The crackdown on anti-money laundering and counter-terrorism financing
Earlier this year, AUSTRAC, Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) regulator, started an awareness campaign focused on the importance of anti-money laundering and combating the financing of terrorism and completing compliance assessments. To date, AUSTRAC have visited over 500 pubs and clubs who operate electronic gaming machines (EGMs) around Australia to ensure an understanding exists of the need for compliant AML/CTF programs. Following this educational campaign, AUSTRAC may potentially move to increased compliance investigations and fines being issued to pubs and clubs.
What are the AML/CTF requirements?
The Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (the Act) aims to combat money laundering and terrorism financing. The Act requires clubs with gaming facilities to report transactions and suspicious activities to AUSTRAC and take steps to prevent their business from being used by criminals. The specific obligations for clubs will depend on the number of EGMs they are approved to operate (regardless of the number of EGMs actually in operation).
If a club is approved to operate 15 or less EGMs, then it may be exempt from certain obligations, including having an AML/CTF program, customer due diligence, and submitting certain reports to AUSTRAC. However, the club will still be required to enrol with AUSTRAC and report suspicious situations.
Clubs with more than 15 EGMs have additional requirements, including maintaining an AML/ CTF program and risk assessment, carrying out due diligence on customers, and submitting threshold transaction reports and annual compliance reports.
What are the consequences of a breach?
AUSTRAC have a number of enforcement actions that include (but are not limited to):
- A direction/requirement to comply with certain parts of the Act;
- Infringement notices for contraventions of some obligations such as customer identification procedures and record keeping;
- Notice for the club to appoint an external auditor to review AML/CTF compliance, undertake a money laundering assessment, or provide AUSTRAC with information about meeting AML/CTF compliance;
- An enforceable undertaking by the club to AUSTRAC of how AML/CTF compliance obligations will be met in future; or
- An application for a civil penalty order against the club.
The Mullins Hospitality team can help you understand your obligations when it comes to AML/ CTF. With a potential crackdown looming on clubs meeting their AML/CTF obligations, we can assist with ensuring your compliance requirements are being met.
Please contact me, Matt Bradford at (07) 3224 0353, for any further assistance.