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.

Continue reading