Time’s up: AUSTRAC to get tough on AML/CTF laggards
As the deadline has passed for practitioners to enrol in the AML/CTF reform program, the AUSTRAC boss has warned of a crackdown on those not on board. Now with a $100m funds boost, the regulator is well resourced for action.
AUSTRAC CEO Brendan Thomas has cautioned that conveyancers not yet part of Australia’s new anti-money laundering and counter-terrorism financing (AML/CTF) regime face looming regulatory action, after the enrolment deadline closed on July 29.
Under the new Tranche 2 AML/CTF regime – the biggest conveyancing industry overhaul in decades – practitioners were given a 28-day window to enrol with the financial crime regulator after the landmark reforms commenced last month.
Mr Thomas said AUSTRAC was preparing to come down hard on those still unenrolled, even as conveyancers had “enrolled strongly” as “one of the most engaged industry sectors”.
“There are still some businesses that haven’t enrolled, and they need to do that as soon as possible,” Thomas told Australian Conveyancer in a statement.
“We will soon start taking action against businesses that don’t enrol, so avoid that by enrolling.”
The comments come after the AUSTRAC boss in June told an industry event that the regulator would not hesitate to pursue non-compliant conveyancing firms.
AIC VIC president Shakila Maclean urged AUSTRAC to work collaboratively with the industry instead of imposing fines, especially when it came to small operators.
“They think it’s ok to go after the small to medium enterprises, the micro businesses that are employing people. For me that frustrates me to hear,” Ms Maclean told Australian Conveyancer.
She said a better course of action would be proactive engagement with “small offices” to “see what they have to do (on AML), then understand that fining them is not the solution”.
“Obviously, at this stage enrol, but at the same time I’m talking to practitioners that are leaving the industry because they don’t want to enrol,” Maclean added.
John Nguyen, an AML/CTF expert at Sydney-based AML Partners, said it was likely initial AUSTRAC enforcement action would target the big end of town.
“That’s the lowest hanging fruit,” he said, anticipating AUSTRAC to “find the biggest operators that have not registered, contact them, and ask them why they haven’t.”
With AUSTRAC allocated an extra $100 million in the latest federal budget, Nguyen said it now had the extra resourcing and personnel to mount a nationwide crackdown.
“They’re basically uplifting their data capability in the next two years and I know they’ve also doubled their number of staff,” the AML specialist said.
“They’re not going to sit on their hands. They’ve got budget for it, they’ve got the workforce – they’re going to be very active about making sure that people do register.”
Nguyen said non-compliant firms could expect a letter from AUSTRAC asking them to explain why they had not enrolled, with a possible fine of $19,500 per day.
“If they haven’t registered yet, they’re already incurring fines they might not even know of.”
Since 2020, federal authorities have restrained more than $790 million in residential and commercial real estate properties linked to organized crime, prompting the new AML/CTF laws that bring Australia into line with international standards, according to AUSTRAC.
