Glossary

Australian Transaction Reports and Analysis Centre

AUSTRAC is an Australian government agency that collects and analyses financial intelligence. It provides information to law enforcement, national security, and regulatory agencies to help them combat serious crime and terrorism. It does all of this with the goal of ridding the financial system of bad actors abusing it for personal gain.

AUSTRAC principles and operations build on the fact that profit plays a strong role in crime. It believes that all criminal activities come back to financial gain, no matter how complex or trivial the operations. Consequently, it follows the money and works with law enforcement to prosecute bad actors accordingly.

What Is the History of the Australian Transaction Reports and Analysis Centre?

The Australian government established AUSTRAC in 1989. Since then, its role has expanded to include combating money laundering, terrorism financing, and other serious crimes. The Financial Transactions Reports Act of 1988 governs AUSTRAC and the CEO reports to the Minister for Justice.

Who Does the Australian Transaction Reports and Analysis Centre Govern?

AUSTRAC regulates the financial sector and ensures compliance with anti-money laundering and counter-terrorism financing, also known as AML/CTF laws. It covers a wide range of financial entities:

  • Banks
  • Credit unions
  • Building societies
  • Casinos
  • Money services businesses
  • Bullion dealers
  • Remittance service providers
  • e-currency exchange providers

This can make it seem like only commercial entities answer to AUSTRAC, but this is far from the truth. Consider the sex offense case that AUSTRAC reported on in June 2022. AUSTRAC aimed to prevent the purchase and importation of a particular type of item and worked with the NSW Police Force to successfully prosecute someone possessing one of the objects.

This indicates that even civilians need to give some thought to AUSTRAC’s operations and the role it plays in enforcing laws. As AUSTRAC has noted, most crimes involve the act of money changing hands. Consequently, illegal commerce or transactions falls under AUSTRAC’s jurisdiction.

What Are the General Compliance Guidelines for AUSTRAC?

The Australian Transaction Reports and Analysis Centre focuses more heavily on criminal activities than other financial regulatory bodies. Despite its wider breadth, it does also have reporting and compliance guidelines. Consider the following main elements:

  • Record-Keeping: AUSTRAC-regulated entities must keep certain records for several years. The applicable retention period varies based on the services the business provides. Data you should store include customer identification information, transaction records, and suspicious matter reports.
  • Reporting: AUSTRAC has a long list of reporting requirements. These include reports for transactions of $10,000 or more, cross-border movement reports, and suspicious matter reports.
  • Customer Identification and Verification: AUSTRAC requires regulated businesses to take reasonable steps to confirm the identity of their customers before providing services. Consequently, it has regulations covering the verification process, high-risk countries and groups, third-party data access, and politically exposed persons.

How Does AUSTRAC Partner With Other Entities in the Industry?

National security requires teamwork. Consequently, AUSTRAC liaises with several other agencies to meet its goals. It identifies these three main components of its plan for working with partners in the industry.

Regulating the Industry

More than 15,000 businesses answer to AUSTRAC’s regulations and turn to it for protection from criminal abuse of their financial systems. The entity also ensures these regulated businesses comply with the law.

Financial Intelligence

AUSTRAC obtains valuable information from entities it regulates. In turn, it shares this information with law enforcement and national security agencies to help them investigate and prosecute serious crimes. The Australian government considers AUSTRAC an instrumental element in its anti-terrorism machinery. In fact, the number of terrorism financing cases reviewed by AUSTRAC has grown exponentially over the years.

Fintel Alliance

This is an alliance of government, law enforcement, and private sector entities that work together to share financial intelligence and disrupt serious crime. AUSTRAC established the Fintel Alliance in 2017. At its inception, it represented the first attempt in the world to combine public and private resources to fight crime and preserve national security.

What Kind of Enforcement Action Can AUSTRAC Take?

When AUSTRAC identifies non-compliance with its regulations, it can take civil or criminal enforcement action against the offending business or individual. This includes imposing administrative sanctions and issuing infringement notices. More severe cases may result in prosecution and a conviction in court.

When considering what actions AUSTRAC can take, it’s essential to consider the breadth of its reach and the power of its allies. For example, AUSTRAC itself might not cancel passports. However, its findings related to terrorism-related transactions can lead to passport cancellations and other serious sanctions.

How Can LeapXpert Help With AUSTRAC Compliance?

We provide archiving solutions for your business, so you can facilitate compliant conversations across the platforms your customers prefer. You can also record these conversations and store them in accordance with AUSTRAC guidelines. We aim to streamline the process so that you can focus on business operations while we focus on retention. To accomplish this goal, we have automated almost every step.

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