Follow The Money

The Federal Government’s financial intelligence agency has ramped up its global data exchange and scrutiny of domestic operators.

The Australian Transaction Reports and Analysis Centre (AUSTRAC) has reported a milestone year with increased levels of national and global data sharing. The agency hit the headlines in August, alleging in the Federal Court that the Commonwealth Bank had breached anti-money laundering laws on almost 54,000 occasions.

Better use of technology and increased collaboration with other agencies has led to a substantial rise in the financial intelligence exchanged between Australia and offshore agencies, according to AUSTRAC’s 2016-17 annual report, which showed an 89 per cent rise (from 1723 to 3255) in intelligence exchanges with international agencies. Partner agencies conducted more than 2.7 million searches of its data — up 27 per cent. Information exchanges have also increased between Indonesia, the Philippines and PNG.

AUSTRAC collects and shares intelligence to discover criminal financial activity and uses data mining and analysis to monitor suspicious activity and emerging threats. It regulates more than 14,250 businesses with obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) and the Financial Transaction Reports Act 1988. These include major banks, casinos, single-operator businesses in the financial services and gambling sectors, bullion dealers and “cash dealers”.

AUSTRAC's contribution

AUSTRAC financial intelligence helped contribute an additional $116m in income tax assessments across 2518 cases, adding up to a nearly $2.7b contribution to tax assessments over the past 10 years. Its data contributed to 379 reviews by the Department of Human Services and $17.25m in savings from the increased detection of welfare fraud. The increased activity was achieved while reducing annual regulatory costs for industry by $36m.

Among the regulatory outcomes for the agency was the $45m civil penalty ordered against Tabcorp by the Federal Court — the highest civil penalty in Australian corporate history. The court found that Tabcorp had contravened the AML/CTF Act on 108 occasions over a period of more than five years.

AUSTRAC also launched its first sector-based risk assessment, on the superannuation sector. “We identified higher-than-anticipated risks of fraud, cybercrime and terrorism financing in the sector,” states the report. It led to a 78 per cent increase in suspicious matters reported by the superannuation sector. The overall risk of money laundering and terrorism-financing activity in the super sector was assessed as “medium”.

The Fintel Alliance

In March, the Fintel Alliance was set up to tackle money laundering, serious and organised crime and the financing of terrorism. This public-private sector partnership includes banks, PayPal, Western Union, NSW Police, the ATO, Border Protection and the UK’s National Crime Agency. Alliance projects have included investigating leads from the Panama Papers, detecting and disrupting criminal networks recruiting money mules, financial aspects of cybercrime and combating child sexual exploitation.

In November, AUSTRAC appointed a new CEO, Nicole Rose, formerly CEO of the Australian Criminal Intelligence Commission.