AUSTRAC has released four new Australian banking sector money laundering and terrorism financing (ML/TF) risk assessments. The four assessments are
• Major banks risk assessment
• Other domestic banks risk assessment
• Foreign subsidiary banks risk assessment
• Foreign bank branches risk assessment
These assessments examine Australia’s four major banks, other domestic banks (12 operating in Australia), foreign subsidiary banks (seven operating in Australia) and foreign bank branches (48 operating in Australia).
The overall ML/TF rating for foreign subsidiary banks and foreign bank branches is medium, and high for major banks and other domestic banks operating in Australia.
The level of ML/TF risk in each subsector is largelyproportional to its size, the types of customers it services, its products and services, and its global reach.
Risk profiles are also impacted by the maturity ofindividual entities’ anti-money laundering/counter terrorism financing (AML/CTF) programs in place, which are implemented with varying degrees of effectiveness across the sector.
Most suspected ML/TF activity involves retail banking products and services, particularly those that facilitate cash transactions or rapid transfer of funds domestically or internationally.
These products and services are exploited at all stages of the money laundering cycle, and are exposed to terrorism financing activity and a range of predicate offences such as drug trafficking, fraud and tax evasion
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Author: David Jacobson
Principal, Bright Corporate Law
About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.