This charge is the first in an investigation initiated by the newly-launched National Anti-Corruption Commission

A former employee of the Western Sydney Airport (WSA) has been charged with allegedly soliciting a bribe of $200k during the procurement process for a contract to provide services at the airport. The contract was worth an estimated $5 million. 

The charge was made by the National Anti-Corruption Commission (NACC), following a joint investigation with the Australian Federal Police. The long awaited NACC was founded this past July with the goal of preventing, detecting and investigating corrupt conduct in the Commonwealth. It is the first time an independent anti corruption body has overseen the entire Commonwealth public sector.

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The revised version scales back the scope of the landmark new law

The Corporate Sustainability Due Diligence Directive (CSDDD) is legislation designed to get companies to protect the environment, maintain social justice and promote a stronger, sustainable economy. It requires that companies consider the social and environmental impact of their operations by promoting transparency and encouraging companies to be more proactive in identifying and mitigating sustainability risks. 

A watered-down version of the Directive was approved in March, meaning that it is likely to become law later this year.

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The move comes as Australia seeks to implement stricter AML laws nationwide

In an effort to prevent money laundering, Queensland implemented legislation that limits cash gambling at the state’s casinos. The new law also involves identity verification and a code of conduct at casinos. The legislation comes as Tranche 2 anti-money laundering (AML) reforms are likely to soon come into force in Australia. 

Queensland attorney general Yvette D’Ath noted that casinos will be restricted to accepting a certain amount of cash from a person for gambling-related transactions in a 24-hour period. The cash limit will be set through regulation but is likely to be about $1,000. 

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The Carers Leave Act (2023) taking effect on April 6th is a positive step, recognising the critical role unpaid carers play in society. However, a new VinciWorks poll found a significant gap between the Act’s provisions and the needs of working carers.

The Carers Leave Act, which applies to all businesses and industries, offers a week of unpaid leave – a start, but one that falls short of the significant support working carers require. VinciWorks, a leading compliance eLearning and software solutions provider, surveyed over 150 HR and compliance professionals. Its findings show that 70% of respondents believe the Act doesn’t go far enough.

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Australia’s banking sector is at medium to high ML/TF risks

A national risk assessment on major banks and other domestic banks operating in Australia indicated that they are at medium and high risks for money laundering and terrorist financing (ML/TF) activities. Tranche 2 anti-money laundering (AML) reforms are likely to soon come into force in Australia and it could help the country with its reputation as a trusted financial centre, especially after several high-profile money laundering court cases.

Australia’s banking sector sits at the centre of its financial services industry. It is hoped that the reforms will help fight the evolving threat of organised financial crime, which is estimated to cost Australia up to $60 billion a year. According to the Australian government, “Significant regulatory gaps and vulnerabilities have made Australia an increasingly attractive destination for laundering illicit funds.”

AML Tranche 2 has already been introduced by countries like the UK, Canada, and New Zealand and firms in Australia are preparing for these changes. Australia is one of only three jurisdictions that are not aligned with the Financial Action Task Force (FATF)  recommendations on international AML standards. Once the Tranche 2 reforms are implemented, they will be and this will mean changes for a range of businesses as they must comply with the regulations to avoid penalties.

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Some practical takeaways from the Law Society’s Risk and Compliance Conference

At the Law Society’s Risk and Compliance Annual Conference 2024, attendees asked their most pressing questions to a panel of experts, who provided answers that were practical, insightful and provided risk and compliance teams with information they could use in their firms.

The first question set the tone for the session. A participant noted that the Solicitors Regulation Authority (SRA) are now using a formula for fines and it has increased its fining scope. Are these fines accurate? Should the formula be reformed?

Jayne Willetts, solicitor advocate for Jayne Willetts & Co Solicitors, responded clearly that no, the formula doesn’t produce accurate results and there is no relation in the fine to the seriousness of the breach. Basically, she said, it punishes those that earn a lot of money and not others. But, she added, when the case goes to the Solicitors Distribution Tribunal, there is a better formula that is based on the actual breach.

Another question referred to the top risks on the risk register. Kerrie Machin, partner at Mitigo responded that cyber risks are at the top and it’s important to carry out a risk assessment in relation to systems and data including hijacking and changing email accounts and bank details and ransomware attacks. He noted that bad actors are beginning to recognise that data is valuable. They can steal it and threaten to reveal it on the dark web. This actually happened in the past few months to some firms. 

Kayleigh Smale, a compliance and anti-fraud specialist, said that a firm wide risk assessment is  needed to ensure that the firm is covered, and it needs to be updated as needed, such as when new technology is introduced or new practice areas. It’s important to that the risk assessment is a  living, breathing document and keeps up with the SRA’s latest AML updates.

