MAGAZINE - Realview

STRAIGHT TALK
MARK PHILLIPS EDITOR
News that Islamic extremists in Melbourne were close to launching
a potentially devastating attack on an Australian Army base
has probably shocked many – but it shouldn’t. The fact that the
cell was inspired by the Somalia-based terrorism movement al-Shabaab,
which is aligned with al-Qa’ida, while disturbing, is arguably no more
surprising. After all, security analysts have long warned that it was not a
case of “if” Australia would be the target of an attack, but “when”.
That the Australian Federal Police were able to stop the would-be
perpetrators before they stormed the base with automatic weapons no
doubt saved many lives, but the risk of a similar plot reaching fruition
sometime and somewhere soon remains.
What will hopefully make some sort of ongoing difference is the fact
that Australia finally got around to enacting anti-money laundering and
counter-terrorism financing laws – something comparable jurisdictions
had done several years before. Needless to say, the core aim of the legislation
is to reduce the ability of criminals and terrorists to launder funds
through Australia’s financial system.
On December 12 last year a final set of obligations were introduced
under the first tranche of the Anti-Money Laundering and Counter-
Terrorism Act, requiring reporting entities to report suspicious matters
and, if applicable, threshold transactions and international funds transfer
instructions to AUSTRAC.
Unfortunately, as James Cozens writes in this issue (see page 22), compliance
with these obligations has been patchy, and the imposition of penalties
by the regulator decidedly light-touch. As if this were not bad enough,
the Federal Government has delayed implementing Tranche II of the Act,
which is supposed to bring lawyers, accountants, real estate agents and
jewellers within the AML/CTF regime. As Cozens notes, at present these
types of businesses are not monitored at all, “providing a great roadmap
to safe havens for criminals”.
But, as reported on page 9, there have been some wins, with AUS-
TRAC accepting an enforceable undertaking from Barclays Bank following
an assessment of its compliance with AML/CTF, which exposed a number
of deficiencies and reporting breaches.
Hard on the heels of this and another enforceable undertaking, AUS-
TRAC is now finally upping the ante in its efforts to detect money laundering
and terrorism financing activity, investigate crimes and secure prosecutions.
The just-released AUSTRAC Supervision Strategy 2009-2010
“AUSTRAC is now finally upping the ante in its
efforts to detect money laundering and terrorism
financing activity, investigate crimes and secure
prosecutions”
sets out the agency’s plans for supervision and, where necessary, enforcement action, within the
evolving AML/CTF environment.
Against a backdrop of growing criticism for a perceived lack of enforcement against noncompliant
entities within the financial services sector, AUSTRAC acting CEO Thomas Story
has undertaken to “adapt our supervision approach as we move from implementation into a
business-as-usual phase of AML/CTF reform”.
“The central focus of our supervision strategy is maximising coverage of the regulated population
by matching different supervisory tools and techniques to different industry sectors based on
their varied levels of compliance. This will involve a greater variety of supervision methods in the areas
of engagement, support, resources, frontline activity and enforcement,” he said.
This is to be welcomed, especially given that Prime Minister Kevin Rudd has warned of “an enduring”
threat of terrorism in Australia and acknowledged that it is “alive and well”.
Perhaps he should also acknowledge that there is no excuse to continue delaying Tranche II of
the AML/CTF Act.
“
Failure to implement Tranche II [of the
AML/CTF Act] makes the whole exercise read
What’s your
like an episode of the British television classic,
take on this quote?
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Yes Minister.
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4 RISK August 2009