Austrac investigates Perth Mint over laundering concerns
The financial crimes agency said it had ‘reasonable grounds to suspect’ some transactions relating to Gold Corporation had breached the law.
The nation’s financial crimes authority has launched an investigation into the Perth Mint on suspicion it has breached anti-money laundering and counter-terrorism financing laws.
On Tuesday, Austrac ordered an external auditor be appointed to examine the affairs of the West Australian government-owned Gold Corporation. The agency said it had “reasonable grounds to suspect” some of the $26bn in gold, precious metals and related securities transactions managed by the company to have breached the law in the last year.
Austrac said it had identified “compliance concerns” about Gold Corporation’s compliance with money laundering laws since January 2021.
While Austrac did not give details of its specific concerns, it ordered the auditor to examine Gold Corporation’s compliance with rules requiring it properly identify all of its customers and business partners and to track and report suspicious international transactions.
The auditor will have 180 days to report back to Austrac.
The Perth Mint is responsible for refining about 10 per cent of the world’s total production each year and is chaired by former Rio Tinto boss Sam Walsh.
Perth Mint chief executive Jason Waters was appointed to take charge of the organisation in January, after the sudden departure of former boss Richard Hayes in October 2021.
Mr Waters said he supported the regulator’s decision to appoint an external auditor “as part of efforts to ensure that our (anti-money laundering and counter-terrorism financing) program is robust and appropriate”.
“The Perth Mint is constantly identifying areas of improvement including addressing historic practices that are no longer fit-for-purpose and updating the way we engage with our customers,” Mr Waters said. “We are confident our strong and focused program already underway at The Perth Mint will address concerns identified by Austrac.”
Austrac chief executive officer Nicole Rose said the regulator would not hesitate to take action “where a business that we regulate is failing to satisfy their responsibility to protect themselves and Australia’s financial system from criminal activity”. “We will continue to work closely with Gold Corporation to address compliance concerns,” she said.
WA Mines Minister Bill Johnston identified the possibility of an Austrac audit when giving evidence to a parliamentary committee in April, after the state’s Auditor General found “control deficiencies in a number of relevant state entities” in regard to money laundering laws.
Mr Johnston told the parliamentary committee that the Perth Mint had expected an Austrac audit in 2021, but had been told it had been delayed due to Covid-19 travel restrictions.
“It is a significant risk for the reputation of the government of Western Australia; therefore, it is a matter that is in discussion between me, on behalf of the government, the chair and the chief executive,” he said. “It is a matter that I have discussed with the Auditor General and I look forward to Austrac doing its review.”
Sources say the Auditor General’s concerns centred around outdated software systems used by the Perth Mint to manage customer transactions, and whether they complied with Austrac’s requirements.
While the audit period only refers to Gold Corporation’s compliance with money laundering rules since January 2021, Austrac’s intervention this year is not the first the company’s behaviour has been questioned. In 2020, transactions involving the purchase of gold from subsistence miners in Papua New Guinea, through allegedly dubious intermediaries, were investigated by both the state government and the London Bullion Market. The Perth Mint says those investigations found no wrongdoing by any of its staff, but the group has since ceased halted buying gold from similar sources.
WA Liberal treasury spokesman Steve Thomas said the concerns about Gold Corp‘s anti-money laundering compliance came just months after a royal commission found inadequate practices at Perth’s Crown casino.
“You would hope that the anti-money laundering and counter-terrorism rules being enforced at Gold Corporation were far better than they were at Crown Casino Perth,” Dr Thomas said.
“It points to an overall potential lack of compliance under the government at the moment. They‘ve taken their eye off the ball on compliance, their argument would be because they’ve been so busy with Covid, but really that’s no excuse.”
