Original refusal:-

Correspondence: AUSTRAC, C/- Attorney-General’s Department, 3-5 National Circuit Barton ACT 2600
P: +612 6120 2600 F: +612 6120 2601 www.austrac.gov.au
Our ref: PIAT-1562 11 October 2018

Dear Mr Drake
Freedom of Information request – Notice of Practical Refusal Reason
The Australian Transaction Reports and Analysis Centre (AUSTRAC) refers to your Freedom of Information Review request (FOI request) that was received on 18 September 2018. You sought review of the original decision (PIAT-1496) signed by AUSTRAC on 18 September 2018 to exempt documents requested as part of that request. The documents you sought access to under the provisions of the Freedom of Information Act 1982 (FOI Act) that you understood to be held by AUSTRAC was stated as follows:
“1. A list of all applicants for registration as Digital Currency Exchange Service Providers. 2. (Optional) - if convenient and easy to do, some indication of whether or not each of the above was granted registration would be nice, but not essential.”
Under section 24 of the FOI Act there is a power to refuse a request if a request consultation process has been undertaken and a practical refusal reason still exists. Section 24AA provides information as to when a practical refusal reason exists as follows:
24AA When does a practical refusal reason exist?
(1) For the purposes of section 24, a practical refusal reason exists in relation to a request for a document if either (or both) of the following applies:
(a) the work involved in processing the request:
(i) in the case of an agency—would substantially and unreasonably divert the resources of the agency from its other operations; or
(ii) in the case of a Minister—would substantially and unreasonably interfere with the performance of the Minister’s functions;
(b) the request does not satisfy the requirement in paragraph 15(2)(b) (identification of documents).
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Why I intend to refuse your request I have had regard to the matters presented within the FOI decision dated 18 September 2018. A focal point within that particular decision included the issue of de-banking. In short, de-banking refers to the practice of financial institutions exiting relationships with entities who are perceived to be discharging functions considered ‘higher risk’. Under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) AUSTRAC regulates entities which provide ‘designated services’. These regulated entities are known as ‘reporting entities’. The designated services captured by the AML/CTF Act are listed within Section 6 of the AML/CTF Act. In my opinion, financial institutions may decide to target entities for de-banking that are considered to reside within ‘higher risk’ sectors, and a financial institution may consider Digital Currency Exchange Service Providers as being within a ‘higher risk’ sector. I’ve considered that where actions relating to de-banking are undertaken by financial institutions, an entity could reasonably be affected from a business and/or financial affairs perspective. De-banking would disrupt the flow of currency through the de-banked entity to its disadvantage, involving a change of banking institutions or alternatively, enduring expected hardship in establishing renewed financial institution bank accounts. I’m satisfied de-banking has historically occurred in relation to financial institutions adopting an approach to de-bank reporting entities within the remittance sector. I draw close parallels between the remittance sector and Digital Currency Exchange (DCE) on the basis that each respective sector could reasonably be considered ‘higher risk’ by financial institutions. I am also satisfied there are legitimate concerns within the DCE sector that de-banking could reasonably occur if the list of DCE Service Provider names were to be disclosed. Based upon the rationale above I am required pursuant to Section 27 of the FOI Act to consult the organisations concerned on the basis it appears to me the organisations that have attempted to register with AUSTRAC (whether successful or non-successful) might reasonably wish to make a contention that the document is conditionally exempt under Section 47G of the FOI Act. Prior to conducting these consultations I have had regard to the time required to conduct the consultations required. I can confirm consultation with a vast number of entities would be required. I estimate consultation with these entities would far exceed 40 hours of FOI processing time, attracting the practical refusal reason of substantially and unreasonably diverting the resources of this agency from its other operations. Preparing Section 27 consultation notices for each respective entity would require the following activities:
 Creation of Section 27 consultation letters for a large number of entities;
 Likelihood of entities contacting AUSTRAC to discuss the letters, including how decisions are generally made pursuant to the FOI Act (including consideration of the Information Commissioner guidelines) and seeking advice on how to respond to the notice;
 Consideration of each respective response received, including responses that object to disclosure of the information requested; and
 Creation of decision notices for each entity detailing the steps taken to consider any objections receive and provide review rights where AUSTRAC decide to release their details as part of this FOI request.
On the basis of time required to conduct consultation with the relevant entities, I’m satisfied a Section 24AA(1)(a)(i) reason exists. Given AUSTRAC’s commitment to assist your endeavours in lodging a FOI request that could reasonably be processed that would not attract a Section 24AA reason, I can provide a suggested pathway forward in relation to this request.
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If you decided to revise your request to seek access to the first 10 entities who have attempted to register with AUSTRAC as a DCE Service Provider (and if those entities were successful), consultation with these 10 entities is not currently expected to exceed over 40 hours of processing time. In revising your request as stated above, it would considerably reduce the time required for AUSTRAC to process this particular FOI request. It would also be important to note that, if you decided to lodge multiple concurrent FOI requests for 10 entities from the register in each separate request, AUSTRAC would explore Section 24(2) which would also constitute a Section 24AA refusal reason. Consultation period and action required by you If you have any questions regarding this request or would like to discuss this matter with me, I can be contacted on (02) 6120 2631 or by email to info_access@austrac.gov.au The FOI Act provides a timeframe of 14 days for us to consult in relation to this matter. Within 14 days of receiving this notice you should contact me or, in writing, do one of the following:
(a) withdraw the request;
(b) make a revised request; or
(c) indicate that you do not wish to revise the request.
