Australia’s Latest Insights on Combating Money Laundering and Terrorism Financing

Money laundering is a fundamental enabler of virtually all criminal activity. It also perpetuates serious crime by enabling criminals to reinvest their illicit profits into further crime.

“Crimes like money laundering and terrorism financing erode trust in Australia’s financial system and the security of the Australian population. Criminals might be persistent, but so are we,” AUSTRAC CEO, Mr Thomas said.

“That’s why AUSTRAC has worked with the national intelligence community, law enforcement and regulatory agencies, together with industry and international financial intelligence units to build these risk assessments.

“We have drawn on insights and data from all these groups to capture a comprehensive picture of what is happening across our nation.

“These NRAs will help strengthen Australia’s anti-money laundering and counter terrorism financing (AML/CTF) regime, which is a key component of the national, cooperative approach to countering serious and organised crime. It has been a joint effort that everyone should be proud of,” he said.

The Money Laundering in Australia: National Risk Assessment found that despite new channels emerging, launderers still prefer to conduct their operations via traditional methods using cash, banks, luxury goods, real estate and casinos.

“We know, through the good work of our colleagues in the Australian Criminal Intelligence Commission, that the value of the domestic Australian drug market is worth at least $12.4 billion dollars per year,” said Mr Thomas.

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

“And that’s only one type of crime driven by Australian organised crime groups. The exploitation of digital currencies is increasing. This helps criminals move funds quickly, cheaply and with what they perceive as a degree of anonymity,” he added.

The second NRA released today, Terrorism Financing in Australia: National Risk Assessment, found that retail banking, remittance and exchanging cash remain the preferred avenues to move funds. Most of these illicit funds go to overseas terrorist organisations and affiliated groups. Social media and crowdfunding platforms have also become integral to fundraising terrorist activities.

AUSTRAC CEO Brendan Thomas said the risk assessments will help businesses understand the methods that criminals use to launder proceeds of crime or fund extremist violence.

“I encourage businesses to read them, understand how they might be exposed and ensure they have the necessary anti-money laundering and counter-terrorism financing (AML/CTF) measures in place.”

Mr Thomas also said the money laundering risk assessment identifies sectors that are highly vulnerable to criminal exploitation but not covered by the current AML/CTF framework.

“We know there are particular sectors that pose money laundering and terrorism financing risks and are consistently exploited – knowingly and unknowingly – by transnational, serious and organised crime groups to disguise and launder criminal wealth,” he said.

The Australian Government has proposed reforms to simplify Australia’s AML/CTF framework and extend it to higher risk services, including professional services provided by lawyers, accountants and real estate agents.

“These businesses are uniquely positioned to provide insights into suspicious behaviour through the services they provide. Reports from these businesses will help build a more complete picture of money laundering activities that assist law enforcement activities in combatting serious and organised crime from child sexual exploitation to scams.

These new national risk assessments supplement AUSTRAC’s existing suite of resources and guidance designed to support regulated businesses to understand, identify and manage the particular money laundering and terrorism financing risks they face, and meet their AML/CTF obligations.

To find out more about the proposed reforms, visit the AUSTRAC website.