Australia has a strong regime to fight money laundering and terrorism financing. Our department is the policy agency responsible for the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act).
The Australian Transaction Reports and Analysis Centre (AUSTRAC) is Australia's anti-money laundering regulator and specialist financial intelligence unit.
The AML/CTF Act was developed in close consultation with industry stakeholders from 2004 to 2006. The previous government decided to implement Australia's AML/CTF reform in two tranches.
The first tranche regulates financial, gambling and bullion sectors that provide 'designated services' listed in the AML/CTF Act.
The second tranche will extend this regulation to non-financial business and professions such as lawyers, accountants, jewellers, real estate agents and trust and company service providers.
The AML/CTF Act provides the means to help detect and deter money laundering. It also provides financial intelligence to revenue and law enforcement agencies. It imposes five key obligations on regulated businesses:
- enrolment - all regulated businesses need to enrol with AUSTRAC and provide prescribed enrolment details
- establishing and maintaining an AML/CTF program - to help identify, mitigate and manage the money laundering and terrorism financing (ML/TF) risks a business faces
- customer due diligence - identifying and verifying the customer's identity, and ongoing monitoring of transactions
- reporting - notifying authorities of suspicious matters, threshold transactions and international funds transfer instructions
- record keeping - businesses are required to keep records of transactions, customer identification, electronic funds transfer instructions and details of AML/CTF programs.
The AML/CTF Act sets out general principles and obligations. Details of how these obligations are to be carried out are set out in the Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (No. 1)(AML/CTF Rules).
The AML/CTF Act implements a risk-based approach to regulation.
Businesses must meet the minimum obligations set out in the AML/CTF Act and AML/CTF Rules. Beyond that, each business must assess the risks of potential money laundering or terrorism financing when providing a designated service to a customer.
Obligations such as 'know your customer', transaction monitoring and on-going customer due diligence are all designed to assist regulated businesses to identify suspicious matters and report them, regardless of their own perceptions of risk.
All relevant rules and regulations are available on the Australian Transaction Reports and Analysis Centre website.