There are also two offences (again one for a single payment and one for a series of payments) within the category of offences with a fault element, and they apply in the same circumstances as discussed in previous article. In fact, the relevant wording is identical, but for the absence of the strict liability and the level of penalty imposed. Refer to proposed S.13 of the Bill.
In this case, as no fault element has been specified for the offence, the standard fault element for circumstances is recklessness. Refer to S.5.6(2) of the Criminal Code. For these purposes, a person is reckless where they are aware of a substantial risk that a circumstance exists (or will exist) or a result will occur, and having regard to the circumstances to them, it is unjustifiable to take the risk. In the current context, this means that an entity will only commit these offences if, in addition to satisfying the requirements for the strict liability offences, the entity knew that there was a real risk that the payment would result in the total amount of cash being paid or received, either equaling or exceeding, the cash payment limit. Refer to paragraph 1.53 of the Explanatory Memorandum.
Penalty
The prescribed maximum penalty for each of these offences with a fault element is substantially higher than those that apply for the strict liability offences, being two years of imprisonment and/or a fine of 120 penalty units each (i.e., $25,200). The higher penalty is intended to reflect the greater level of culpability involved in deliberately or recklessly breaching the cash payment limit.
Whilst the strict liability offences are there to ensure compliance with the limit, the recklessness offences apply to penalize entities that have consciously and deliberately decided to risk violating the cash payment limit.
What is considered to be ‘cash’ for these purposes?
It is defined to mean both digital currency and physical currency. However, the Government intends to have transactions involving digital currency (e.g., Bitcoin) to be exempt from the cash payment limit at current stage, until such time as the use of digital currency changes to a point that presents a material risk of facilitating the same sorts of avoidance of obligations currently facilitated by physical currency.
Furthermore, the value of the ‘cash’ provided is to be determined at the time of the payment, which is its face value as currency. To the extent cash may have value other than as a medium of exchange (e.g., a collectible coin), it is irrelevant for the purpose of the cash payment limit.
In cases where the payment involves an amount of foreign currency or digital currency, it is expected that the Treasurer will provide methods for how to work out the value of such cash payments in Australian dollar in due course.
To whom and where does the new cash payment limit apply?
These new offences apply to all entities. The definition of an ‘entity’ for the purposes of the cash payment limit is the same as the definition in S.960-100(1) of the ITAA 1997. Broadly speaking, those offence will only apply where the conduct constituting the offence occurs in Australia or on board an Australian aircraft or ship; and the offence will only apply if the payment(s) that constitute the offence is wholly or partly for a supply and the supply is made wholly or partly in Australia.
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