Avoid out-of-the-box AML compliance, conveyancers warned

CONVEYANCERS should avoid using generic anti-money laundering compliance programs when new rules are in force.

The warning from AUSTRAC comes as the financial crimes watchdog started to roll out new AML guidance for conveyancers and property lawyers.

Under the guidelines around the anticipated use of third-party advisors and off-the-peg computer programs, AUSTRAC warned that reporting entities would still be liable for breaches.

The government agency, which is headed by Brendan Thomas and responsible for training and compliance around incoming AML reforms, pointed out that responsible entities needed to be aware of different geographical regulations.

“AUSTRAC recommends you avoid using template or global AML programs, which are not Australia-specific,” the agency warns. 

“AML obligations and risks differ between countries, regions and individual businesses.

“Template programs are generally not tailored to your business and global AML programs often don’t consider your particular obligations.

“If you adopt a template or global AML program, this could lead to serious and systemic compliance failures with your AML obligations.”

AUSTRAC acknowledges businesses could need to outsource their compliance functions to access specialist AML knowledge and expertise, as well as managing the cost of compliance.

But it also warns: “If you outsource AML functions, you remain responsible for complying with your obligations.

“Generally, your business will remain legally liable for any breach of its AML obligations, even under outsourcing arrangements, and will incur any penalty that arises from a breach.”

So-called Tranche 2 reforms that would add lawyers and conveyancers to the AML reporting regime were put before Federal Parliament in September.

Industry leaders who spoke to Australian Conveyancer for our Time to Clean House edition in July suggested that the reforms would have the biggest impact the sector has seen in a decade.

At the time, Mr Thomas spoke about the way criminals were attracted to Australia because of its stable economy and buoyant housing market that could be used to launder more than $10 billion.

Speaking at AUSTRAC’s latest National Risk Assessment, he said: “We know that the value of the domestic Australian drug market is worth at least $12.4 billion per year.

“This money then needs to be laundered through the Australian economy, every single year.”