Australia has strong legal, law enforcement and operational measures for combating money laundering and terrorism financing, but important improvements are needed in a number of key areas, according to a new report by the Financial Action Task Force and the Asia/Pacific Group on Money Laundering.
The Mutual Evaluation Report of Australia, recognises that Australia has a good understanding of its money laundering risks, coordinates domestically to address these risks, and has highly effective mechanisms for international cooperation. However, the authorities focus more on the disruption of predicate crimes, rather than on the laundering of the proceeds of these crimes and their confiscation. Therefore, while the report recognises that Australia develops good quality financial intelligence which it shares with law enforcement bodies and other authorities, the report concludes that this information should lead to more ML/TF investigations.
“Australia has made sound progress in implementing the FATF international standards for combating money laundering and terrorism financing since its last evaluation in 2005. While the FATF recognises the positive improvements made by the Australian government, we seek to encourage further actions in a number of areas highlighted in this report”, says FATF Vice President, Je-Yoon Shin.
Australia faces a range of terrorist financing risks, largely motivated by international tensions and conflicts. It uses its comprehensive legal framework as well as other criminal justice and administrative measures to successfully combat terrorist financing.
Australia has in place a direct legal obligation to automatically freeze assets as soon as an entity is designated by the United Nations for terrorism-related activities. This is a good example for other countries, as are the numerous designations made under the domestic regime. However, the lack of supervision for compliance with these requirements is a gap in the system.
While Australia regulates its major money laundering and terrorism financing channels, such as banking, remittance and gaming, it should improve supervision of its regulated sectors. Most designated non-financial businesses and professions (DNFBPs) are still not subject to anti-money laundering / counter-terrorist financing (AML/CTF) requirements and have insufficient understanding of their risks. These include real estate agents and lawyers, which the authorities assessed as high risk for money laundering and terrorist financing. The report concludes that Australia should do more to demonstrate that they are improving AML/CTF compliance by reporting entities and that they are successfully discouraging criminal abuse of the financial and DNFBP sectors.
The FATF is the global body responsible for setting and monitoring international standards on combatting money laundering and the financing of terrorism. A FATF Mutual Evaluation is a year-long peer-review conducted by an international panel of experts. The Mutual Evaluation Report provides a detailed and complete assessment of Australia’s system to combat money laundering and terrorist financing, and assesses Australia’s level of compliance with the FATF Recommendations. The report also includes recommendations to Australia on the improvements needed.