If you do not contact me or do one of the above within 14 days of receiving this letter your request will be taken to be withdrawn.
Please note processing of your request will be suspended during this time.
Yours sincerely
Ashley Smith Authorised Decision Maker AUSTRAC

AUSTRAC overturn of refusal:- (from their PDF)

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Chris Drake and Australian Transaction Reports and Analysis Centre (Freedom of information) [2023] AICmr 6 (8 February 2023)
Decision and reasons for decision of Freedom of Information Commissioner, Leo Hardiman PSM KC
Applicant
Chris Drake
Respondent
Australian Transaction Reports and Analysis Centre
Decision date
8 February 2023
Application number
MR18/00825
Catchwords
Freedom of Information — Whether a practical refusal reason exists — Whether work involved in processing the request would substantially and unreasonably divert the resources of the agency from its other operations — (CTH) Freedom of Information Act 1982 ss 24, 24A and 24AB
Decision
1. Under s 55K of the Freedom of Information Act 1982 (the FOI Act), I set aside the decision of the Australian Transactions Reports and Analysis Centre (AUSTRAC) of 25 October 2018.
2. AUSTRAC must now process the applicant’s request and notify the applicant of its decision no later than 30 days after receiving this decision.1
1 In relation to the processing timeframes that now apply, see Fletcher and Prime Minister of Australia [2013] AICmr 11 [33] – [38].
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Background
3. On 22 August 2018, the applicant applied to AUSTRAC for access to:
1. A list of all applicants for registration as Digital Currency Exchange Service Providers.
2. (Optional) - if convenient and easy to do, some indication of whether or not each of the above was granted registration would be nice, but not essential.
4. On 11 October 2018, AUSTRAC gave notice to the applicant under s 24AB(2) of the FOI Act that it intended to refuse access because processing the FOI request would substantially and unreasonably divert the resources of the respondent from its other operations (s 24AA(1)(a)(i)). AUSTRAC invited the applicant to respond to the consultation notice by indicating whether he wished to withdraw the request, make a revised request or did not wish to revise the scope of the request.2 AUSTRAC said of the request that ‘consultation with a vast number of entities would be required’ and estimated that ‘consultation with these entities would far exceed 40 hours of FOI processing time’.
5. AUSTRAC also put forward ‘a suggested pathway… in relation to this request’ involving a revision to the applicant’s request limited to ‘access to the first 10 entities who have attempted to register [successfully] with AUSTRAC as a DCE Service Provider’. AUSTRAC estimated that ‘consultation with these 10 entities is not currently expected to exceed over 40 hours of processing time’.
6. After some clarifying correspondence between the parties, on 17 October 2018 the applicant advised that he did not wish to revise the scope of the request.
7. On 25 October 2018, AUSTRAC refused access under s 24(1)(b) of the FOI Act on the basis that, following the request consultation process, it was satisfied that a practical refusal reason still existed. That is, it was satisfied that processing the applicant’s request would substantially and unreasonably divert the resources of AUSTRAC from its other operations (s 24AA(1)(a)(i)).
8. On 25 October 2018, the applicant sought IC review of AUSTRAC’s decision under s 54L of the FOI Act.
Scope of this IC review
9. The scope of the request is confined to one document, a Microsoft Excel Spreadsheet (the spreadsheet) recording the identities of 234 entities registered with AUSTRAC as Digital Currency Exchange Service Providers (DCE Service Providers).
10. The issue for resolution in this IC review is whether AUSTRAC’s decision to refuse the request under s 24(1) of the FOI Act on the basis that it is satisfied a practical refusal reason exists in relation to the document is the correct and preferable decision in the circumstances.
2 Section 24AB(6) of the FOI Act.
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11. In making my decision, I have had regard to the following:
• the applicant’s FOI request
• correspondence between the parties about the scope of the request, including the s 24AB request consultation notice
• the decision and reasons for decision dated 25 October 2018
• the FOI Act, in particular ss 24, 24AA, 24AB and 55D
• the Guidelines issued by the Australian Information Commissioner under s 93A of the FOI Act (the FOI Guidelines) to which agencies must have regard in performing a function or exercising a power under the FOI Act, in particular paragraphs [3.50] — [3.51] and [3.108] — [3.136]
• relevant IC review and AAT decisions, in particular ‘ACW’ and Australian National Maritime Museum (Freedom of information) [2023] AICmr 4; Paul Farrell and Prime Minister of Australia (Freedom of information) [2017] AICmr 44, and Farrell; Chief Executive Officer, Services Australia and (Freedom of Information) [2020] AATA 2390
• the parties’ submissions.
