International Law

Management of companies and provision of credit by organised criminal groups

Senator Nick Sherry, Minister for Superannuation and Corporate Law, has announced details of an agreement between the Commonwealth and States and Territories at the Ministerial Council for Corporations relating to concerns over the use and management of companies by organised criminal groups (OCGs).

In addition, the Commonwealth has announced that as part of the forthcoming National Consumer Credit Protection regime, the Australian Securities and Investments Commission (ASIC), the new national credit regulator, will be specifically tasked with preventing members of OCGs from receiving an Australian Credit Licence.

The current law automatically disqualifies from company management persons convicted of certain offences related to dishonesty that attract penalties of at least three months imprisonment.

The Commonwealth has suggested five options :
(i) retaining the status quo;
(ii) introducing a fit and proper person ground of disqualification;
(iii) extending the scope of automatic disqualification to include specified categories of offences;
(iv) extending the scope of automatic disqualification to include all serious offences;
(v) creating a national register of disqualified persons.

NSW supports option (iii): it suggests that the grounds for automatic disqualification in section 206B of the Corporations Act 2001 be expanded to cover convictions under certain New South Wales provisions regarding criminal organisations and criminal groups.

The National Consumer Credit Protection Bill will be released for public exposure at the end of April.

Full post as published by Australian Regulatory Compliance Review on April 18, 2009 (boomark / email).