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Tranche 2 regulations cannot come soon enough, says First AML manager.
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Australia’s anti-money laundering rules ‘third world’
28 July 2022
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10 minute read
Australian financial security regulations put the nation on par with Madagascar and Haiti as a soft target for money laundering, according to one security platform.
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First AML country manager Andrew Jackson said that for Australia to achieve global standards the next phase of tranche 2 regulations needed to be implemented as soon as possible.
“There are no set regulations right now to do with the anti-money laundering and counter-terrorism financing act,” said Mr Jackson. “Australia has been recognised as an easy money laundering target.
“We’re up there with Madagascar and Haiti and a few others and it’s not the company you want to be in when you’re talking about financial security.”
Tranche 2 is an update to the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 that would apply to the legal, accounting and real estate industries.
Mr Jackson said tranche 2 would raise and level the playing field of requirements for all businesses when taking on new clients.
“What this is going to do is say there are steps you have to go through, there are certain pieces of information you have to get in order to be able to verify via an audit that you have done the checks and you do know to the best of your ability the individual or the business you’re working with is not involved in any form of money laundering,” Mr Jackson said.
A bill to introduce tranche 2 is due in upcoming parliamentary session and could apply as soon as next year.
Mr Jackson said tranche 2 would impact the accounting profession as it would require greater depth in background checks. At the moment, firms could determine for themselves how thorough checks needed to be.
“It is going to be impacting them because they will all need to do this higher level of due diligence from an anti-money laundering perspective,” said Mr Jackson.
“A number of firms when they decide to work with a new client, be it an independent individual or a business, will go through some due diligence process – they’ll gather some information that their firm deems necessary.”
Mr Jackson also said that businesses were becoming more aware of the need for anti-money laundering processes but most had yet to act.
“Businesses are starting to see that they want to take an ethical stance, they want to be doing this but until the regulations come in very few people are actively going to do everything they need to,” he said.
“There has definitely been a change in the last year or two as people are more aware of this.
“It’s in the public forum now you’ve seen Star and Crown be dragged through the inquiries, and there were some huge fines for some of the Big 4 banks last year and the year before.
“It draws attention to how prevalent money laundering is and the impact to consumers.”
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