Anti-money laundering and counter-terrorism financing

What’s happening?

The Australian Transaction Reports and Analytics Centre (AUSTRAC) are increasingly active in the supervision and enforcement of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act). AUSTRAC has signalled in various statements that it is prepared to take strong action against companies suspected of non-compliance.  As has been widely reported in media and in AUSTRAC’s own press releases, AUSTRAC is pursuing prosecution of alleged contraventions in the Federal Court of Australia.

Businesses must now take firm risk management action to prevent potential issues.

What’s the issue?

Businesses covered by the AML/CTF Act (namely those providing financial, bullion and gambling services) have important compliance obligations, including:

• A documented risk based AML/CTF program
• Regularly conducted money laundering and terrorist financing (ML/TF) risk assessments that are recorded and supported by a documented risk assessment procedure, and
• Provision of a periodic compliance report to AUSTRAC.

Businesses that have not adequately assessed their money laundering and terrorist financing risks and implemented an adequate risk-based AML/CTF program face the threat of significant penalties and reputational damage.  The maximum penalty for an individual contravention is $18 million for a company and $2.7 million for company directors.

Critical risks to be considered

• Environmental
• Customer
• Product
• Channel
• Business

What should you do?

Reporting entities need to ensure they are compliant with the AML/CTF Act.  A critical task is to ensure that their business can demonstrate that it has designed, implemented, documented and maintained an AML/CTF program that is based on regular assessment of its ML/TF risks.
It is imperative that regular risk assessments adequately consider key exposures.

Grant Thornton assists businesses to achieve and maintain compliance by providing a holistic AML/CTF framework.  We take a collaborative approach to the assistance we provide to our clients, not just from a compliance perspective. We provide globally recognised AML/CTF subject matter experts to deliver the following services:

• ML/TF risk assessments
• AML/CTF training
• Implementation reviews & remediation
• AML/CTF programs
• Gap assessments
• Independent reviews