Submission: Anti-Money Laundering

February 2017

In the time available, we write to affirm our support for extending AML/CTF regulation, taking a risk-based approach to a range of services provided by the legal profession that are seen to pose high ML/TF risks. We acknowledge that, in doing so, increased funding of AUSTRAC will be important to enable it to conduct the essential supervision.

 

As one category of designated non-financial businesses and professions (DNFBPs) the current lack of AML/CTF due diligence and reporting obligations for lawyers in Australia referred to critically in the 2014 FATF Review of this country, may impair intelligence gathering regarding ML/TF risks and threats.

Such an intelligence gap potentially frustrates efforts to accurately assess the degree to which lawyers and other DNFBPs are currently, or have previously been, involved in ML/TF activities.

Additionally, and perhaps more importantly, the lack of coverage of lawyers and other DNFBPs reduces the capacity of law enforcement and regulators to address money laundering by these entities committed as a deliberate act.

The use of lawyers’ trust accounts, for example, to move money anonymously internationally is widely known. Of itself that should be reason enough to expand coverage of AML/CTF legislation to encourage lawyers to assess the source of such funds, reject transactions for which they cannot identify a legitimate source and report the individual beneficial owners of bulk funds moved through trust accounts.