A convicted Egyptian terrorist who arrived in Australia by boat as an asylum seeker was mistakenly cleared by the Australian Security Intelligence Organisation to be released into the community even though he was on an Interpol red alert list.
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And even after the mistake was realised, the man, who had been convicted in Egypt on murder and terrorism charges in 1999, was held in a low-security detention centre for nearly eight months, a Senate hearing was told on Thursday.
In the end, the man was never released.
He was moved last month from the low-security Inverbrackie centre in the Adelaide Hills to a higher security centre in Sydney.
The Australian Federal Police also realised who the man was in November 14, 2012. Yet the Department of Immigration has said it was not informed of the man's criminal past until February this year.
The revelations came on Thursday when ASIO director-general David Irvine was questioned in a Senate estimates hearing, which also revealed that only 10 per cent to 15 per cent of asylum seekers arriving by boat receive a full ASIO security check before they are given protection visas.
The man convicted of terrorism offences is understood to be a 55-year-old named Suleiman and he appears to have been connected with a bomb attack.
Australian Federal Police Commissioner Tony Negus told the hearing the man had been convicted in absentia for belonging to a terrorist organisation, the Egyptian Islamic Jihad. His offences also included premeditated murder, destruction of property, unlawful possession of firearms and explosives, and forgery.
The man arrived at Christmas Island in May 2012 with his family and was moved to Inverbrackie.
ASIO deemed him fit to be released into community detention due to ''a clerical or some other mistake'', Mr Irvine said.
''ASIO missed that man, didn't they?'' shadow attorney-general George Brandis asked.
Mr Irvine replied ASIO had either ''thought … that he was someone else or that he was not registered in our holdings''.
ASIO was told by the country that put the man on the Interpol list - thought to be Egypt - the man in Inverbrackie was not the same man as the terrorist. That country later corrected this. Yet even after ASIO corrected its mistake on August 30, 2012, the man was not moved.
A spokeswoman for the Department of Immigration said the department learnt of the man's identity in February.
''In late February when suspicions about the man's criminal past were confirmed by the relevant agency, the department did take immediate steps to facilitate the man and his family's transfer into a higher security detention at Villawood,'' she said.