Whether AUSTRAC’s decision that a practical refusal reason exists is correct and preferable (s 24)
12. As mentioned above, the issue for resolution is whether AUSTRAC’s decision to refuse the applicant’s request under s 24(1) is the correct and preferable decision in the circumstances. The practical refusal reason which AUSTRAC relied on to support its decision was the reason specified in s 24AA(1)(a)(i) of the FOI Act: that processing the applicant’s request would substantially and unreasonably divert the resources of the agency from its other operations.
13. In ‘ACW’ and Australian National Maritime Museum [2023] AICmr 4, I set out the three elements of the decision-making task I must undertake in determining the issue which arises for resolution in this IC review. Those elements are as follows:
• First, I must determine whether a request consultation process has been undertaken in accordance with s 24AB of the FOI Act.
• Secondly, if I determine that a request consultation process has been validly undertaken, I must determine whether I am ‘satisfied’ that the work involved in processing the applicant’s request would ‘substantially divert’ the resources of the agency from its other operations. Whether I can be so satisfied turns on whether, having regard to all of the relevant evidence before me, I feel an actual persuasion that the quantum of resources necessary to process the applicant’s request would involve a diversion of resources which is ‘of substance’ in the sense described in ‘ACW’.
• Thirdly, if I am satisfied of a substantial diversion of resources, I must determine whether I am also satisfied that the work involved in processing the applicant’s request would ‘unreasonably’ divert the resources of the agency from its other operations. Whether I can be so satisfied turns on whether, weighing all of the relevant considerations disclosed by the objective evidence put before me, I feel an actual
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persuasion that diverting the resources to processing the applicant’s request involves a diversion of resources which is ‘unreasonable’. Examples of the kinds of considerations which may be relevant for this purpose, identified in previous AAT decisions including Farrell; Chief Executive Officer, Services Australia and (Freedom of information) [2020] AATA 2390, are set out in ‘ACW’ without limiting the considerations which may be relevant in any particular case. 14. For the purposes of this decision I do not repeat, but I adopt, the legal analysis and reasoning set out in ‘ACW’ in relation to each of these elements of the decision-making task. I turn now to deal with the identified elements.
The first element: whether a valid request consultation process was undertaken
15. For reasons which will become apparent, there is a question whether the obligation in s 24(1)(a) of the FOI Act to undertake a request consultation process was validly enlivened in the circumstances of this matter. That is, there is a question whether, even before the request consultation process was undertaken, AUSTRAC could be said to have been satisfied, in the sense contemplated by s 24(1), that a practical refusal reason existed in relation to the request. Nevertheless, given (1) the conclusions I reach below, (2) the fact that the validity of the request consultation process is not in dispute between the parties, and (3) AUSTRAC’s apparent compliance with the formal consultation process requirements enacted in s 24AB, I proceed for the purposes of this decision on the basis that the obligation in s 24(1)(a) was validly enlivened and that a valid request consultation process has been undertaken. On that basis, I proceed to determine whether I am ‘satisfied’ that the work involved in processing the applicant’s request would ‘substantially divert’ the resources of the agency from its other operations.
The second element: whether the work involved in processing the request would substantially divert the resources of the Department from its other operations
AUSTRAC’s reasons for decision and submissions
16. In its reasons for its decision, AUSTRAC said that access would ‘require consultations under s 27 of the FOI Act with a large number of entities’, specifically the 234 registered DEC Service Providers recorded in the spreadsheet as at the date of the decision3. The respondent said:
‘[the] key components of the consultation process required to be undertaken pursuant to s 27 of the FOI Act [are] follows:
• Creation of s 27 consultation letters for a large number of entities;
• Likelihood of entities contacting AUSTRAC to discuss the letters, including how decisions are generally made pursuant to the FOI Act (including consideration of the Information Commissioner guidelines) and seeking advice on how to respond to the notice;
3 FOI Guidelines [2.34]
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• Consideration of each respective response received, including responses that object to disclosure of the information requested; and
• Creation of decision notices for each entity detailing the steps taken to consider any objections receive and provide review rights where AUSTRAC decide to release their details as part of this FOI request.’
17. By way of background, a DCE Service Provider is any business that provides digital currency exchange services (digital currency being a non-centralised, non-state backed medium of exchange known generally as ‘cryptocurrency’). Under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 a DCE Service Provider that has specific Australian-based ‘geographical links’ must be registered with AUSTRAC and comply with, amongst other things, transaction reporting obligations imposed by that Act.
