Our AML/CTF Policy

 

Background

Every year, serious and organised crime costs Australia an estimated $10–$15 billion. Like any accounting or corporate advisory firm, there is a risk that Auscorporate services could be used to launder money or finance terrorism. Australian law requires us to implement training, processes, and systems to identify, manage, and reduce this risk. We do this to protect Auscorporate’s reputation, that of our clients, and to ensure compliance with relevant laws. Failure to do so may lead to social harm and result in significant penalties, including legal and regulatory actions.

Definitions

Money laundering Money laundering is defined broadly in Division 400 of the Criminal Code Act 1995 (Criminal Code) to include more than just concealing the proceeds or instruments of crime. The Criminal Code makes it an offence to ‘deal with’ the proceeds of crime or an instrument of crime. ‘Deal with’ is defined as a person receiving, possessing, concealing or disposing of money or other property as well as importing, exporting or engaging in a banking transaction relating to money or other property. Where a third party receives money which is the proceeds of crime (such as a shopkeeper carrying on their normal business) and the person has no knowledge of that fact, receipt of the money does not constitute an offence under the Criminal Code.

 What are the key features of money laundering in Australia?

Money laundering behaviour reflects the dynamic and adaptive nature of organised crime. There are four key behaviours which have been identified in Australia’s current money laundering environment:

  • Intermingling (or co-mingling) legitimate and illicit financial activity. For example, through cash-intensive businesses and front companies. This process of reinvesting criminal proceeds and providing a cover for criminal enterprise is a well-established money laundering methodology.

  • Engaging professional expertise. Criminal groups and networks engage the services of professionals (such as lawyers and accountants) to enhance their capacity to operate in both legitimate and criminal markets and conceal their illicit activity, including money trails.

  • Engaging specialist money laundering syndicates. Specialist syndicates, based in Australia and overseas, are providing specific money laundering services to domestic and international crime groups operating in Australia.

  • The ‘internationalisation’ of the Australian organised crime environment. There is almost always an international component to the money laundering cycle for major crime groups operating in Australia.

Terrorism financing Terrorism financing is a risk to Australia’s national security, financial system, commercial organisations and not-for-profit organisations (NPOs). Primarily, terrorism financing is a national security risk as it can directly enable terrorist acts both in Australia and overseas. In Australia, individuals have been convicted of terrorism offences and funds have been raised to support domestic activity and overseas terrorist groups.

In addition to funding individual terrorist attacks and operations, terrorism financing helps establish and maintain terrorist groups in Australia and foreign countries and sustains the networks that connect them. Terrorism financing supports the less violent or obvious aspects of a group’s operations by paying for daily living expenses, travel, training, propaganda activities, organisational costs, and compensation for wounded fighters or the families and dependents of terrorists who have died.

Terrorism financing also poses significant risks to any organisation involved in the activity, even if their involvement is unwitting. It can severely damage the reputation of financial institutions misused as part of the process. The integrity and work of non-government organisations such as charities and humanitarian groups can be seriously undermined if they are misused as a cover for terrorism financing activity.

Customer identification

A service that is listed in section 6 of the AML/CTF Act (because it has been identified as posing a risk for money laundering and terrorism financing) and which meets the geographical link. Designated services include various business activities in the financial services, bullion, gambling and digital currency exchange sectors. Entities that provide any of these services are reporting entities. Reporting entities have obligations under the AML/CTF Act.

Auscorporate is regulated under tranche 2 AML/CTF as it provides accounting and company services. Depending on the type of customer, Auscorporate is required to collect and verify this information, and our employees receive training in identifying and reporting suspicious matters.

Auscorporate Key AML/CTF Obligations

Auscorporate is required to:

  1. Comply with Australian AML/CTF legislation

  2. Develop and maintain a compliant AML/CTF program

  3. Conduct initial and ongoing customer due diligence

  4. Report certain transactions and suspicious activities

  5. Provide and maintain employee training

  6. Make and keep records

What is initial customer due diligence?

Initial CDD involves establishing certain information about a customer on reasonable grounds before providing them with a designated service. This ensures that you identify and mitigate relevant ML/TF/PF risks from the beginning of our relationship with the customer.

Based on collected and verified information, we must establish if the customer, any beneficial owner, or agent is:

  1. Who they claim to be.

  2. Subject to targeted financial sanctions – domestic or international restrictions that prevent dealing with their assets or making assets available to them. The Department of Foreign Affairs and Trade publishes a consolidated list of individuals and entities subject to targeted financial sanctions.

  3. A politically exposed person (PEP) – a person who holds a prominent public position in a government body or international organisation.

  4. A relative or close associate of a PEP.

What is ongoing customer due diligence?

Ongoing CDD involves monitoring and managing ML/TF/PF risks throughout our relationship with a customer. This includes: 

  • monitoring transactions and behaviours for suspicious activity 

  • updating the customer ML/TF/PF risk profile in response to various triggers

  • reviewing, updating and re-verifying information as needed. 

Ongoing customer due diligence helps protect Australia from potential ML/TF/PF activities.

What is Auscorporate required to report to AUSTRAC?

Reporting certain transactions and suspicious activities maintains the integrity of the financial system and aids law enforcement in combating crime. The types of reports Auscorporate may need to submit to AUSTRAC are: 

  • Suspicious matter reports (SMR): When we suspect on reasonable grounds that a person is not who they claim to be or that a matter is linked to criminal activity or proceeds of crime.

  • Threshold transaction reports (TTR): For individual physical currency transactions valued at A$10,000 or higher. 

  • International value transfer service reports (IVTS): For all international transfers of value transactions.

  • Cross-border movement reports: Submit when carrying physical currency or bearer negotiable instruments payable to bearer valued at A$10,000 or higher into or out of Australia.

  • Annual compliance reports: Submit an annual report summarising how we have met your AML/CTF obligations in the previous year.