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 AML/CTF Act was developed in close consultation with industry stakeholders from 2004 to 2006. The AML/CTF Act regulates financial, gambling, remittance and bullion sectors that provide designated services listed in the AML/CTF Act.
The Australian Transaction Reports and Analysis Centre (AUSTRAC) is Australia's AML/CTF regulator and specialist financial intelligence unit.
The AML/CTF Act provides the means to help detect and deter money laundering and terrorism financing. 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 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 ongoing customer due diligence are all designed to assist regulated businesses to identify suspicious matters and report them, regardless of their own perceptions of risk.
For more information, including the AML/CTF Rules and Regulations, visit the AUSTRAC website.
Reviews of Australia's AML/CTF regime
Between 2014 and 2015, Australia's AML/CTF regime has undergone two concurrent reviews:
Working Group on Remittance Account Closures
In mid-2014, the Australian Government began receiving reports that financial institutions, in particular banks, were closing or declining to open bank accounts for registered non-bank or 'alternative' remittance service providers. This practice is often referred to as 'bank de-risking'.
The government engaged with the banks and representatives of the remittance sector to discuss the issue. Following the discussions, a working group was formed in December 2014 to establish a communication mechanism between financial institutions and small to medium sized alternative remitters on issues related to de-risking.
The working group met monthly between December 2014 and May 2015, and held a final meeting on 16 September 2015. The details of the working group and its outcomes are set out in the Working Group on Remittance Account Closures Outcomes Statement.