AUSTRAC, the Australian FIU (Financial Intelligence Unit, which is the governmental agency which investigates financial crimes) and AML/CTF regulator, has just sent out the January 2013 edition of its e-news Newsletter (which you can subscribe to here) with a whole raft of interesting information about Aussie banking regulation and enforcement.
In this issue, AUSTRAC informs us that it has published its operational supervisory, enforcement and intelligence strategies for 2012-2014. It identifies the regulatory priorities for the next 2 years.
Secondly, Australian financial service firms have until March 31st to submit their annual report of compliance activities through the AUSTRAC Online service.
Thirdly, the newsletter announces that the Remittance Sector Register, which is the list of all registered money service businesses, is now searchable online.
Lastly, AUSTRAC published the following case study, which is part of AUSTRAC’s 2012 typologies and case studies report:
Law enforcement conducted an investigation into a remittance service provider suspected submitting false information to AUSTRAC to facilitate money laundering.
AUSTRAC information helped identify that the remitter and his remittance business had assisted a criminal syndicate to launder the proceeds of identity fraud.
Law enforcement and AUSTRAC analysed financial transaction activity undertaken by the remitter, revealing that the remitter had reported approximately AUD3.5 million in significant cash transaction reports (SCTRs) over a two-year period. Further investigation found the majority of recipients recorded in these transaction reports could not be identified or did not exist.
Over this same period, 15 foreign exchange transactions were reported to AUSTRAC totalling over AUD1.1 million. The value per transaction ranged between AUD10,000 and AUD 200,000.
AUSTRAC also received suspect transaction reports (SUSTRs) relating to the remitter’s financial transactions with other reporting entities. Further analysis revealed a range of suspicious activity undertaken by the remitter, including:
the remitter’s reluctance to explain the source of funds to bank staff
the depositing of large amounts of cash into an account followed by an international funds transfer on the same day
the use of third parties to make international funds transfers on the remitter’s behalf.
The law enforcement investigation collected evidence confirming the remitter was involved in money laundering on behalf of third parties. The remitter was charged and convicted on multiple counts of dealing with the proceeds of crime worth more than AUD100,000 contrary to section 400.4 of the Criminal Code Act 1995.
The remitter was ultimately sentenced to five years and six months imprisonment, with a minimum of three years and seven months, and was also charged and convicted of money laundering offences.
While it’s not all strictly watchlist-related, AUSTRAC e-news provides a wealth of insight into regulatory actions and priorities. After all, it’s not referred to as AML/CTF (or AML/CFT, depending on whose naming it) for nothing: KYC/CDD (Know Your Customer/Customer Due Diligence) and AML activities have significant list screening components, even if those activities are not the heart of the compliance area’s focus.
AUSTRAC Press release for Strategy reports publication
Supervision Strategy Report 2012-2014 – Text, PDF
Enforcement Strategy Report 2012-2014 – Text, PDF
Intelligence Strategy Report 2012-2014 – Text, PDF
AML/CTF compliance reports page
Remittance Sector Register
Remittance Sector Register Search
2012 Typologies and Case Studies Report – main page, full report
Categories: DFAT Updates