Accountants, lawyers, real estate agents and jewellers will be among the many business groups affected by reporting and compliance obligations under planned anti-money laundering laws.
Accountants, lawyers, real estate agents and jewellers will be among the many business groups affected by reporting and compliance obligations under planned anti-money laundering laws.
The Federal Government is intending to bring Australia into line with new international standards that place the onus on businesses to verify the people they are dealing with and monitor the financial activities of their customers.
The new rules, foreshadowed by Justice Minister Chris Ellison last week, are designed to counter both money laundering and terrorist financing.
They will be introduced in two phases, with the first phase covering the finance and gaming sectors and bullion dealers, which are already subject to strict reporting of cash transactions.
The first phase will also cover lawyers and accountants in cases where they provide financial services.
The second phase will extend the obligations to real estate agents, jewellers and professionals such as accountants and lawyers when they provide non-financial services.
Businesses covered by the new rules will be required to verify the identity of customers and ensure they are not dealing with a suspected terrorist or a person who appears on a prescribed list.
They must also report suspicious matters and high value transactions, maintain rigorous internal programs and keep appropriate records.
Deloitte anti-money laundering expert Tim Phillipps said there has been a great deal of concern from businesses about the cost of complying with the proposed legislation.
He said the latest government decision would come as a surprise to many lawyers and accountants who thought they wouldn’t be affected by the first phase of the legislation.
“There are a lot of legal and accounting firms who have had AML compliance on the back-burner,” Mr Phillipps said.
KPMG forensic partner Gary Gill said the planned changes raised a range of difficult legal, operational and customer relationship issues.
“I think it’s going to be very difficult,” he said.
Senator Ellison’s policy announcement preceded the release this week of a critical report by the Paris-based Financial Action Taskforce, which found Australia did not comply with international best practice standards.
Mr Gill said the report highlighted the failure of Australian businesses to deal properly with customer due diligence.
“People don’t know who they are dealing with or where their money is coming from,” he said.
Deloitte forensic partner Richard Thomas said the level of understanding of the proposed laws was very low.
He said Deloitte has developed an online service that enabled businesses to check customers against international databases.
Mr Gill said businesses needed to develop a strategy to deal with the whole issue of money laundering.
They should ensure they commit adequate resources to the issue, conduct training and awareness programs, introduce robust systems to monitor customers and transactions and establish appropriate compliance and internal audit functions.