18. AUSTRAC submits that the information to which the applicant seeks access is not publicly available and advises that the information has not been published by the respondent ‘to ensure preservation of the business and financial affairs of DCE Service Providers who could reasonably expect to endure material harm if release or publication of the information were to take place’. AUSTRAC notes ‘the document in scope identifies a range of DCE Service Providers who are not publicly associated with or identified as DCE Service Providers’.4
19. AUSTRAC contends that the material harm referred to in [18] is the risk of ‘de-banking’ for publicly identified DCE Service Providers and explains this at length as follows:
‘De-banking refers to the practice of financial institutions exiting relationships with entities who are perceived to be providing services that they consider to be ‘higher risk’. … Under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) AUSTRAC regulates entities which provide ‘designated services’. These regulated entities are known as ‘reporting entities’. The designated services captured by the AML/CTF Act are listed within s 6 of the AML/CTF Act. …The provision of digital currency exchange (DCE) service is a designated service under the AML/CTF Act. DCE providers are therefore reporting entities and must be enrolled with AUSTRAC. In addition, DCE providers are required to be registered with AUSTRAC; provision of unregistered DCE service is a criminal offence. In AUSTRAC’s opinion, if a register of all DCE Service Providers was released to the FOI requestor and potentially made public, including publication upon AUSTRAC’s FOI disclosure log, financial institutions may decide to target DCE Service Providers for de-banking on the basis they reside within a ‘higher risk’ sector. A financial institution’s risk appetite may be of the type that de-banking is the preferred avenue of pursuit in circumstances an account holder is providing DCE services. … AUSTRAC has primarily established this position on its historic observations of financial institutions de-banking entities within the remittance sector (also considered a high risk sector), among other observations … [and] the potential activity of de-banking attracts s 47G(1)(a) considerations given the likelihood businesses are reasonably expected to be impacted by being associated with DCE activities’.5
4 Respondent’s submissions received 28 February 2022
5 Respondent’s submissions received 29 March 2019
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20. AUSTRAC submits that ‘whilst it is true that some DCE Service Providers openly advertise their business’ and may not be at risk of de-banking, the DCE Service Providers who are not known as such to their financial service providers ‘might reasonably wish to make an exemption contention’ under s 27.6 AUSTRAC also acknowledges that it ‘would be reasonably easy to redact [the spreadsheet] where written objections were received in accordance with ss 27 and 27A and where the objections reasonably engage the conditional exemptions in s 47G’. Notwithstanding this, however, the respondent contends that ‘if all 234 DCE Service Providers were to object, that would far exceed 140 hours of FOI processing’.7
21. AUSTRAC provides in support a collated time estimate for each stage of processing that totals 88 hours and 25 minutes and qualifies this estimate as being greatly subject to the quantum and complexity of the DCE Service Provider responses that might in fact be made. Additionally, AUSTRAC submits that 17 of the 234 registered DCE Service Providers will require consultation under s 27A of the FOI Act, necessitating a ‘significantly different letter to the s 27 letter’ that would add to the estimate of processing time.
22. AUSTRAC refers to the relevant factors outlined by Senior Member O’Donovan in Farrell; Chief Executive Officer, Services Australia and (Freedom of information) [2020] AATA 2390 at [60] 8 and submits that ‘if consultations were conducted over a total of 234 separate entities, and assuming the majority, if not all, of the entities consulted provides a response, it would require AUSTRAC to consider each separate response having regard to the individual circumstances of the responding entity, in order to meaningfully assess the extent which their objection properly engages the conditional exemption in s 47G … that would far exceed 140 hours of processing time across a total of 4 full time FOI officers’.9
23. In this regard AUSTRAC additionally raises the issue that not ‘every DCE Service Provider would be aware of the potential risks and implications associated with de-banking; they also may not fully understand the FOI process and the purpose of the consultation letter sent to them. Therefore, many of the registered DCE providers may reasonably seek to engage with AUSTRAC to make inquiries about the content of the consultation letter, what action would be taken upon a potential response they may wish to provide, what would happen after a decision is made on the request, and so on’10 – an issue that AUSTRAC contends could cause the processing time to ‘escalate significantly’.
24. The respondent also submits as a relevant factor that ‘AUSTRAC created an opportunity for the applicant to revise the scope of the request’ and that the applicant ‘did not re-frame the request to reduce the processing workload’11.
6 Respondent’s submissions received 28 February 2022
7 Respondent’s submissions received 28 February 2022
8 That is, “(a) the resources involved in the processing of the request and the resources available to the agency; (b) who will undertake the processing, whether or not they have competing priorities, and whether there is any impact on other work in the agency; (c) whether the FOI applicant cooperated in the request consultation process by re-framing a request to reduce the processing workload; (d) whether there is a significant public interest in the documents requested; and (e) other steps taken by the agency or Minister to publish information of the kind requested by an FOI applicant.”
9 Respondent’s submissions received 28 February 2022
10 Respondent’s submissions received 29 March 2019
11 Respondent’s submissions received 28 February 2022
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It is not apparent that an obligation to consult arose
25. The essence of the reasoning adopted by AUSTRAC to deny access for a practical refusal reason, as articulated in both its decision material and its submissions in this IC review, is that it was required to engage in consultation processes with third parties which would involve a substantial and unreasonable diversion of its resources away from its other operations. More particularly, AUSTRAC asserts that s 27(4), and to a much lesser extent s 27A(3), require it to engage in consultation processes with third parties identified in the single document which is at issue in this IC review.
