AUSTRAC boss urges AML/CTF sign-up to stop crime gangs now

AUSTRAC CEO Brendan Thomas warned on Thursday that enrolment in Australia’s new anti-money laundering and counter-terrorism financing (AML/CTF) laws is lagging ahead of the regime’s looming start date on July 1.

Under the so-called Tranche 2 AML/CTF regime – the biggest regulatory shake-up to hit the conveyancing industry in decades – practitioners need to register with AUSTRAC, conduct due diligence on clients, note large cash transactions, keep records and report suspicious activity.

The overhaul brings Australian AML/CTF laws into line with global financial crime standards.

Speaking at a virtual summit for conveyancers, lawyers, accountants and real estate agents, Thomas urged those yet to enroll in the regime to act fast.

“People need to enroll with us over the next two weeks,” he said.

“There’s still a way to go in terms of those enrolment numbers, but, I mean, last week we’ve seen more enrolments than we have since enrolments opened, so there’s quite an uptick coming, and we’re expecting those to continue to go up.”

Thomas reiterated that the new system was aimed at combatting the flow of illicit funds into Australian real estate.

Since 2020, federal authorities have restrained more than $790 million in residential and commercial real estate properties linked to organised crime, according to AUSTRAC.

“This is about a really significant problem,” Thomas told the summit.

“It’s not regulation for regulation’s sake. By taking part in this regime, you really are helping to strengthen our economy.”

He said conveyancers were already reporting suspicious transactions to AUSTRAC, including one case that revealed links to major overseas criminal networks.

“We had no idea that person was there, and we had no idea that that money was coming into the economy. That was one conveyancer with one piece of information before the regime started.”

AIC NSW president Jennie Tonner said concerns remained about elements of the revamp, including conveyancers taking on additional risk.

“If you look at it from a conveyancer’s point of view, whilst their main job is to protect the client and minimize risk in a conveyance, we are being subjected to more and more risk ourselves because of the amount of work that is being put onto us,” Tonner said.

“The reality is probably 90 per cent of our practices will be low risk and they won’t have to do too much more enhanced due diligence but they still will come across it.”

Tonner also pointed to potential issues in regional areas on filing suspicious matter reports.

“They (regional conveyancers) are very concerned about being seen as the tip-off,” she said. “That has been something we’ve had to spend a lot of time educating conveyancers on about the protections there that they won’t know that it’s the conveyancer that’s tipped them off.”

Grant Thornton financial crime risk and compliance expert Richard Storey urged conveyancers not to underestimate compliance obligations.

“Businesses tend to underestimate the effort required to operationalise the program,” he said.

The biggest gap that we’re seeing is the gap between the institution or the organisations, firms, that have recognised that it’s not just print the policy, pop that on the shelf, and off we go,” adding that the system is “much more about having a program”.

He reminded industry that the starting point for compliance was a firm’s governing body “having the understanding of what AML is about – and it’s about protecting the community”.

Under the new laws, conveyancers must understand the source of their client’s wealth and report all suspicious financial matters to AUSTRAC, which has said it will not hesitate to pursue non-compliant industry players.

Publisher’s Note: The Industry Collective Speaks virtual event was held on Thursday, June 18. It was hosted by InfoTrack and supported by Australian Conveyancer, Securexchange, and triSearch.