Financial intelligence regulator AUSTRAC will face questioning about its ability to effectively monitor and enforce breaches of the Anti-Money Laundering and Counter-terrorism Financing Act at a hearing scheduled to take place on Friday.
The hearing is expected to shine a light on the opaque dealings of the once-low profile regulator, which is poised to see a sevenfold increase in the number of entities that report to it under a much-delayed package of reforms to the AML-CTF Act.
Under the changes known as “Tranche Two”, the number of entities that report to AUSTRAC would rise from about 15,000 entities to more than 100,000 with lawyers, accountants and real estate agents forced to join the reporting regime.
Labor Senator Deborah O’Neill expressed concern about AUSTRAC’s ability to manage its current workload, let alone the tens of thousands of additional entities, saying the public needed confidence in its abilities if its remit was expanded.
“AUSTRAC need to be upfront with the Australian public in what their capacities are,” Senator O’Neill said.
“Tomorrow’s hearing will be an opportune time to inform the Australian public how AUSTRAC operate and more importantly what AUSTRAC is not picking up,” Senator O’Neill said.
The organisation expected to face questions about the Westpac case that saw the bank cough up a $1.3 billion settlement, a botched report that alleged the Vatican transferred $2.3 billion to the Australian Catholic Church and its handling of alleged AML-CTF breaches at Crown Casino.
It is also expected to be asked about its involvement in the detection and disruption of an international money laundering ring that saw cocaine cartels launder half a billion in drug money through nine Australian banks between 2014 and 2017.
AUSTRAC will be represented by deputy chief executive Peter Soros, who will be accompanied by national manager of regulator operations Nathan Newman, national manager of legal and enforcement Katie Miller and national manager of education, capability and communications Brad Brown.
AUSTRAC has become an increasingly important player in the financial services regulatory landscape after it secured $2 billion in settlements from the Commonwealth Bank and Westpac for AML-CTF breaches. Senator O’Neill said Australians needed to be able to trust AUSTRAC’s abilities.
“Only just recently we have seen their slow response with Crown Casino, their typos which led to misreporting of billion-dollar figures with the Vatican Bank and how they missed over $500 million of drug cartel moneybeing laundered through Australian banks,” Senator O’Neill said.
Labor has called on the government to follow through on its promise to implement the reforms which would see lawyers, accountants and real estate agents obliged to report suspicious transactions in the same way that banks are required to fill in a 10-part report with 50 questions and hundreds of fields.
The hearing will be held by the Parliamentary Joint Committee on Corporations and Financial Services as part of the Oversight of ASIC, Takeovers Panel and Corporations Legislation inquiry. ASIC’s commissioners and members of its executive team will appear directly after AUSTRAC.
By James Frost, Mar 18, 2021, published on Financial Review