The Financial Action Task Force (FATF) (an inter-governmental body which sets standards for addressing money laundering and terrorism financing) recently handed down its Mutual Evaluation Report on Australia’s AML/CTF regime.  The last report was completed in 2005, and Australia’s AML/CTF regime has changed significantly since then.

While the report was generally positive, FATF identified a number of areas which could be improved. 

  • Non-financial businesses and professional sectors (eg law firms, real estate agencies) and non-profit organisations (eg charities) are not regulated by the AML/CTF regime.  
  • The limited use of AUSTRAC information to commence ML/TF investigations was noted as a ‘weakness’ in the regime.  
  • AUSTRAC’s use of enforceable undertakings to address deficiencies by reporting entities instead of monetary penalties had ‘minimal impact’ on ensuring compliance among reporting entities not directly affected by an enforceable undertaking.  AUSTRAC has never fined a reporting entity for failing to meet its AML/CTF requirements.

At this stage, it is not clear whether the mutual evaluation report will significantly change the AML/CTF regime.  The Australian government has vowed to look closely at FATF’s findings (as part of its statutory review of the AML/CTF Act which is currently underway).

Now is a good time for reporting entities to do an AML/CTF ‘health check’ to ensure that they are doing everything they can to comply with their legal requirements.  Have you amended your program and processes after the changes to the rules last year, or did you adopt a transition plan?  When was the last time your AML/CTF program and processes were audited?  Gadens can help you with all of these tasks.