Australia’s anti-money laundering regulator has warned that it is likely to take more action against the nation’s top financial institutions after being “flooded” with reports of potential money- laundering breaches.

Nicole Rose, Austrac Chief executive, has said that following its landmark case against the Commonwealth Bank in 2017 – which resulted in a record fine of $700 Million – there has been a sharp increase in ‘self-disclosure’ from the companies that it regulates. She has promised that Austrac would use various measures, including legal action and fines, to bring miscreant financial institutions to justice.

Pledging to legislate all the recommendations from the banking probe by the end of 2020, Treasurer Josh Frydenberg has decided to direct 75 per cent of Treasury’s legislative agenda and commit $10 million to get up to 40 pieces of legislation through Parliament over the next year. “Implementing the recommendations by the Royal Commission is critical to restoring public trust and confidence in Australia’s financial system.

Businesses regulated by Austrac include banks, money remittance firms, online payments platforms, and casinos. Detecting money laundering is a key part of the fight against organised crime, which the Australian Institute of Criminology has estimated costs the nation almost $50 billion a year. Todd Harland, a former Austrac manager who is now chief executive of anti-money laundering consultancy AML Solutions Australia said that money laundering in Australia was “big business” and it went “hand in glove” with organised crime.

Anti-money laundering laws require banks to put strict processes in place to detect and report on suspicious transactions, which can provide valuable intelligence in detecting criminal activity.

Breaching anti-money laws can attract extremely large penalties if it leads to civil court action. Austrac also has the power to force companies to have their compliance audited and can also issue infringement notices with fines. Austrac has indicated all such actions were likely.

The CBA case has served as a powerful wake-up call to banks, citing a 70% increase in “suspicious matter reports” to Austrac since the explosive case. Ms Rose has said that banks had “well and truly got the message” about anti-money laundering measures, but given the complexity of banks, there was much more to be done.

Date: 19 August 2019

Argus Global specializes in anti money laundering measures and regulatory compliance. We can help you determine if your company is up to date with the latest regulations with compliance reviews, and we offer as well ongoing support for all your compliance needs.

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