Anti-Money Laundering, AML

Information verified correct on September 23rd, 2016

The Australian Government implemented the Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Act to get the country up to speed with similar international laws. The AML/CTF Act aims to protect businesses and lessen their risk of being abused by money launderers. It also aims to prevent anyone from using those funds for terrorism. The AML/CTF is part of the legislative package aimed to provide reforms to Australia’s existing AML/CTF regulations.

The topic of money laundering is always been hot, locally or internationally. It’s an illegal activity that all countries are sadly victims of. However, not everyone is clear as to what exactly it is.

What is “money laundering”?

Money laundering is the process of hiding or disguising the origins of illegally-gained profit, enabling the criminals to access their money without fear of being caught.

Money laundering is used by criminals to ensure that their funds will be under the radar. It ensures that the money will not be linked to their name or their organisation. These funds may be used to provide resources to more criminal groups, or worse, terrorist cells. Money laundering makes these funds look legitimate and sourced from regular business endeavors.

Money laundering usually happens in three steps: Placement of cash into the financial system; creation of complex financial transactions to cover the illegal source and finally getting the profits from the illegal funds. These steps can be changed or removed, but the outcome is the same: Money that ill-gotten is made to look like it was earned honestly.

How can we protect ourselves?

Are there laws, bills or any legalities that protect people or fight against money laundering? Yes, there are anti-money laundering laws and acts that help fight against this heinous crime.  The Financial Action Task Force (FATF) is an inter-government agency formed by the G7 countries in 1989 and currently has more than 30 member states and international organisations on its roster. It’s purpose not just to develop international response to battle money laundering, but also to promote it. It encourages its member countries to create their own regulations to prevent money laundering, and to assist other countries in doing the same.

These laws cover not just money laundering on a small business scale, but can cover up to major corporations with headquarters and offices in various parts of the world.

The recent updates to Australia’s AML/CTF act brings the country up to par with the international standards implemented by the FATF. It pushes Australia to continue maintaining excellent business relationships with other countries. It also helps in the fight against and detection of money laundering and terrorism financing by addressing the needs of local law enforcement agencies to access information on possible criminal activity.

Who are affected by these acts?

Anyone on the financial sector is strongly affected by this act. On a more specific scope, it will affect service providers like banks, credit unions, credit card companies, and generally any companies in the financial business of lending or leasing products or money. With these laws in place, it allows consumers to be updated on their rights and what steps they can take to protect these rights.

As a consumer, you are affected by these laws in a wide range of circumstances. These include, but are not limited to opening a bank account; signing up for a loan; sending or receiving (including transferring) funds through electronic means and even going into gambling transactions that go beyond $10,000.

The AML/CTF act will be implemented in stages. It also imposes some requirements on reporting entities when they’re availing or providing designated services. One of these is the stricter implementation of document presentation when it comes to verifying one’s identity. The documents required may vary depending on the business or transaction conducted. Such documents include passports, birth certificate, drivers licenses and so on.

Stricter record keeping and establishing and maintaining a local AML/CTF program is also encouraged under the AML/CTF Act. Reporting entities are also encouraged to practice strong and constant vigilance and report suspicious activities as soon as they can.

Knowing what money laundering is and what the government is doing to stop it can help you. Not only are you educated, but you will also know what to do when you know someone who is guilty of the crime, or if you are a victim of one.

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2 Responses to Anti-Money Laundering, AML

  1. Default Gravatar
    Denise | January 21, 2014

    How on earth do I get my identity verified at Australia Post if they reckon they have never heard of it and I am supposed to have the form from whatever source I have no idea. I have a Coles MasterCard that is suspended because I have not done this identity verification. So bloody annoying. They are happy to charge me interest and take my money but I cannot use the card.

    • Staff
      Shirley | January 22, 2014

      Hi Denise,

      Thanks for your comment.

      Please contact the Coles Customer Service team, they should be able to send you the relevant forms to verify your identity.

      Cheers,
      Shirley

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