01 Jun AUSTRAC issues warnings based on the responses to the Annual Compliance Report
Initialism has been working closely with reporting entities. AUSTRAC are clearly drawing a line in the sand that all reporting entities should consider.
To help reporting entities understand this new and increased level of regulatory activity by AUSTRAC targeted at the pubs and clubs sector, a few extracts from the letters sent by AUSTRAC:
“AUSTRAC’s records indicate that when completing the 2018 compliance report your responses in our view indicate that you are likely in breach of your obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act).”
“AUSTRAC notes that an AML/CTF program must be subject to regular independent review. Your response to the 2018 compliance report indicates that you are in breach of your obligation to undertake regular independent reviews.”
“AUSTRAC further notes that an AML/CTF program must contain an e nhanced customer due diligence program. Yourresponse to the 2018 compliance report indicates that you are in breacho f obligations to have an enhanced customer due diligence program.”
It is clear that AUSTRAC are drawing on information supplied through the compliance report to assess the level of
compliance and identify indicators of non-compliance or weakness in compliance.
“AUSTRAC requires your business to take immediate action to ensure that it meets its obligations under the AML/CTF Act going forward.”
AUSTRAC are making it clear that they expect Reporting Entities to urgently address the gaps in AML/CTF compliance.
“Under section 81 of the AML/CTF Act, a reporting entity must not commence providing designated servicesm (including gambling) unless it has adopted and maintains an anti-money laundering and counter-terrorism financing program (an AML/CTF program). This is a civil penalty provision.”
AUSTRAC are signaling that continued non-compliance will compound the breaches, and that if a reporting entity is offering a designated service without an adequate AML/CTF Program that may result in a civil penalty.
“AUSTRAC will be undertaking targeted reviews later this year of the compliance of businesses that have disclosed breaches in their compliance report.”
AUSTRAC will be making follow up reviews of the level of compliance later in the year, this indicates that reporting entities have a small window to address any failing identified through their compliance reporting.
“If we review your business and identify non-compliance, we will consider whether it is appropriate to take action to ensure your ongoing compliance with the AML/CTF Act.”
AUSTRAC are warning reporting entities that if weaknesses and gaps are not addressed they will consider using their enforcement powers.
If a reporting entity, when reflecting on its responses to the recent annual compliance report believes that the responses indicate areas where AML/CTF compliance could be improved, our advice is address them now before AUSTRAC possibly take action.
To discuss AML/CTF compliance and how Initialism can help, contact us at firstname.lastname@example.org or visit www.initialism.com.au