Anti-money laundering rules ready for review

The anti-money laundering and counter terrorism funding rules are being thoroughly reviewed, and changes will affect all sectors of the economy and cover enterprises of all sizes, not just "the big end of town."
 
This was one of the main messages to emerge from a series of panel discussions and presentations yesterday at the Thomson Reuters Third Party Risk InfoDay.
 
One of the panellists, Bradley Brown, Austrac's acting national manager, strategic intelligence and policy, said that while Australia has had fairly comprehensive set of legislation for some time, it was being reviewed to bring it in line with international regulations, and this process would be stretched out over the next eight years.
 
"It's extremely important for the AML regime to have due diligence systems in place that identifies the underlying beneficial ownership. This is one of the newer aspects of the AML/CTF rules and one that we will see banks focusing on more, as the major banks and the second-tier banks have a vested interest in protecting the financial system will and keeping it free of criminal abuses," Brown said.
 
His fellow panellist Aislinn Walwyn, assistant commissioner, private groups and high wealth individuals for the Australian Tax Office, also warned that this was one area which could raise red flags at the ATO. She said it was expected that professional risk managers, as part of their compliance obligations in their role as 'gatekeepers', would 'probe' for further details if they had reason to believe a client was acting on behalf of an unknown entity who was the ultimate beneficial owner.
 
Another area under the "policy development" banner is the monitoring of customers using online banking services, as this moves from a face-to-face environment to a digital money environment. "We needed to ensure that the regime is technologically neutral," Brown said.
 
"Some of the submissions to Austrac have indicated there is greater technical ability through tracking and due diligence online [compared] with what we currently do through face-to-face engagement with the customer."
 
Brown also noted that consideration of the online environment would be part of all regulators' thinking from now on.
 
Speaking to Banking Day afterwards, Brown said Austrac saw the banks very much as partners.

"The reporting entities are doing the right thing the majority of the time. We can help them identify risks, and vice versa - they can help us see risks that we don't know about," he said.
 
Brown also said that, while the major banks may have very publicly backed away from providing services to the offshore remittances sector, citing the AML/CTF rules and reputational risk among other reasons, some banks were providing services to overseas remittance firms, based on their own risk assessment criteria.
 
When it comes to the newest kids on the block, the emerging professional peer-to-peer businesses, as far as Austrac is concerned there's still a learning process to underway.
 
"For us, it's still a matter of increasing awareness as to what platforms are being used and what the risks are for those particular platforms," Brown said.