Michael Keenan to move on money launder laws

The Australian 12:00am August 8, 2017

Joe Kelly

The government will introduce legislation within weeks to ­strengthen laws against money laundering and terror financing after the Commonwealth Bank was accused of breaching existing rules more than 53,000 times in three years.

The overhaul follows a long consultation period with industry. The government tabled a statutory review of Australia’s anti-money laundering arrangements in April last year, containing 84 recommendations.

Government sources confirmed last night that Justice Minister Michael Keenan was aiming to introduce the first tranche of recommendations from the ­review as soon as next week, as Liberal MPs yesterday accused the CBA of appearing to “operate above the law”.

The Australian can reveal the government’s legislation will look at closing regulatory gaps in order to capture digital currencies such as Bitcoin, and strengthen the ­reporting regime for cash and travellers cheques at the border.

Police and Customs officials will also be given expanded search and seizure powers if they suspect individuals leaving or ­entering the country are engaged in money-laundering or terrorism financing.

The Australian Transaction Reports and Analysis Centre will also be beefed up as the nation’s key financial intelligence unit in an attempt to ensure Australia keeps pace with international criminal trends.

It is Austrac, not the Australian Prudential Regulation Authority, which is charged with administering the Anti-Money Laundering and Counter-Terrorism Financing Act, which is known as the AML/CTF regime. An APRA spokesman refused to say whether it was informed by Austrac of the Commonwealth Bank investigation.

A spokesman for the ­Attorney-General’s Department last night confirmed the first phase of the shake-up to the AML/CTF regime would be introduced as a matter of urgency with further reforms to follow. “Imminently, the government will be introducing to parliament the first phase of legislation to implement part of the recommendations,” the spokesman said.

Last year’s statutory review proposed a series of measures to reduce the complexity of the AML/CTF regime, as well as greater assistance to industry to help it understand the obligations under the act.

The review also examined ways to strengthen the framework for combating terrorism financing, with Liberal MP Craig Kelly yesterday saying the allegations against the CBA were “very serious”.

“The anti-money laundering procedures we have and the regulation we have in place, they are there for a specific reason and it appears that the Commonwealth Bank have sort of just thought they could operate above the law,” Mr Kelly told ABC radio.

“The Commonwealth Bank has appeared to have acted ­illegally, they have been caught through the existing system, they will have to answer for what they have done and they face a very significant and heavy fine.”

In its update to the ASX, the CBA yesterday blamed a software glitch for creating a coding error that resulted in a failure to provide Austrac with notification of the 53,506 occasions when cash transactions of more than $10,000 were made via its deposit machines.

Austrac last week launched civil proceedings in the Federal Court against CBA for “serious and systemic noncompliance”.

The bank yesterday responded that the software error was rectified within a month of its discovery in 2015 and that Austrac was promptly provided with the missing transaction notifications — known as threshold transaction reports or TTRs — for the period between November 2012 and September 2015.

It also suggested the CBA might be held liable for only one contravention of the AML/CTF regime arising as a result of the software glitch instead of the more than 53,000 it is currently facing.