Author: Nyman Gibson Miralis
Subject: Money laundering
Keywords: Money laundering, financial fraud, financial crime, terrorism financing, combating money laundering offences.
Money laundering is a crime which has been increasingly on the radar of lawmakers around the world in recent years, in large part because of its links to other serious criminal activity.
As it is, by definition, the concealment of the source of funds in order to mask their true origin, money laundering and related financial fraud is often either the basis of or deeply intertwined with other organised crime such as weapons and narcotics trading or terrorism financing.
The international Financial Action Task Force (FATF) has been issuing recommendations for member states outlining the most effective guidelines for combating money laundering offences since 1990.
In 2015, it released its Anti-Money Laundering and Counter-Terrorist Financing Measures – Australia report, which makes various observations on how Australia is performing against international standards.
Although Australia is performing relatively well against international criteria for dealing with money laundering, the report does make a number of recommendations for improvements which could be implemented.
The report separates recommendations into various categories, specifically:
- Financial intelligence
- Investigations and prosecutions
- Confiscation (of funds)
Australia’s financial intelligence scorecard
The report forms the view that Australian financial intelligence is already quite advanced, thanks to the collation and analysis of information obtained by the Australian Transaction Reports and Analysis Centre (AUSTRAC), Australia’s financial investigation unit. However, the report does recommend that:
- Improved and increased reliance on information obtained and disseminated from AUSTRAC to law enforcement officials should occur. In particular, performance indicators should be set around law enforcement personnel and legislators relying on AUSTRAC-sourced information to conduct increased numbers of investigations into terrorism funding and money laundering.
- Funds should be specifically set aside in both state and federal budgets to ensure that all levels of law enforcement have dedicated anti-money laundering and terrorism funding teams. It is considered important that those teams are not only set up for short-term projects, but that they be able to operate for longer periods.
- AUSTRAC’s information outputs should be better tailored to intended recipients (such as the Australia Federal Police), rather than simply providing raw and unanalysed data.
- The information which can be accessed and included by AUSTRAC in its database should be more comprehensive and include, for example, records of criminal convictions.
How can Australia improve investigation and prosecution?
In regard to investigations and prosecutions, the report suggests that:
- The focus of Australian law enforcement should expand beyond crimes committed with or involving laundered money to specifically address the stand-alone crime of money laundering. By targeting money laundering at its most basic level, it is anticipated that other predicate crimes relying on ill-gotten funds can also be prevented.
- Corporate structures, which have traditionally been of lesser focus in the area of money laundering criminal investigations, should be brought more into the spotlight and proactively reviewed by law enforcement. This should include the imposition of sanctions on corporations where appropriate.
- Although a “sexier” topic, attention by law enforcement should be taken off drug trading and brought back to underlying evidence of money laundering.
- Similarly, foreign offenders should be monitored and where possible charged and prosecuted by Australian law enforcement, in order to limit risks faced by Australia.
- Efforts should be made to ensure that Australian state and federal laws in relation to the prevention and prosecution of money laundering are consistent and easily interchangeable.
Clawing back the proceeds of crime
Finally, confiscation of ill-gotten or criminally obtained funds is a hot topic for Australia in this arena. The report recommends:
- Ensuring that confiscation of proceeds of crime occurs as frequently and regularly as possible, so that it can begin having a deterrent effect. Moreover, the possibility for restitution being extended to victims of financial crimes should be considered.
- Improving Australia’s capacity, both at legislative and practical levels, to pursue and confiscate funds even when they are contained within complex corporate structures or located offshore.
- Focusing on recovery of criminal proceeds which extend beyond the current favourite, which is income earned from the drug trade.
- Taking further steps to track interstate and international movements of significant cash transactions, with a view to assessing whether this could be evidence of money-laundering operations.
Although Australia is considered by the FATF to be performing relatively well in accordance with the international efforts to curb money laundering, there are numerous recommendations which could be implemented to hone and fine-tune our approach on a national and global scale.
Nyman Gibson Miralis are experts in transnational money laundering investigations, assisting companies and individuals who are the subject of investigations by AUSTRAC, the AFP, ATO and ACIC. If you require assistance, contact one of our expert criminal defence lawyers