Almost all criminal acts are motivated by profit, and investigations typically involve “following the money”. AUSTRAC uses financial intelligence and regulation to follow these financial trails to detect and disrupt money laundering, terrorism financing and other serious crime.
In addition to helping catch criminals, AUSTRAC is responsible for regulating entities to ensure compliance with their anti-money laundering and counter-terrorism financing (AML/CTF) obligations. AUSTRAC has a range of enforcement powers which may be exercised for compliance breaches, including:
- Issuing infringement notices.
- Issuing remedial directions, which require a reporting entity to take specified action to ensure compliance.
- Accepting enforceable undertakings detailing the specific actions a reporting entity will commence or cease in order to comply with the AML/CTF Act.
- Seeking injunctions and/or civil penalty orders in the Federal Court.
- Referring a matter to the Commonwealth Director of Public Prosecution for possible criminal prosecution.
We take a look at some recent AUSTRAC activity demonstrating this work in action.
AUSTRAC accepts enforceable undertaking from National Australia Bank (NAB)
An AUSTRAC investigation identified concerns about NAB’s AML/CTF program, systems and controls. AUSTRAC determined that a civil penalty proceeding was not appropriate, but that action needed to be taken to ensure that NAB more effectively combats the risks of serious and organised crime.
AUSTRAC accepted an enforceable undertaking from NAB to uplift its compliance with Australia’s AML/CTF laws. NAB has undertaken to implement a comprehensive remedial action plan, which will see improvements to its systems, controls and record-keeping, including customer identification procedures, risk assessment and due diligence, and transaction monitoring.
AUSTRAC will monitor NAB’s progress directly and an independent auditor will report to AUSTRAC annually on progress, with the final report to be provided to AUSTRAC by March 2025.
AUSTRAC joins Russia-Related Illicit Finance and Sanctions FIU Working Group
To support a coordinated international response to Russia’s invasion of Ukraine, AUSTRAC has joined the Russia-Related Illicit Finance and Sanctions FIU Working Group. The Working Group brings together the Financial Intelligence Units of Australia, Canada, France, Germany, Italy, Japan, the Netherlands, New Zealand, the United Kingdom, and the United States.
AUSTRAC commences proceedings against Crown Casinos
AUSTRAC commenced civil penalty proceedings in the Federal Court against Crown Melbourne and Crown Perth for alleged serious and systemic non-compliance with Australia’s AML/CTF laws.
AUSTRAC CEO Nicole Rose said “AUSTRAC’s investigation identified poor governance, risk management and failures to have and maintain a compliant AML/CTF program detailing how Crown would identify, mitigate and manage the risk of their products and services being misused for money laundering or terrorism financing.”
“They also failed to carry out appropriate ongoing customer due diligence including on some very high risk customers. This led to widespread and serious non-compliance over a number of years,” Ms Rose said.
Whether a civil penalty order is made and, if so, the amount, are matters that are before the court.
AUSTRAC and business working together to stop forced sexual servitude
Forced sexual servitude is a form of slavery and represents around 30 percent of slavery cases in Australia. AUSTRAC has released a new financial crime guide which will ensure that banks, businesses, and other financial institutions are able to identify coercive behaviour, take action, and alert the appropriate authorities.
Some of the financial indicators of forced sexual servitude include receiving regular domestic transfers averaging $250 per service, payments for supplies such as lingerie and beauty products, regular payments for short-term accommodation, high volumes of rideshare or taxi services, and regular use of food delivery services.
Businesses are encouraged to combine the indicators in this guide with their own transaction monitoring to identify suspected instances of forced sexual servitude, and report these to AUSTRAC.