Australia’s existing anti-money laundering and counter-terrorism financing (AML/CTF) regulatory regime has had an upgrade, with a bill to amend the current legislation introduced in Parliament this week.
The Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2024 brings “long overdue” reforms to fruition, after two rounds of stakeholder consultation in 2023 and 2024 were conducted by the Attorney-General’s Department and the Australian Transaction Reports and Analysis Centre (AUSTRAC).
If the Bill is passed by Parliament, it would amend the current Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) to bridge a “significant regulatory gap” and cover potential criminal activity within ‘tranche-two’ entities, including lawyers, accountants, real estate professionals and dealers in precious stones and metals. It will legislate the effective “deterrence, detection and disruption” of money laundering and terrorism financing, as well as ensure Australia meets the international standards enforced by global financial watchdog, the Financial Action Task Force (FATF).
The Bill comes after the FATF in 2015 said Australia was not compliant with several standards, including extension of the existing AML/CTF regime to such ‘tranche-two’ entities.
“Australia is now one of only five jurisdictions out of more than 200 that do not regulate these tranche-two entities or ‘gatekeeper’ professions,” a statement from the Attorney General, the Hon Mark Dreyfus KC MP, said.
“It means Australia is at serious risk of being ‘grey-listed’ by the FATF, which would not only be damaging to our international reputation but could result in significant economic harm to Australians and businesses.
“The Government is taking the opportunity to simplify, clarify and streamline the AML/CTF regime. This will reduce the regulatory burden on businesses and make it easier to understand and implement effective measures to combat financial crime. The reforms will allow businesses to take a risk-based approach, allowing industry to prioritise their resources. The reforms will also lead to better quality financial data and make it easier for businesses to protect themselves from misuse by criminals.
“The Government thanks the representatives of ‘tranche two’ entities who engaged constructively in consultations on this Bill.
“The Bill will modernise Australia’s AML/CTF system to ensure it keeps pace with our global financial system – closing the gaps that increasingly sophisticated and professional criminal organisations can exploit. This includes extending the current regulation of virtual asset service providers, that are exploited by serious and organised crime groups to launder the profits of their crimes and hide the origin of funds.”
The amended legislation will also bring up to modern standards the regulation of virtual assets and payments technology within the context of AML/CTF.
According to AML software provider, First AML, an estimated $10 to $15 billion of criminal proceeds are ‘washed’ each year.
“The world is a risky place, and criminals will use whatever means they can to move dirty money around and hide it from the authorities,” First AML CEO, Milan Cooper, said.
“This bill addresses the loophole that has exempted accountants, lawyers, and real estate agents from scrutiny and finally brings Australia into line with the world’s best practices.
“Australia was one of only five jurisdictions without legislation to regulate ‘tranche-two’ entities, including service providers like accountants, lawyers and real estate agents.
“As an established player in this space, this is the reform we know has been needed for some time, so congratulations to the Albanese government for introducing this vital piece of legislation.”
The Attorney-General’s Department and AUSTRAC held over 100 meetings and engagements with industry and government stakeholders during the consultation period, and received over 270 written submissions.
