Australian Transaction Reports and Analysis Centre

Australian Transaction Reports and Analysis Centre (AUSTRAC) is an Australian government financial intelligence agency set up to combat money laundering, organised crime, tax evasion, welfare fraud and terrorism.^[2] AUSTRAC was established in 1989 under the Financial Transaction Reports Act 1988^[3] and continued in existence under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act).^[4] AUSTRAC's head office is in Sydney, New South Wales.

The Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) came into law on 12 December 2006,^[5] and extended the existing monitoring regime to cover financing of terrorism and listed terrorist organisations. Under Division 103 of the Criminal Code Act 1995 (Cth), it is illegal to finance terrorism.^[6] The Attorney-General's Department maintains a list of outlawed terror organisations. In 2014 AUSTRAC released a report, Terrorism financing in Australia 2014, which says, "Terrorism financing poses a serious threat to Australians and Australian interests at home and abroad."^[7]

Australia is a member of the Egmont Group of Financial Intelligence Units and an observer in the Camden Assets Recovery Interagency Network and is a member of the Financial Action Task Force on Money Laundering (FATF) and the Global Forum on Transparency and Exchange of Information for Tax Purposes.

Certain classes of financial services are required to be reported to AUSTRAC, in particular bank cash transactions (i.e., notes and coins) of A$10,000 or more, as well as suspicious transactions and all international transfers. The information that AUSTRAC collects is available for use by law enforcement, revenue, regulatory, security and other agencies.

Operation

"Reporting entities" are required to report transactions to AUSTRAC. Transactions which must be reported include:

• cash transactions of A$10,000 or more, or foreign currency of that value,
• international funds transfer instructions, either into or out of Australia, of any amount, and
• suspicious transactions of any kind, being transactions the dealer may reasonably suspect of being part of tax evasion or crime, or might assist in a prosecution.

Australia's cash controls require travelers to report to AUSTRAC when they carry $10,000 or more (or equivalent in a foreign currency) of cash (or equivalent) into or out of Australia, which can be done on forms available from the Border Force at airports and sea ports. The Border Force attempts to detect evasion of this requirement. Airlines are not liable for what their passengers carry. Cross-border movement of bearer negotiable instruments of any amount must also be reported if requested by a Border Force or police officer.

It's an offence under the Act for anyone to split a transaction into two or more parts with a dominant purpose of avoiding the reporting rules and thresholds.

Certain classes of transactions are exempt, or may be exempted on application. For example, established customers transacting amounts typical of their lawful business, such as for payroll, or retail or vending machine takings, etc. Motor vehicle traders are specifically not eligible for exemption, as are boats, farm machinery and aircraft traders.

Under the Freedom of Information Act 1982, any person can access records held by AUSTRAC, subject to certain exemptions.^[8][9]

Reporting entities

Entities which are required to report transactions to AUSTRAC are called "reporting entities", which are specified in the AML/CTF Act. These entities deal in cash, bullion and financial transactions, and include:

• banks and similar financial institutions, such as building societies
• corporations
• insurance companies and intermediaries
• securities dealers, such as stock brokers
• unit trust managers and trustees (but cash management trusts transacting only by cheque or similar are exempt)
• travelers cheque or money order issuers
• cash carriers and payroll preparation businesses
• casinos
• bookmakers, including totalisator agencies
• bullion dealers
• solicitors, acting on their own behalf (e.g., their trust fund, or originated mortgages)

Identification

Reporting entities must identify their customers using the 100 point check system. Accounts may only be opened, but can only be operated (i.e., withdrawals made) by an identified customer; an unidentified customer is blocked from making withdrawals. Generally identification can be transferred from one account to another, so that for instance a person once identified does not need to produce documents again when opening a second account at the same institution.

For banks and similar reporting entities, identification requirements are determined by a risk-based approach, which may differ for each reporting entity.

It's an offence to open or operate an account with a reporting entity under a false name, punishable by a fine or up to 2 years imprisonment.

Other agencies

The information that AUSTRAC collects is also available to a large number of government agencies, including:

• Australian Taxation Office (ATO)
• State and territory revenue offices
• Child Support Agency Australia (CSA)
• Australian Federal Police (AFP), and which may then communicate information to foreign law enforcement agencies, with appropriate undertakings
• State and territory police services
• Australian Security Intelligence Organisation (ASIO)
• Australian Crime Commission
• Australian Securities and Investments Commission (ASIC)
• Australian Border Force
• Centrelink (added in 2004)
• State commissions and royal commissions against corruption -
  • Crime and Misconduct Commission, Queensland
  • Corruption and Crime Commission, Western Australia (added in 2004)
  • Independent Commission Against Corruption, New South Wales
  • New South Wales Crime Commission
  • Police Integrity Commission, New South Wales
• Foreign countries, with appropriate undertakings.

Enforcement

One prominent attempted evasion of the AUSTRAC rules took place ahead of the Dutch takeover of TNT (see TNT N.V.) in 1999. Simon Hannes was an executive at Macquarie Bank, which was advising TNT, and he bought about $90,000 of TNT call options under the name "Mark Booth" to profit when the bid was announced. He was convicted of insider trading but also of two offences under the Financial Transactions Reports Act since he had made multiple cash withdrawals and deposits each just under the $10,000 threshold, apparently to avoid that reporting. His sentence for those transactions was 4 months jail.^[10][11]

In 2009, an investigation carried out by officers of AUSTRAC and other agencies determined that funds were being sent from Australia for use by the Somalia-based terrorist group, al-Shabaab. Money was remitted, with false names used to obscure the money trail. This investigation lead to the ultimate arrest of the suspects on charges of conspiring to commit a terrorist attack on an Australian army base.^[12]

In 2014, Australian authorities feared that money being transferred from Australia to Somalia could be used for terrorist purposes. In 2015, Australian banks ceased to provide money-transfer facilities to Somalia.^[13][14]

See also

• List of Australian Commonwealth Government entities
• Terrorism financing
• Terrorism in Australia

References

External links

• AUSTRAC web site