26. The consultation requirements enacted in those sections are designed to ensure that, in certain circumstances, third parties are given an opportunity to make submissions in support of a contention that a relevant exemption12 applies in relation to a document. Importantly, however, the consultation requirements do not apply where an agency does not propose to give access to a document but, rather, has itself formed the view that a relevant exemption or exemptions have application such that access should be denied. For example, s 27(4) is in the following terms:
The agency or Minister must not decide to give access to the document unless:
(a) the person or organisation concerned is given a reasonable opportunity to make submissions in support of the exemption contention; and
(b) the agency or the Minister has regard to any submissions so made.
27. The text to which I have added emphasis makes it clear that the consultation requirement will not arise in circumstances where an agency is not going to decide to give access to a document. Section 27A(3) is to the same effect.
28. Having regard to the evidence before me, I am not persuaded that AUSTRAC’s assertion that a consultation requirement has been triggered is sustainable. That evidence does not in my view support a contention that AUSTRAC was at any relevant time contemplating a decision to give access to the document in dispute. Rather, that evidence suggests that AUSTRAC considered the document would be exempt because, at the least, it satisfied the requirements for conditional exemption under s 47G of the FOI Act and provision of access would on balance be contrary to the public interest for the purposes of s 11A(5) of the Act.
29. Relevantly:
• As noted above, in its submissions dated 28 February 2022, AUSTRAC said the following:
At this point in time the information is not well known. The information requested has not been published by AUSTRAC to ensure preservation of the business and financial affairs of the DCE service providers who could reasonably be expected to endure material harm if release or publication of the information were to take place.
12 For s 27, the relevant exemptions are those in s 47 and 47G. For s 27A, the relevant exemption is that in s 47F.
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This is an expression of AUSTRAC’s own view, formed absent any consultation with relevant DCE service providers – that is, that those providers ‘could reasonably be expected to endure material harm’ if release occurred.
• Also as noted above, in its submissions dated 29 March 2019, AUSTRAC asserted that:
o ‘financial institutions may decide to target DCE Service Providers for de-banking on the basis they reside within a “higher risk” sector’,
o AUSTRAC had itself established this position, including by reference to historic observations of relevant de-banking events, and
o there is a ‘likelihood businesses are reasonably expected to be impacted by being associated with DCE activities’.
• In an email sent to the applicant on 31 October 2018 at 9.35am, AUSTRAC said (emphasis added):
AUSTRAC maintains the previous position established not to provide details of DCE Service Providers to you.
Throughout previous FOI decisions provided to you … a key factor conveyed within those decisions concerned the issue of de-banking which still remains a concern for AUSTRAC.
Outside of the FOI decisions provided to you, at this particular point in time AUSTRAC continue to pursue a course of action to ensure DCE Service Providers are not unreasonably impacted by publication or administrative disclosure of a list that could reasonably cause serious detriment to their business affairs.
…
• In a public statement about de-banking issued on 29 October 2021, which AUSTRAC refers to in its submissions in this IC review, AUSTRAC said:
The effect of de-banking of legitimate and lawful financial services businesses can increase the risks of money laundering and terrorism financing and negatively impacts Australia’s economy. For this reason, AUSTRAC continues to discourage the indiscriminate and widespread closure of accounts across entire financial services sectors.
30. The first three of these points suggest in my view that AUSTRAC considered the document satisfied the requirements for conditional exemption under s 47G of the FOI Act. The last of these points suggests in my view that AUSTRAC considered provision of access would on balance be contrary to the public interest for the purposes of s 11A(5) of the Act.
31. In those circumstances, it is difficult to see how any relevant consultation obligation could be said to have arisen so as to inform the calculation of a resource diversion sufficient to found a practical refusal reason.
I am not, in any case, satisfied that processing the request would substantially divert AUSTRAC’s resources
32. Even if, however, I assume that a consultation obligation has arisen, the evidence before me does not in my view support a conclusion that processing the applicant’s request would involve a diversion of resources from AUSTRAC’s other operations which is ‘of substance’ in the sense I described in ‘ACW’.
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33. I note that AUSTRAC says, as a first step ‘the formal consultation letters would be reasonably identical in nature outside details and references to each separate entity name within the letters [and] the vast majority of these letters would be sent under s 27 by email … The preparation time for these letters is estimated to be approximately 8 hours at an average of 2 minutes per letter’
13. On any view, taking this first step would have enabled AUSTRAC to quantify the contentions and assess their complexity – an outcome that would have allowed AUSTRAC to calculate and provide evidence of a tangible processing time. For this reason, I do not consider the applicant’s refusal to reframe the request to be a relevant factor in this matter.
34. I have noted above AUSTRAC’s submission that the applicant’s request would require an extensive processing time if a majority of the 234 registered DCE Service Providers were to make an exemption contention under s 27 or, in more limited numbers, under s 27A. I note that AUSTRAC submits that:
‘the processing time required is anticipated to escalate significantly when consideration is given to the next steps of consultation opportunities open to the DCE Providers. It’s not anticipated every DCE Service Provider would be aware of the potential risks and implications associated with de-banking; they also may not fully understand the FOI process and the purpose of the consultation letter sent to them. Therefore, many of the registered DCE providers may reasonably seek to engage with AUSTRAC to make inquiries about the content of the consultation letter, what action would be taken upon a potential response they may wish to provide, what would happen after a decision is made on the request, and so on’. 14
35. AUSTRAC says it anticipates objections from the majority of the 234 registered DCE Service Providers to be consulted pursuant to ss 27(4) and 27A(3). AUSTRAC has not, however, provided any evidence in support of its submission other than the de-banking risk outlined above in [18] and [19] - a risk that AUSTRAC has not in the evidence put before me quantified and that apparently would not apply to at least a number of the DCE Service Providers in question, particularly those that openly advertise their business. I am not in this regard persuaded that bare anticipation, reflected in assertions, supports AUSTRAC’s processing time estimate.
