Austrac continues its crackdown on remitters

The anti-money laundering and counter-terrorism financing regulator Austrac is continuing its crackdown on the remittance industry, suspending the registration of Melbourne company AVSForex, following the conviction of its sole director for money laundering.

Austrac said it had invited AVSForex to make a submission as to why its registration should not be cancelled.

Earlier this month, Austrac cancelled the registration of a Sydney remittance company, SK Trading.

Austrac said it had been alerted to SKT's activities by the Australian Federal Police and, after a review of the business, it was satisfied that SKT's continued registration may involve a significant money laundering risk.

Last month, it suspended the registration of Bisotel Rieh Pty Ltd due to concerns about possible terrorism financing risk.

And in July, Austrac cancelled the registration of KMT Sydney Pty Ltd after finding it presented a significant money laundering, terrorism financing and people smuggling risk. KMT had been providing remittance services prior to being deregistered.

Remittance dealers are the only AML/CTF reporting entities that must register with Austrac. An amendment to the Act in 2011 tightened the registration requirements.

Remittance dealers must reapply for registration every three years. Businesses seeking registration have to demonstrate their suitability.

Austrac was given the power to refuse, suspend or cancel a registration, or impose conditions on a dealer. Its review and enforcement powers were upgraded.

Remittance dealers, who often operate outside the formal banking system, are considered within the AML/CTF regulatory community to be particularly vulnerable to money laundering.

According to the explanatory memorandum that accompanied the 2011 amendment: "Australian law enforcement authorities are aware that some international cash transfer services provided by remittance dealers are used by individuals in Australia to pay the organisers of people smuggling ventures."