AUSTRAC Regulatory Priorities 2024

On 18 December 2023, Australian Transaction Reports and Analysis Centre (AUSTRAC) released its regulatory priorities for 2024 (copy here), which identifies that AUSTRAC’s key regulatory focus areas (referred to as ‘enduring priorities’) are:

1. the design and effectiveness of money laundering and terrorism financing (ML/TF) risk assessments to understand, mitigate and manage ML/TF risk (being the cornerstone of the anti-money laundering and counter-terrorism financing (AML/CTF) framework);
2. the effectiveness of reporting entities’ AML/CTF programs;
3. accurate, timely and high quality reporting of international funds transfer instructions, threshold transaction reports and suspicious matter reports; and
4. the banking, gambling and remittance sectors as particularly high-risk sectors (given these sectors are exposed to significant and varied criminal threats and have widespread vulnerabilities due to their customer base, the products and services they provide, the significant use of cash and the scale of their operations).

Recently appointed AUSTRAC CEO, Brendan Thomas, has more recently confirmed the focus upon the gaming industry stating that AUSTRAC is having a look at the clubs sector in a “much more focused way”.^​1

In addition to the ‘enduring priorities’, AUSTRAC has identified that in 2024 it will increase its regulatory activities in the following sectors:

1. Digital currency exchanges;
2. Payment platforms;
3. Bullion; and
4. Non-bank lenders and financiers.

AUSTRAC has also identified, based on its supervision and enforcement activities in recent years, serious and systemic AML/CTF compliance failures in the following areas which it says will continue to be a focus of its regulatory work in 2024:

1. Board and executive accountability for maintaining a culture of AML/CTF compliance and risk management;
2. Effective transaction monitoring programs to identify unusual or suspicious customer transactions with adequate coverage across all designated services and delivery channels and appropriate controls and assurance; and
3. To the extent reporting entities outsource functions to third parties, that they put in place appropriate ongoing governance arrangements, systems, and controls and conduct independent reviews to ensure compliance with AML/CTF obligations.

Mr Thomas also noted in public comments that AUSTRAC would increasingly use penalty notices, particularly as it targeted smaller regulated entities and said that he also wanted to pursue cases to trial, stating that he was “interested… in getting some case law settled and letting courts make some full decisions on some of these matters”.^​2

This article was written by Polat Siva, Partner, and Neil Perl, Special Counsel.

^​1 AUSTRAC targets clubs’ pokies in $70b money laundering crackdown https://www.afr.com/politics/federal/austrac-targets-clubs-pokies-in-70b-money-laundering-crackdown-20240401-p5fggv

^​2 Ibid.