SUBMISSION- THE ADEQUACY AND EFFICACY OF AUSTRALIA’S ANTI-MONEY LAUNDERING AND COUNTER-TERRORISM FINANCING (AML/CTF) REGIME

Submission: money laundering

27 September 2021

SUBMISSION- THE ADEQUACY AND EFFICACY OF AUSTRALIA’S ANTI-MONEY LAUNDERING AND COUNTER-TERRORISM FINANCING (AML/CTF) REGIME

When examining the adequacy and efficacy of our AML/CTF regime the following needs to be considered:

• Australia is seen as an attractive destination for foreign proceeds, particularly corruption related proceeds flowing into real estate from the Asia-Pacific region, as well as from as far away as Africa and Russia.

• Australia has low compliance with the FATF recommendations.

• The Australian Transaction Reports and Analysis Centre (AUSTRAC) is entirely reliant on the information provided by reporting entities in order to detect money ML, financially motivated crime, and offences committed against the AML/CTF Act by those same reporting entities.

• The AUSTRAC collects data and intelligence from only a very small subset of those entities that are being used to commit or facilitate financially motivated crime and ML.

• Systemic and large-scale breaches have occurred undetected by the AUSTRAC. A significant amount of ML is now occurring in a wide variety of methods that are outside of the AUSTRAC’s current capacity to detect.

• Designated Non-Financial Businesses and Professions (DNFBPs) must be included in Australia’s AML/CTF regime, to better detect and prevent ML/TF and other predicate crimes.

• Australia needs to urgently rectify existing deficiencies in AML/CTF regulation to prevent and detect ML and to respond to new areas of risk, such as those in digital currencies.

• To strengthen the regime, processes need to be in place that enable the pro-active collection of evidence and detection of repetitive selective reporting by entities.

• There needs to be a mentality beyond just compliance with the FATF recommendations (which themselves need to be updated), and instead a focus on keeping out criminally derived monies from the Australian economy.

• One of the key methods of identifying emerging ML/TF problems is to conduct a National Risk Assessment (NRA). Australia does not have a national policy which sets out what the overall AML/CTF system is meant to achieve, and how success would be monitored or measured. This makes it challenging to determine how well the ML/TF risks are being addressed.

• Agencies such as the AUSTRAC, the Australian Federal Police (AFP) and the Australian Securities and Investments Commission (ASIC) are provided adequate resources to enable them to handle ML/TF related offices and an increase in reporting entities.

• To support the AML/CTF regime, Australia needs to implement a publicly accessible centralised beneficial ownership register.