36. Accordingly, having regard to all of the relevant evidence before me, I do not feel an actual persuasion that the quantum of resources necessary to process the applicant’s request would involve a diversion of resources which is ‘of substance’ in the sense described in ‘ACW’. I am not satisfied that the relevant practical refusal reason exists so as to support an access refusal decision under s 24(1)(b).
37. Having reached this conclusion, there is no need for me to go on to consider the third element of the decision-making task which I have identified above – that is, whether the work involved in processing the applicant’s request would ‘unreasonably’ divert the resources of the agency from its other operations. I note additionally that the evidence before me in relation to the application of s 47G does not extend beyond, in essence, assertions made by AUSTRAC. I am accordingly unable to determine in this IC review that s 47G applies to exempt the document at issue.
13 Respondent’s submissions received 29 March 2019
14 Respondent’s submissions received 29 March 2019
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Finding
38. I find that a practical refusal reason does not exist for the purposes of s 24(1)(b) of the FOI Act and AUSTRAC is not authorised under s 24(1)(b) of the FOI Act to refuse access to the documents in accordance with the request.
Leo Hardiman PSM KC
Freedom of Information Commissioner
8 February 2023
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AUSTRAC new refusal (from PDF):

Correspondence: PO Box K534 Haymarket NSW 2140 P: 02 9950 0055 F: 02 9950 0054 www.austrac.gov.au
Reference: PIAT-1926
2 March 2023
Mr Chris Drake

Dear Mr Drake

Freedom of Information Request Decision

The Australian Transaction Reports and Analysis Centre (AUSTRAC) refers to your application to the Office of the Australian Information Commissioner (OAIC) seeking Information Commissioner review of AUSTRAC’s internal review decision of 18 September 2018 to refuse access to the following documents you requested under the Freedom of Information Act 1982 (FOI Act), on the basis that a practical refusal reason existed in relation to your request:
‘1. A list of all applicants for registration as Digital Currency Exchange Service Providers. 2. (Optional) - if convenient and easy to do, some indication of whether or not each of the above was granted registration would be nice, but not essential.’
On 8 February 2023 the FOI Commissioner decided that a practical refusal reason did not exist in relation to your request. Therefore, AUSTRAC are now obliged to process the request.
I have examined the document in scope and decided to exempt the document in full.
In making my decision I have had regard to the following:
 Freedom of Information Act 1982
 Guidelines issued by the Australian Information Commissioner
Correspondence: PO Box K534 Haymarket NSW 2140 P: 02 9950 0055 F: 02 9950 0054 www.austrac.gov.au
Overview
The document sought by you raises the question of whether an exemption exists in relation to the unreasonable disclosure of business and/or personal information contained in the document identified within scope. In particular, information relating to DCE service providers (the third parties) which include businesses and individuals.
In matters where unreasonable disclosure of business and/or personal information is an issue, there is a two-step process that I am required by the FOI Act to follow in determining whether to release the documents requested. That process comprises of:
 Firstly, determining whether the document(s) requested are conditionally exempt under s 47G and/or s 47F of the FOI Act; and
 Secondly, determining whether giving access to the document(s) would be contrary to the public interest for the purposes of s 11A(5) of the FOI Act.
Applicable Conditional Exemptions
Public interest conditional exemptions – business
I am required to consider whether the release of the DCE register identifying third parties would be unreasonable. I note in relation to the information under consideration the following facts:
• The information relates to identifiable third parties; and
• The information under consideration relates to identifying DCE service providers who are engaged in providing particular services, which falls under “business, commercial or financial affairs” pursuant to the legislation.
This brings the information into consideration under s 47G of the FOI Act. AUSTRAC holds information in relation to reporting entities providing designated services. This includes information of the kind sought, which details the types of business activities particular reporting entities are undertaking. With that in mind, AUSTRAC would be generally expected to protect sensitive information it holds where such a release of information would negatively affect impacted third parties.
Correspondence: PO Box K534 Haymarket NSW 2140 P: 02 9950 0055 F: 02 9950 0054 www.austrac.gov.au
The consequences of de-banking, which I expect will lead to affected third parties experiencing a range of negative impacts, is worthy of careful consideration. De-banking refers to the practice of financial institutions exiting relationships with entities who are perceived to be providing services that they consider to be ‘higher risk’.
Under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) (AML/CTF Act) AUSTRAC regulates entities which provide ‘designated services’. These regulated entities are known as ‘reporting entities’. The designated services captured by the AML/CTF Act are listed within s 6 of the AML/CTF Act.
