For many years, Australia has been condemned as a laggard on money-laundering globally.

Having failed to enact Tranche 2 – the second half of its AML/CTF reform that would compel real estate agents, lawyers and accountants to join the global fight against serious and organised financial crime (after 15 years of delays).

The AUSTRAC Inquiry

Now, AUSTRAC – Australia’s agency set up to fight criminal abuse of the financial system, will be probed under a new parliamentary inquiry, designed to measure the efficiency and adequacy of Australia’s AML regime.

Having recently attracted headlines after fining both Westpac and the Commonwealth bank, AUSTRAC has become a much-feared operator. Now, they have their sights on cleaning up the casino industry – revealing this month that they were conducting enforcement investigations on Crown, Star and SkyCity Entertainment Groups.

The Rationale Behind It

The motion for the formal inquiry was bought about Labor Senator Deborah O’Neill – who says that “as AUSTRAC increases its own public profile by taking enforcement action against Australia’s leading financial institutions, it is only appropriate that the Australian Parliament scrutinises AUSTRAC’s operations and its regulatory actions”.

She believes that these enforcement actions have only been possible because the entities had self-reported breaches – thus implying that AUSTRAC is reactive, rather than proactive, in their approach – creating an environment fertile for financial crime.

The inquiry, which was approved a few days ago by the Senate Legal and Constitutional Reference Committee, will probe the extent to which the regulator relies upon self-reporting breaches and is able to identify emerging problems.

It will also look at whether Australia’s AML/CTF regime is fit for purpose – and will determine what the nation needs to do to ensure they are no longer one of the world’s money-laundering weak links.

The Next Steps

An AUSTRAC spokeswoman said the Regulator will assist with the inquiry, adding it had a range of tools to detect non-compliance including on-site assessments, data analysis, self-disclosure from entities and collaboration with international agencies.

The Parliamentary Committee overseeing the inquiry will now launch the inquiry website and begin accepting public submissions, with public hearings held by the end of the year.

We Can Help

Here at One AML, we can help Australian businesses understand their current AML/CTF obligations, as well as what the investigation may mean in the future. Get in touch with our highly qualified team today.