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April 2020 insights

AUSTRAC OUTREACH ON COVID-19:  Since mid-March AUSTRAC has been reaching out to the ~15,000 businesses that it regulates recognising some of the challenges Australians and Australian businesses are facing due to the global pandemic by providing assistance and regular updates on what businesses can do to work with AUSTRAC during this period.

AUSTRAC has extended the deadline for annual compliance reports to 30 June 2020, and published guidance on how to comply with KYC and SMR requirements during the pandemic.

THE INFILTRATOR: Former US Customs Agent Robert Mazur speaks with KYC360 in a must listen to podcast and talks about the corporate responsibility and institutional motivations for engaging in money laundering activity and calls for regulatory and enforcement agencies to look more deeply into this rather than passing the blame on to compliance teams.

“Banks do not launder money, people launder money – the bottom line is getting people to be individually accountable which is much more important than punishing the shareholders with huge fines, which is often just considered a cost of doing business”.

SELF REPORTED COMPLIANCE BREACH: HSBC Australia has disclosed some compliance obligation deficiencies to AUSTRAC. No indication yet as to what the breaches pertain to or how AUSTRAC will respond. This will set precedence towards enforcing non-compliance amongst the 14,700 businesses they regulate to which many have already been impacted by the COVID-19 pandemic.

FINTRAC has updated its suspicious transaction reporting guidance to align to amendments coming into force on June 1, 2020.  The updated guidance reflects amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Suspicious Transaction Reporting Regulations.

The change concerns the timeline to submit a Suspicious Transaction Report. Currently, businesses have 30 days from the day they detect a fact providing reasonable grounds to suspect a suspicious transaction to report it. As of June 1, they will need to submit a report as soon as practicable after they have completed the measures that allow them to establish reasonable grounds to suspect a suspicious transaction.

WESTPAC AML/CTF BREACH: The fine for Westpac’s recent AML/CTF non-compliance is anticipated at approximately $900M. This spotlights the importance of the banking sector’s need to manage their vulnerabilities and risks. Outside of the obvious social impact, it is evident the cost of non-compliance far outweighs the implementation of AML/CTF financial laws.

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