The provision of DCE services is a designated service under the AML/CTF Act. DCE providers are therefore reporting entities and must be enrolled with AUSTRAC. In addition, DCE providers are required to be registered with AUSTRAC; the provision of unregistered DCE services is a criminal offence. In AUSTRAC’s opinion, if a register of all DCE Service Providers was released to you and subsequently made public (including publication upon AUSTRAC’s FOI disclosure log in accordance with s 11C), financial institutions and other service providers either domestically or internationally would have the opportunity to target DCE Service Providers for de-banking on the basis they operate within a ‘higher risk’ sector. A financial institution’s and other service providers risk appetite may be of the type that de-banking is the preferred avenue of pursuit in circumstances an account holder is providing DCE services which would be harmful to third parties.
AUSTRAC has established this position on its historic observations of financial institutions de-banking entities within the remittance and DCE sector (considered high risk sectors), its ongoing supervisory engagement with entities in this sector and from other observations such as evidence and testimonies detailed as follows: Select Committee on Australia as a Technology and Financial Centre – Chapter 4 (De-banking) – October 2021 https://www.aph.gov.au/Parliamentary_Bus...
AUSTRAC has also issued a media release concerning de-banking which is as follows:
https://www.austrac.gov.au/news-and-medi...
Correspondence: PO Box K534 Haymarket NSW 2140 P: 02 9950 0055 F: 02 9950 0054 www.austrac.gov.au
The testimonies in the Senate Committee hearings demonstrate that it is reasonable to expect that disclosure of the document in scope could detrimentally affect the third parties by exposing them to an increased risk of de-banking.
The publications support the contention that de-banking remains a very real and significant concern for DCE service providers. These publications exceed mere apprehension of harm on the basis the testimonies provided by reporting entities illustrate their first hand experiences as opposed to theoretical circumstances.
I also take into consideration the fact these pieces of evidence are reasonably recent in nature, whilst also considering the current landscape of the de-banking issue has not altered to the degree the information would no longer be accurate.
Whilst it is accepted that some DCE service providers openly advertise their business so that their risk exposure to de-banking may not be materially increased by the disclosure of the list as it would be for other DCE service providers, it does not necessarily follow that disclosure of the list pursuant to the FOI request is appropriate for DCE service providers in light of the evidence referred to within this FOI decision. That is because it’s expected that there are DCE service providers who have not publically advertised their business and who have not come to the attention of their financial service providers, for whom the risk of de-banking risk could reasonably materially increase if the list was to be disclosed. It is for this reason AUSTRAC are of the view that reporting entities associated with the document in scope should be owed protection in accordance with s 47G of the FOI Act to ensure the third parties are reasonably protected from unreasonable disclosure of their business affairs.
Section 47G conclusion For the reasons set out above, I have decided that the document sought is conditionally exempt under s 47G(1) of the FOI Act. I will address the public interest considerations for this applied exemption at a later stage within this notice.
Correspondence: PO Box K534 Haymarket NSW 2140 P: 02 9950 0055 F: 02 9950 0054 www.austrac.gov.au
Public interest conditional exemptions – Personal Privacy The information sought under this FOI request relates to individuals identified within the DCE register. Such information would:
 Identify the third parties by name and/or any potential aliases, which can be combined with any open source information such as an individual’s professional history to reasonably identify that individual;
 Provide information relating to actions undertaken the third parties (that is, provide information that the third parties are providing DCE services).
Considering the above, I am satisfied that the documents you seek concern personal information about identified individuals. Having determined that the request relates to personal information of identified individuals, I am required to consider whether the release of the DCE register relating to these third parties would be unreasonable. Considerations of Section 47F
Section 47F(2)(a)
The document sought contains information that the third parties are involved in providing DCE services. The details within the DCE register are generally only known to AUSTRAC and the DCE service providers who are providing DCE services. I am satisfied that the information is not well known. Section 47F(2)(b) The above section relates to whether the DCE service provider information is well known in general, whereas this section relates to whether third parties are known to be (or to have been) associated with the matters dealt with in the documents sought. There is no evidence before me which suggests a DCE service provider list is available for public consumption, therefore the third parties are not known to be associated with the matters dealt with in the document. This supports the notion of your request which is to identify these precise third parties that are not known to be associated with the document sought.