Emma Williams, director of European risk & compliance for Simpson Thacher & Bartlett LLP, believes that your people are your top risks. They provide the highest risk exposure and with the new workplace culture rules, the situation could get riskier. It’s been nearly one year since the rules were implemented so that requires review. 

Another question was raised about training, specifically the costs involved and what is the priciest element of it. 

Williams noted that fee-earners record their time to a particular code, so its difficult to see what the actual costs were while non fee earners don’t do that and its easy to see their costs are. Firms are asked by insurers and head offices what the costs are. Often for smaller firms this is complicated especially when they don’t have dedicated compliance teams. 

People, she believes, have a limited idea of what training is. It can be 10 minutes at a team meeting, it could be an e-mail, it could be video recordings. What’s important is to be smart about it and provide your staff with what they need. 

The next few questions were more technical. One participant wanted to know how to verify ID documents when a client is housebound and can’t get certified copies. Smale said that it’s important to use a risk based approach and ask if you have evidence why the client is homebound? Why can’t you pay a visit? You need to understand the risk of the matter.

Another participant asked if they need to screen counterparties for non regulated work. Williams said she thinks it depends on where you set your risk appetite. Some firms will screen everyone even if not they are not an actual client. She thinks you should but it’s not a legal requirement, although it might be for a sanctions check. Remember, to keep the check  proportionate to the type of work you are doing. 

Another participant asked about source of funds/ source of wealth inquiries in private client work. Williams agreed that it’s tricky. Do you start from a suspicious place? The firm needs to decide because there is little guidance and yet its important to understand the client’s source of funds and wealth.It’s hard to just suspect everyone, the starting point does not have to be that there is an issue.

The issue of compliance with KYC, beneficiaries with no photo ID and alternative acceptable forms of ID was raised. Smale noted that it depends on who they are. If someone doesn’t have a passport, you can confirm their identity in other ways but it requires a risk based approach. Ask yourself, what are you being asked to do? Does it make sense? It’s not a black and white issue with right and wrong answers.

Tips for getting partner engagement on risk and compliance were requested. Machin had one suggestion: Demonstrate what would happen if things went wrong and they got fined.  These are very easy areas to investigate, especially AML, and there is an obligation to deal with matters as effectively as possible. 

The touchy subject of a firm acting as a bank account was raised. Willets noted that for complicated property deals, this comes up often and usually at the last minute. It’s important that fee-earners are trained to be as alert as possible to the issue of money laundering in these kinds of cases. There are what she calls outlandish proposals such as restricting firms from holding client money, but she believes we need to ensure that the profession participates in these debates as restricting firms from client money and restricting compensation funds will be problematic for the legal profession.

Finally, participants wanted to know how to stay on top of SRA updates. Williams recommended joining Linkedin groups, checking on the SRA website, keeping up with the legal press and signing up to various newsletters.

What is proliferation financing and what do regulated entities have to do?

Proliferation Financing (PF) is an international crime which facilitates the movement and development of illegal goods in order to provide weapons of mass destruction for rogue states like Russia, Iran and North Korea. It has become an increasing cause of global concern over the last decade, and its potential consequences can be severe – from global instability to a catastrophic loss of life. 

Regulated entities in many countries are required to undertake proliferation financing risk assessments. In the UK, the Legal Sector Affinity Group (LSAG) has published updated guidance on the anti-money laundering (AML) regulations to incorporate PF. Guidance is to carry out proliferation financing risk assessments, either as part of the firm’s existing practice-wide risk assessment or as a standalone document.

VinciWorks has created a number of tools to assist with proliferation financing compliance. This includes dedicated training modules on proliferation financing and template emails to update and inform staff. VinciWorks have also produced guidance on high risk jurisdictions on PF, incorporating the latest 2024 US National Proliferation Financing Risk Assessment prepared by the US Treasury. VinciWorks hosted a webinar on how to comply with proliferation financing which can be accessed here.

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A Q&A on AI and business with Shlomo Agishtein, AI lead at Trullion

As artificial intelligence (AI) tools are increasingly becoming part of the daily processes of nearly every company and AI regulations are bearing down (we’re looking at you, AI Act) it’s more and more important to understand how to utilise and develop these tools ethically and effectively.

VinciWorks sat down with AI expert Shlomo Agishtein to discuss what companies need to understand about AI, how these tools can be used, why an AI company policy matters and how worried we should all be about AI regulation.

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VinciWorks is proud to offer a one-stop-shop safety and compliance training package for higher and further education institutions. The package includes 50 of the courses most commonly used and requested by other educational institutions so you can meet the training requirements of all your staff and students. Delivered through our centralised VinciWorks Portal, The VinciWorks Education Package provides training in 5 comprehensive suites – compliance, information security, health & safety, diversity & inclusion and performance & leadership.

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