Keenan tightens laws on money-laundering and terror financing

Justice Minister Michael Keenan will today introduce legislation to strengthen laws against money-laundering.

Justice Minister Michael Keenan. Picture: AAP

Justice Minister Michael Keenan will today introduce legislation to strengthen laws against money-laundering and terror financing while also slashing red tape costing Australia’s ­finance sector $36 million a year.

The shake-up represents the first tranche of reforms aimed at strengthening the Anti-Money Laundering and Counter-Terrorism Financing Act — known as the AML/CTF regime — since the Commonwealth Bank was ­accused of breaching it more than 53,000 times between November 2012 and September 2015.

Mr Keenan told The Australian yesterday that he expected “all regulated businesses” operating in Australia to “comply with our comprehensive regime”.

Under the overhaul, digital ­exchange currencies will be regulated for the first time while other low-risk industries such as cash-in-transit — the physical transfer of banknotes, coins and credit cards from one location to ­another, such as ATMs, large ­retailers and bank branches — will be deregulated.

As previously revealed by The Australian, the white-collar crime watchdog, the Australian Transactions and Reporting Analysis Centre (Austrac), will have its ­investigation and enforcement powers strengthened while police and Customs officials will be granted enhanced search and ­seizure powers.

The changes will mean the trade in cryptocurrencies such as Bitcoin will be subject to greater oversight while there will be more scrutiny placed on individuals ­suspected of money-laundering or ­financing terrorism when they leave or enter the country.

The reforms follow consultation with industry after the ­government tabled a statutory ­review of Australia’s anti-money-laundering arrangements in April last year.

The review concluded the money-laundering and terror-­financing risk associated with the domestic transportation of cash from one location to another by a contractor was almost negligible, with the cash-in-transit sector ­already subject to comprehensive state and territory licensing.

“These reforms appropriately balance the threat of organised crime and terrorism financing to the Australian community while ensuring excessive regulation doesn’t hinder our financial ­sectors,” Mr Keenan said. “The threat of serious financial crime is constantly evolving, as new technologies emerge and criminals seek to nefariously exploit them.

“These measures ensure there is nowhere for criminals to hide. Stopping the movement of money to criminals and terrorists is a vital part of our national security defences and we expect regulated ­business in Australia to comply with our comprehensive regime.”

The government crackdown follows the initiation of federal court proceedings against the CBA by Austrac, which earlier this month alleged the bank had failed to report suspicious matters ­“either on time or at all” involving transactions on deposit machines totalling over $77 million.

The watchdog said that, for a period of three years, the CBA did not comply with the AML/CTF regime relating to transactions on 778,370 accounts while also failing to provide notification of the 53,506 occasions when cash transactions of $10,000 or more were made via its deposit machines.

Since news of the scandal broke, CBA chief executive Ian Narev has announced he will ­retire by the end of the 2018 financial year.