ability to share essential policing knowledge and information.

The accelerating nature of change in criminal investigation, forensic science and technological environments require us to improve our information sharing arrangements so that intelligence and operational officers from across the country have access to real-time, factually based data, drawn from multiple sources.

We have a clear purpose and mission to make Australia safer by connecting, discovering and understanding our responses to crime and we must get the right connectivity to the front-line police to ensure they have the right knowledge and information to do their job.

Thank you.

Last updated
11 April 2017