AUSTRAC ‘escalating’ Tranche 2 enforcement call

A LEADING AML/CTF compliance expert has warned tens of thousands of businesses remain outside federal Tranche 2 reforms amid an “escalating” AUSTRAC crackdown.

AML Partners founder John Nguyen said official data indicated around 35,000 entities were unaccounted for in the system that started in July aimed at curbing organised crime in the  property system.

Earlier this month, AUSTRAC said 62,710 firms were yet to enrol in the regime.

With around 80 per cent of conveyancers enrolled, Nguyen said it was only a matter of time until AUSTRAC hit the minority that had failed to sign on.

“My warning to conveyancers still not enrolled is that not enrolling doesn't mean you're outside the system,” he said.

“It means you're non-compliant and visible. AUSTRAC is finding these businesses through its own data and intelligence holdings.

“Every day you remain unenrolled while acting on settlements adds to your exposure, and the liability sits with the principal, not the junior staff member.”

According to Nguyen, the regulator was ramping up enforcement actions after issuing warning notices to lagging firms in August.

AUSTRAC, bolstered by $100 million of extra budget funding, was going sector by sector targeting non-compliant operators, he said.

“It started with real estate, accounting and jewellery businesses, at $21,840 for a company and $4,368 for an individual, and those can accrue daily,” Nguyens said.

“AUSTRAC has said plainly it is actively looking for businesses that haven't enrolled and will issue more notices.

“Conveyancers shouldn't assume they're next in line for a softer approach.”

Beyond infringement notices, AUSTRAC has “the full toolkit” of penalties at its disposal on Tranche 2, he warned.

Options included enforceable undertakings, remedial directions and civil penalty proceedings in the federal court, he said.

AUSTRAC did not immediately respond to a request for comment.

Since 2020, federal authorities have restrained more than $790 million in residential and commercial real estate properties linked to crime, prompting the laws that brought Australia into line with international standards, according to AUSTRAC.