AUSTRAC released its 2016 - 2017 Annual Report yesterday.
The Annual Report covers AUSTRAC’s operations for the year ending 30 June 2017 and specifically highlights the following areas:
Overview - AUSTRAC’s role and functions, organisational structure and outcome and programme.
Capabilities - International and policy, operations and corporate divisions.
Management and Accountability - including corporate governance, external scrutiny and asset management.
It is a fairly long report and rather than regurgitating many of the facts and figures, I thought it would be more beneficial to highlight some of the areas that would be of most concern to my clients in the SME sector.
Developed the Breach Evaluation and Response (“BEAR”) framework which targets areas of high ML/TF Risk within industry.
Developed greater regional co-operation, especially with Financial Intelligence Units (“FIUs”) in New Zealand, Indonesia and Malaysia.
Reviewed and updated Memorandums of Understanding with 6 of AUSTRAC’s 46 domestic partner agencies.
Conducted 3,255 exchanges of financial intelligence with international FIUs (89% increase from previous year).
Received 112,533,536 reports (11% increase) from Reporting Entities. Breakdown of the reports: international funds transfer instructions - 107,944,005; threshold transaction reports - 4,515,411; and suspicious matter reports - 74,120.
Imposed the highest civil penalty in corporate Australian history to Tabcorp, for breaches of the AML/CTF Act - $45 million. This involved not maintaining a compliant AML/CTF Program over 3 years; failing to lodge 105 suspicious matters on time or at all; failing to identify a customer who collected $100,000 in winnings; and not enrolling with AUSTRAC on time.
In the remittance sector, AUSTRAC:
- Suspended the registrations of 2 remitters.
- Cancelled the registration of 3 remitters.
- Reaffirmed the decision to cancel the registrations of 2 remitters.
- Refused to register or renew the registration of 5 remitters.
Instigated investigations which led to suspended sentences of two directors of an unregistered remittance service and imposed fines of $2 million.
Completed 52 compliance assessments of entities with high ML/TF Risk - this led to 73 recommendations to improve policies and procedures; and 60 requirements to address issues of non-compliance with AML/CTF obligations.
Updated AUSTRAC’s Compliance Guide thus demonstrating ways that it is providing compliance education to industry participants.
Noted that the lodgement rate of annual compliance reports had risen from 87.9% to 93%.
Undertook a stakeholder survey of partners and industry - 96% rated their level of satisfaction with AUSTRAC as ‘good’ or ‘outstanding’.
Launched Fintel Alliance in March 2017 - this is a private-public partnership designed to harness industry knowledge and resources with Government agencies, in order to enhance co-operation with matters of national security and threats of organised crime.
Produced 3 ML/TF Risk Assessments in regard to Australia’s superannuation sector, Australia’s financial planning sector and stored value cards.
Ariel & Associates Pty Ltd has had extensive experience in dealing with AML/CTF issues since the inception of the legislation in 2006. We have drafted AML/CTF Programs, undertaken Independent Review of Reporting Entities’ AML/CTF Programs and have provided holistic advice for entities to ensure their processes and policies comply with their legislative and regulatory obligations.
Should you have any queries about AUSTRAC, ASIC or other issues involving compliance, licensing, or corporate governance, please contact Jeremy Danon, director and principal of Ariel & Associates Pty Ltd on (02) 8223 3355 or at firstname.lastname@example.org.