AML/CTF deficiencies in Australia

“Australia has not implemented a targeted approach nor has it exercised oversight in dealing with non-profit organisations (NPOs) that are at risk from the threat of terrorist abuse. Authorities have not undertaken a review of the NPO sector to identify the features and types of NPOs that are particularly at risk of being misused for TF.”

This is the finding from the international delegation who recently conducted an assessment of Australia’s efforts in relation to Anti Money Laundering & Counter Terrorism Financing (AML/CTF).

The mutual evaluation report of Australia sets out how well Australia has implemented the technical requirements of the FATF Recommendations and how effective its AML/CFT system is. The report presents the key findings of the assessment team and the priority actions for Australia to improve its AML/CFT system. The report was released by FATF (Financial Action Task Force) last week.

Other findings highlight a massive hole in the oversight of non-financial businesses and professions such as lawyers, accountants and real estate agents. These key sectors are not subject to AML/CTF requirements even though they have been identified to be of high ML risk in Australia’s National Threat Assessment (2011).

There are 14 findings in the report, many highlighting good work and others indicating further improvements to be addressed.

What the above to key findings indicate is that we know that charities and non-profit organisations can be used as vehicles for moving money for terrorist purposes, however there are no controls in place. So we don’t know who is interacting with these organisations in order to determine the true extent of the risk.

Also the lack of obligations and oversight of lawyers and accountants, as gate keepers of significant financial information, means that organised crime can conduct money laundering business without any concerns through these channels. We also know that organised crime figures like to spend their money on expensive houses and cars, and yet these areas are not regulated. They have been on the drawing board since 2006 and still nothing has been done. Obviously there has been no political will to see this happen.

In 2011 the ACC estimated that at least $10 billion is laundered in Australia each year.

Click here for the full FATF report