The Government's attempt to crack down on unexplained wealth should be welcomed as a step towards making Australia a bad place for criminals to do business, writes David Connery.

Federal Justice Minister Michael Keenan's first major sortie in his new portfolio deserves recognition. By introducing amendments to create an unexplained wealth law, he's acted decisively to give new tools to the courts and federal law enforcers to fight organised crime.

This new legislation will enhance the Commonwealth's power to confiscate money and property where a person can't show their wealth has been earned legitimately. The new measures will also make it harder for people to frustrate courts and circumvent confiscation orders.

The amendments will be especially useful in prosecuting criminals who direct crime, but are smart enough to distance themselves from an actual crime. One cheer for the Minister!

But there's a political edge to this move. Last year, the previous Australian Government asked COAG members to refer their powers to confiscate unexplained wealth to the Commonwealth. That suggestion was refused by the premiers, and a review team consisting of retired and highly-respected officials was commissioned to "break the deadlock" last June. Their findings aren't known yet.

In the meantime, Minister Keenan has put the Commonwealth's legislation on the table. So there's a spur to again ask the premiers to cooperate in a nationwide approach to unexplained wealth confiscation. And effective cooperation - which removes jurisdiction as a factor in prosecutions - is important because unexplained wealth proceedings are likely to involve people who have hidden money overseas and across many states.

Without this measure, prosecuting the most sophisticated and perhaps the wealthiest criminals will likely become mired in arguments over whose law has been broken.

Having all the states and territories refer their powers to confiscate unexplained wealth to the Commonwealth would be a smart path to take and would deliver real benefits.

But before that can occur, three main obstacles must be overcome.

In the first instance, the Commonwealth's new legislation will need to be seen as a good package by the states - one at least as good as they have already. That will be an individual judgment for each premier, because there are significant state-to-state differences in this type of legislation. There's also the challenge that the Commonwealth's new package hasn't been tested in the courts yet.

Secondly, there is a need to consider the rights of the states. This is important, and states should not give away their powers without there being a major benefit.

A referral of unexplained wealth to the Commonwealth would easily pass that hurdle. Like the referral concerning terrorism laws in 2002, unifying these powers within the Commonwealth would make it simpler to use the laws. It would create a nationally-consistent approach at the same time. It could also build on the recent anti-gangs squad innovation to further strengthen cooperation in the fight against organised crime.

Only criminals would lose here.

And thirdly, greater clarity is needed concerning the way confiscated wealth would be divided among governments under these new conditions. At present, all funds confiscated at the federal level go into a Commonwealth trust account that can be used for law enforcement, drug treatment and crime prevention programs.

The fund also has an "equitable sharing provision" to defray the costs of states who cooperate in actions, but all payments are at the Commonwealth minister's discretion. Agreeing to a clearer way to share this money would surely help to achieve a referral of powers. Regrettably, the first reading of the new amendments hasn't addressed this fund or its operation.

Despite these challenges, Minister Keenan deserves a second cheer for introducing this legislation now.

He will earn a third cheer when he moves further. Firstly, he'll need to create better enabling conditions for law enforcement agencies so they can use the legislation. Unexplained wealth actions are complex and often lengthy processes. Quick returns are unlikely, and agencies can be tempted to go for low-hanging fruit instead of the most important cases.

To encourage the law enforcement agencies to take risks on harder but bigger cases, a "fighting fund" could be created to pay for cases that chase the assets held by the cleverest criminals.

And more broadly, the Minister should continue the Government's efforts to make Australia a bad place for criminals to do business. The Australian Crime Commission continues to stress that professional facilitators - usually inadvertently - help criminals to launder the proceeds of crime.

One way to make it harder for criminals to get such advice and support is to extend "know your customer" regulations to lawyers, real estate agents and accountants. This provision is a key part of the anti-money laundering regime, and is incumbent upon all banks at present: that's why you need to do a "100-point check" to open an account.

By extending this obligation, those professionals will need to be fully aware of who they are dealing with. Should that professional be helping criminals to launder illegitimate funds, it's then possible that he or she will be clearly complicit in their crimes.

While this won't necessarily prevent crime, it will be another way that the Australian Government can show that it's open for legitimate business, and a bad place to be a criminal.

Dr David Connery is a senior analyst with the Australian Strategic Policy Institute in Canberra. View his full profile here.