Anti-Money Laundering (AML) and Counter-Terrorism Funding (CTF) efforts have always been important both nationally and internationally. However, a number of recent instances of bribery, corruption, money laundering and cross-border profit sharing have brought them to the forefront.
The Australian Government has announced that a prospective start-date for the long-awaited Tranche 2 will be issued early this year. Implementing Tranche 2 would extend the current AML/CTF obligations to designated non-financial businesses who have similar vulnerabilities, including the real-estate industry, high-value items dealers, lawyers, accountants and trusted services.
With a speculative start date fast approaching, it’s important that businesses who may be impacted by Tranche 2 understand why they’re vulnerable, how the change will impact them and what they can do to prepare. You may think that becoming the victim to an AML/CTF scandal may never happen to you, but any business can be the target of money laundering and terrorism funding, especially those dealing with large transactions. Here are just a few recent examples:
What can happen if AML/CTF regulations aren’t followed?
Rolls Royce, January 2017
UK manufacturing giant Rolls Royce was made to pay £671 million (AUD 1.1 billion) after a five-year-long investigation revealed that the company had been paying bribes to land export contracts.
Istanbul terrorist, January 2017
Turkish police arrested Abdulkadir Masharipov, the individual suspected of committing the terrorist attack and killing 39 people in an Istanbul nightclub. They also found on him $197,000 (AUD 261,000) in cash, two guns and drones, as well as a further $150, 000 (AUD 190,000) in another account, which was believed to be intended for his use.
Tabcorp, March 2017
Australian gambling company Tabcorp were fined $45 million after a report found that the company had failed to report suspicious behaviour on 108 occasions over more than 5 years.
Russian money-laundering, May 2017
US authorities closed a ten-year investigation by reaching a $5.8 million (AUD 7.5 million) settlement with an organisation linked to Russian money-laundering allegations, which involved corrupt Government officials, a suspicious death and a New York real estate.
Commonwealth Bank, August 2017
Australian retail banking giant, Commonwealth bank were under investigation after suspicions arose alleging the bank’s intelligent deposit machines were used by money launderers and criminal gangs.
How can these be prevented?
The above occurrences exemplify and remind us of the important role that AML/CTF plays in preventing terrorist attacks and criminal behaviour. Disrupting and denying terrorist and criminal financing makes it more difficult for groups to equip themselves, conduct their operations and attract new members.
Despite AML/CTF regulations not being compulsory for all business types in Australia, being due diligent is good business practice, that will give you a competitive advantage when negotiating deals with shareholders and other business partners.
Want to know how InfoTrack can help you be due diligent? Book a demo today!
