In response to recent international agreements, proposed changes to Australia's anti-money-laundering laws will mean increased penalties for non-compliance and a broader range of obligations concerning reporting, investigations, property-tracking and disclosure.
If the three proposed new laws dealing with money-laundering are passed by the Commonwealth Parliament it will affect all entities that collect, hold, exchange, remit or transfer cash and non-cash funds on behalf of others. This would include financial corporations, insurers, securities dealers, futures brokers and trustees, and all would need to implement additional internal controls.
The federal government plans to introduce the following changes:
- A new regime for dealing with the proceeds of crime will aim to enhance the effectiveness of Commonwealth laws dealing with money-laundering, particularly by preventing the reinvestment of the proceeds of crime in further criminal activities and by allowing the law enforcement authorities to trace the proceeds of crime through accounts and property holdings (Proceeds of Crime Bill 2002);
- New laws will be introduced to control the financing of terrorist activities (Suppression of the Financing of Terrorism Bill 2002); and
- Existing Commonwealth laws on money-laundering in various Acts will be restructured and replaced (Proceeds of Crime (Consequential Amendments and Transitional Provisions) Bill 2002).
While the anti-terrorist aspects of the proposals will probably be refined before enactment, financial services businesses are still likely to be affected significantly by the new obligations of reporting, the new requirements for dealing with customers' assets, and the requirement to respond to orders for investigations and production of documents. The application of these proposals to complex financial businesses will need careful consideration.
Some Australian financial companies are already grappling with how to deal with the US Patriot Act. These international developments and local comprehensive changes should trigger a timely review of a company's internal anti-money-laundering procedures and strategies.