Correspondence: PO Box K534 Haymarket NSW 2140 P: 02 9950 0055 F: 02 9950 0054 www.austrac.gov.au
Section 47F(2)(c) As mentioned above, the DCE register is generally only known to AUSTRAC and the specific DCE service providers who provide DCE services. AUSTRAC has not made the DCE register public for the reasons outlined within the s 47G reasoning. I am satisfied that the document sought is not publicly available. Section 47F(2)(d) There are a range of additional factors AUSTRAC sees as relevant to this FOI request. Firstly, as noted earlier in this determination, my reasoning has been set out in respect to de-banking. The de-banking issue reaches beyond impacts to businesses and extends to third party individuals on the basis there are individuals providing DCE services that are identified within the document requested. I’m satisfied that both businesses and individuals are exposed to the same risk of de-banking. The evidence and testimony links provided within the s 47G arguments set out relevant factors to the consideration of protecting personal privacy in the circumstances which I feel are crucial to deciding if release of the document would involve the unreasonable disclosure of personal information. Secondly, AUSTRAC is subject to the Australian Privacy Principals under the Privacy Act 1988. Accordingly, it has obligations in relation to the handling and protection of personal information. Further, pursuant to s 212(3)(h) of the AML/CTF Act, the AUSTRAC CEO and appointed delegates are required to have regard to privacy in performing their functions. Having regard to s 212(3)(h) of the AML/CTF Act and the ongoing landscape of de-banking, AUSTRAC can be reasonably expected to protect the personal information it holds relating to this issue, including the personal information sought. I’m satisfied that to reveal any detail concerning individuals identified within the DCE register would be an unreasonable disclosure of third party personal information in the circumstances. Section 47F conclusion For the reasons set out above, I have decided that the document sought is conditionally exempt under s 47F(1) of the FOI Act.
Correspondence: PO Box K534 Haymarket NSW 2140 P: 02 9950 0055 F: 02 9950 0054 www.austrac.gov.au
Step two: whether giving access to the documents would be contrary to the public interest
Having determined above that the document sought contains business and personal information (respectively), and that the documents are conditionally exempt under s 47G and s 47F of the FOI Act, I am required to determine under s 11A(5) of the FOI Act whether access to the document would, on balance, be contrary to the public interest. Section 11B of the FOI Act sets out factors that are relevant to the determination of whether access to the document would, on balance, be contrary to the public interest for the purposes of s 11A(5) of the FOI Act.
In relation to the matters the FOI Act sets out as favouring access, I note the following:
 The release of the document is nominally in line with the objects of the FOI Act set out in s 3. That is, the documents do constitute information held by the Government. However, the information has no involvement in government decision making and therefore has no capacity to advance public participation in government processes, or otherwise subject the Government to increased scrutiny.
 The document in question is not likely to inform any ongoing public debate, therefore this consideration is not applicable.
 The document in question does not relate to public expenditure, therefore this consideration is not applicable.
 Access to the third parties information would not provide the applicant with access to their own personal information.
I also note the following factors that do not favour access:
 Disclosure could reasonably be expected to prejudice the third parties’ right to privacy and/or business affairs, as set out in the consideration of s 47F and s 47G. I have discussed this at length above;
 The evidence before me does not indicate that there is a relationship between you and the third parties, such that they would contemplate or approve of me giving you their business or personal information which the community would expect be protected in light of the circumstances;
 Disclosure of the information is reasonably capable of having serious consequences for the third parties, that being the expectation the third parties would suffer the consequences of de-banking; and
 Disclosure of the information could lead to registered DCE service providers de-registering with AUSTRAC, or new DCE service providers seeking to provide
Correspondence: PO Box K534 Haymarket NSW 2140 P: 02 9950 0055 F: 02 9950 0054 www.austrac.gov.au
designated services while unregistered. Both would have serious consequence to AUSTRAC’s ability to register DCE service providers in future.
Further to these points, the issue of de-banking is not isolated to the businesses and individuals concerned, but involve wider ranging consequences. Failure to secure banking services can place a business into an untenable operating scenario, such as inability to acquire and hold sufficient cash reserves to ensure its solvency. In such circumstances customers engaged with the business are likely to be impacted by decreasing any consumer protections in operation.
Businesses faced with the consequence of de-banking may also act to a degree of panic, uncertainty or desperation and consider adopting risky business decisions, underground or opaque offerings which further heightens risk for customers and limits law enforcement intervention where their operations sit outside the regulatory framework. I consider these factors add further weight toward release being contrary to the public interest.
Weighing up the competing interests
After weighing up all the relevant factors, I consider that release of the DCE register would be contrary to the public interest. I consider that the factors in favour of the disclosure, which include the fact release is nominally in line with the objects of the FOI Act, are not strong enough to support a release in the circumstances and that considerably more weight should be applied to the factors against the release of the requested document. Crucially, in weighing the factors, I have applied significant weight to the prospect that disclosure could reasonably impact the ongoing business and individual affairs of persons either currently registered with AUSTRAC or those who may seek registration in the future. Decision
I have decided that the document is conditionally exempt under both s 47G(1) and 47F(1) of the FOI Act and that disclosing that information would be contrary to the public interest for the purposes of s 11A(5) of the FOI Act. As such I refuse access to the requested document. I note that as I have decided to refuse access to the requested document, I am not required to consult the third parties for the purposes of s 27(4) of the FOI Act.
Correspondence: PO Box K534 Haymarket NSW 2140 P: 02 9950 0055 F: 02 9950 0054 www.austrac.gov.au
In light of your FOI request having been recently considered by the Office of the Australian Information Commissioner (OAIC), please direct any outstanding concerns you have in respect to this matter with their office by quoting OAIC reference number MR18/00825.
Yours sincerely
Bradley Brown Authorised Decision Maker AUSTRAC