This article is more than 1 year old

This article is more than 1 year old

Peter Dutton’s citizenship-stripping laws may have thwarted police from pressing criminal charges and increased the risk of terrorism, Australia’s spy agency has warned.

The Australian Security and Intelligence Organisation issued the warning to an inquiry examining provisions that automatically strip dual nationals of their Australian citizenship if they engage in terrorism-related conduct.

Asio has called for the powers, introduced by the Turnbull government in 2015 at the urging of Dutton, now the home affairs minister, to be replaced by an optional power to cancel citizenship only if it is in Australia’s interests.

Spy chief says foreign espionage and interference an 'existential threat' to Australia Read more

It submitted that it was “too early” to determine if the laws had acted as a deterrent. It accepted that they prevented people re-entering Australia, meaning they were “unable to physically execute an attack in Australia or undertake any face-to-face radicalisation, recruitment or capability transfer” but said this needed to be “balanced against the security challenges arising from locating the individual offshore”.

Leaving suspects outside Australia “will not eliminate any direct threat they pose to Australian (or other) interests overseas” and would not prevent them using technology “to inspire, encourage or direct onshore activities that are prejudicial to security”.

“In some instances, citizenship cessation will curtail the range of threat mitigation capabilities available to Australian authorities,” Asio said.

“It may also have unintended or unforeseen adverse security outcomes – potentially including reducing one manifestation of the terrorist threat while exacerbating another.

“There may be occasions where the better security outcome would be that citizenship is retained, despite a person meeting the legislative criteria for citizenship cessation – for example, where the Australian Federal Police has criminal charges that could be pursued if the person were to remain an Australian citizen.”

Asio submitted that monitoring and investigating suspects was more challenging when they were overseas and it would be better to maintain “maximum visibility of, and control over, the cohort” by having a “range of options” available.

It suggested that stripping citizenship “works alongside a number of other tools” – including exclusion orders banning suspects’ return to Australia – but “does not necessarily eliminate the threat posed”.

Asio called for an “alternative model … where full and thorough consideration can be given to each citizenship cessation case, including having regard to whether ceasing an individual’s Australian citizenship would reduce the threat and protect Australia and its interests from that harm”.

The review of the laws is being conducted by the parliamentary joint committee on intelligence and security, which is due to report by 1 December, and comes on top of a separate inquiry by the Independent National Security Legislation Monitor.

The home affairs department has submitted that the laws had ben introduced to address the “danger posed to Australia and its interests by foreign terrorist fighters, including those who sought to return to Australia after travelling to the conflict zone”.

The department accepted that the automatic process may “reduce the availability of other mechanisms, such as criminal justice processes, that can be used to manage the level of risk an individual poses to the Australian community”.

“The ability to prosecute a person for certain terrorism offences may depend on their citizenship status; for example, the offence of entering or remaining in a declared area under section 119.2 of the Criminal Code only applies to citizens and residents of Australia,” it said.

• Sign up to receive the top stories from Guardian Australia every morning

Other stakeholders including the Law Council have complained that the law increases the risk of rendering people stateless, in cases such as the Islamic State recruiter Neil Prakash, who ceased to be an Australian citizen despite Fiji also not recognising him as a citizen.

The law also allows the minister determine that where a person is a dual national, their Australian citizenship has ceased if they have been convicted of a number of offences, including terrorism offences.

Last year the government attempted to lower the threshold for revoking citizenship so that the minister would need only to be “reasonably satisfied” that a person would have another citizenship, but the bill lapsed before May’s federal election.