25 Jul Initialism White Paper: A Tranche Too Hard?
Designated Non-Financial Businesses and Professions (DNFBPs) are important business sectors that significantly contribute to the Australian economy and the business community. However, some also act as gatekeepers to financial services.
For over 15 years it has been recognised internationally that DNFBP sectors, because of this gatekeeper role, have been vulnerable to abuse by criminals and attractive to those wishing to launder the proceeds of criminal activity or finance terrorism.
Whilst Australia, as a member of the Financial Action Task Force (FATF) has been subject to international standards since 2003, the debate about the AML/CTF regulation of DNFBPs in Australia appears to be bogged-down with inaction, hyperbole, and scare-mongering.
Initialism have prepared this white paper to cut through the misinformation and positioning occurring due to vested interests, to provide an analysis of the drivers and challenges of bringing Australian DNFBPs into the AML/CTF regime and to provide a basis to foster constructive debate amongst stakeholders.
The paper looks at the ML/TF vulnerabilities, the rationale for AML/CTF regulation, the possible AML/CTF obligations, and the compliance challenges faced by the key DNFBP sectors. These vulnerabilities are not new and represent a real threat to the stability of Australia’s wider economy, as well as to the businesses themselves.
The paper also explores the background and context of the AML/CTF regulation of DNFBP sectors and provides clarity on the rationale and importance of their inclusion in AML/CTF regimes.
Ultimately, the paper poses the question – why does the AML/CTF regulation of DNFBPs in Australia and the introduction of Tranche II appear to be a tranche too hard?