Anti-Money Laundering & Counter Terrorism Financing (AML/CTF) reviews are currently in full swing, and the regulator is expected to step up proactive monitoring.
Following criticism and concern regarding Australia's customer due diligence requirements, amendments to the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) (AML/CTF Act) were passed by parliament in December 2020, and these came into force on 18 June 2021.
The changes bring Australia into compliance with the standards published by the Financial Action Task Force (FATF), an international, inter-governmental body which develops and monitors policies to combat money laundering and terrorist financing.
The Act empowers AUSTRAC, Australia's AML regulator, with a range of measures to detect and deter money laundering and terrorism financing, including monitoring a reporting entity’s AML/CTF program, independent reviews and compliance reporting.
Through working with clients for over 20 years to streamline financial crime prevention processes and controls, our experts have a deep understanding of both the business structures of financial and other reporting institutions, and the regulatory compliance requirements that AUSTRAC will enforce.
What are the changes?
Several changes were made to improve collaboration and information sharing between agencies, increase due diligence obligations, streamline cross-border currency provisions, and in some areas reduce costs and regulatory burden.
Typically when conducting AML /CTF reviews we have helped organisations improve their AML/ CTF control framework in the following areas:
Appropriate Know Your Customer (KYC) risk assessment processes
Strengthening of gaps identified in the policy and procedure framework
Automated controls around monitoring of suspicious transaction activity, and
Effectiveness of sanctions and Politically Exposed Persons (PEPs) screening including processes in place to monitor Australian blacklists / watch lists.
How we can help?
Reporting entities, particularly ADIs and other financial institutions operating in Australia, must ensure the business has robust policies, procedures and controls in place through an AML/CTF Program to help it prevent, detect and report instances of money laundering and terrorism financing that might occur through the legitimate products and services the business offers.
The Program is required to be independently reviewed for compliance regularly.
Is your AML/CTF Risk Assessment up to date and does it adequately identify your risks?
Does your AML/CTF Program cover the updated requirements set out by the AML/CTF Act and Rules?
Have you commissioned an independent review of your AML/CTF compliance in the last two years?
Get in touch to talk to an expert about a specialist AML/CTF program review.
For further information see the AUSTRAC reforms guidance.