Australia – Know Your Customer (KYC) Rules

 

 

Australia is a regional financial center. The majority of illegal proceeds are derived from fraud-related offenses, though narcotics offenses provide a substantial source of crime proceeds.

The Government of Australia (GOA) maintains a comprehensive system to detect, prevent, and prosecute money laundering. Australian law enforcement agencies investigate an increasing number of cases that directly involve offenses committed overseas. Continuous consultation between government agencies and the private sector enables Australia to identify and address new money laundering and terrorist financing risks.

KNOW-YOUR-CUSTOMER (KYC) RULES:

 

Enhanced due diligence procedures for PEPs:

 

PEP is an abbreviation for Politically Exposed Person, a term that describes a person who has been entrusted with a prominent public function, or an individual who is closely related to such a person. The terms PEP, Politically Exposed Person and Senior Foreign Political Figure are often used interchangeably

    • Foreign PEP: YES
    • Domestic PEP: YES

Australia – KYC covered entities

 

The following is a list of Know Your Customer entities covered by Australian Law:

    • Banks
    • Gaming and bookmaking establishments and casinos
    • Bullion and cash dealers and money exchanges and remitters, including electronic funds transferors
    • Insurers and insurance intermediaries
    • Securities or derivatives dealers
    • Registrars and trustees
    • Issuers, sellers or redeemers of travelers checks, money orders or similar instruments
    • Preparers of payroll in whole or in part in currency on behalf of other persons
    • Currency couriers

Australia – Suspicious Transaction Reporting (STR) Requirements:

 

Number of STRs received and time frame: 44,775 from January 2010 to October 2011

Number of CTRs received and time frame: 30,342 from January 2010 to October 2011

The following is a list of STR covered entities covered by Australian Law:

    • Banks
    • Gaming and bookmaking establishments and casinos
    • Bullion and cash dealers and money exchanges and remitters, including electronic funds transferors
    • Insurers and insurance intermediaries
    • Securities or derivatives dealers
    • Registrars and trustees
    • Issuers, sellers or redeemers of travelers checks, money orders or similar instruments
    • Preparers of payroll in whole or in part in currency on behalf of other persons
    • Currency couriers

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

 

Prosecutions: 224 from January 2010 to October 2011
Convictions: 104 from January 2010 to October 2011

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

Australia has a robust regime to detect and deter money laundering and terrorism financing. The Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) provides the legal framework and establishes obligations. The Attorney-General‘s Department is the policy agency responsible for the AML/CTF Act. The Australian Transaction Reports and Analysis Centre (AUSTRAC) administers the Act, is Australia‘s financial intelligence unit and also the country‘s anti-money laundering regulator.

As of November 2011, the GOA extended its AML/CFT regulation to cover non-financial businesses and professions such as lawyers, accountants, jewelers, and real estate agents. In comparison to the size of the Australian economy and the comprehensive anti-money laundering countermeasures in place, the number of convictions for money laundering remains very low.

Third-party deposits, which can be used as vehicles to facilitate money laundering, are legal in Australia. However, authorities are working to limit the associated risks in Australia‘s financial system. On October 1, 2011, additional AML/CFT provisions came into effect, which require banking institutions to identify third parties undertaking transactions of $10,000 or more. This obligation is in addition to reporting the details of the account holder involved in the transaction, and builds on existing customer due diligence and STR obligations.

The Australian government recently established a new Criminal Assets Confiscation Taskforce, which brings together agencies with key roles in the investigation and litigation of proceeds of crime matters, to enhance the identification of potential asset confiscation matters and strengthen their pursuit.