In 2017, AUSTRAC launched the Fintel Alliance, bringing together government, industry, academia and other international partners in the fight against money laundering, terrorism financing and other serious financial crime.
The Fintel Alliance has established working groups to bring together experts, analysts and practitioners on the complex topics of trade-based money laundering, child exploitation and tax crime.
Tax Crime and Evasion working group
The Fintel Alliance Tax Crime and Evasion Working Group has operated since July 2020, and is jointly led by ANZ, AUSTRAC, NAB and the ATO.
Over the past 12 months, the key areas of focus for the working group have been offshore tax evasion, GST refund fraud, and virtual assets.
Offshore tax evasion
Following the Pandora Papers financial leak, the Tax Crime and Evasion working group collaborated to identify Australian residents that had dealt with offshore service providers to hide and launder funds, and evade tax.
GST refund fraud
The Tax Crime and Evasion working group assisted the ATO to identify Australia’s biggest GST fraud whereby fake businesses were invented to claim a false GST refund.
This led to the ATO launching Operation Protego, which has since stopped more than $1 billion in attempted GST fraud.
Tax evasion using virtual assets
While the Fintel Alliance has a dedicated Virtual Assets working group, the Tax Crime and Evasion working group also focuses on the abuse of virtual assets to evade tax obligations.
Trade-Based Money Laundering working group
Although money is commonly laundered through the financial system and through physical movement of money, it can also be laundered through the physical movement of goods through the trade system. This is known as trade-based money laundering and is often used to disguise proceeds of crime.
The Trade-Based Money Laundering working group has enabled government, law enforcement and financial institutions to collaborate to better understand, detect and respond to this threat. Areas of focus throughout 2021-22 included open account trade and the global diamond trade.
Combatting Child Exploitation working group
Child exploitation is a heinous crime which is conducted for financial gain. The Combating Child Exploitation working group works to capture insights and best practices in combatting this crime, increase awareness of the role financial information plays in combatting child exploitation, and encourage collaboration between domestic and international partners to protect vulnerable community members.
Virtual Assets working group
The recently formed Virtual Assets working group brings together experts from digital currency exchange providers, law enforcement and government agencies to better understand and respond to financial crime through virtual assets.
Key takeaways
The Fintel Alliance’s establishment of working groups, including the Tax Crime and Evasion, Trade-Based Money Laundering, Combatting Child Exploitation, and Virtual Assets working groups, has allowed for a greater understanding of and response to money laundering, tax crime, and other serious crimes such as child exploitation.
