Regulatory Developments in the MSB Industry: Country Experience

Regulatory Developments in the MSB Industry:
Country Experience
Hayley Gledhill
Senior Manager, Compliance, Remittance Sector
AUSTRAC
Regulatory developments in the MSB
industry: Australia’s experience
May 2014
Regulatory approach
• AUSTRAC’s regulatory objectives are
to monitor and improve compliance
with AML/CTF obligations and to
develop and maintain AUSTRAC's
knowledge of the regulated
population
3
Characteristics of the MSB sector
• In Australia, the MSB sector includes
remittance dealers, cash carriers and
foreign exchange dealers
• The sector is vulnerable to ML/TF activity,
though the likelihood of individual entities
being targeted for ML/TF is moderated
when sufficient programs and controls are
in place
4
Remittance services in Australia
• The remittance sector in Australia
comprises approximately 5,500 reporting
entities ranging from global money transfer
businesses and their agents, to smaller
community-based entities
• AUSTRAC has assessed the overall
money laundering threat from the
remittance sector as high
5
Remittance sector reforms
• In 2011, Australia’s AML/CTF Act was amended
to introduce an enhanced regulatory framework
for remittance dealers and providers of
remittance networks
• Remittance dealers are required to register with
AUSTRAC, keep registration details up to date
and reapply for registration every three years
• The AUSTRAC CEO may refuse, suspend,
cancel or impose conditions on registered
remitters – these decisions are reviewable
6
Remittance reforms
• Prior to these reforms:
– remittance providers were automatically
registered, without any assessment of
the applicant’s suitability
– limited enforcement options available to
AUSTRAC to ensure that remittance
providers complied with AML/CTF Act
obligations
7
Remittance Network Providers
• The reforms formally recognise a
remittance network comprising a
remittance network provider and its
affiliates. AUSTRAC’s primary
regulatory relationship is with the
network provider rather than the
individual affiliates
8
Penalties
• It is an offence to provide a remittance service whilst not
being registered:
– Criminal penalty of 2 years imprisonment or a fine of
500 penalty units (AUD 85,000) or both.
– Civil penalty of up to AUD 2.2 million for an individual
and AUD11 million in the case of a corporation.
• The AUSTRAC CEO may issue an infringement notice
where a person:
– provides remittance services whilst not being
registered; or
– fails to notify AUSTRAC of a change to its registration
information
9
Penalties
• In November 2013, AUSTRAC issued
an infringement notice for nearly a
quarter of a million dollars to one of
the world's top three remittance
network services for 26 breaches of
Australia's registration obligations
10
Registration decisions
• The AUSTRAC CEO must register a person if
appropriate to do so, having regard to:
– the ML/TF/PS risk related to registration
– previous offences with which the applicant (or person
related to the business) has been charged or
convicted
– compliance (or non-compliance) of the applicant with
AML/CTF obligations or any other law
– legal and beneficial ownership and control of the
applicant
– any other matter specified in the AML/CTF Rules
11
Reviewable decisions
• To date, AUSTRAC has:
– refused five applications for registration
– cancelled the registration of one
remittance dealer
– imposed conditions on 15 remittance
dealers
12
Taskforce Eligo
• AUSTRAC is a member of the Eligo
National Task Force, established to
address criminal vulnerabilities and the
potential for exploitation by serious and
organised crime within the remittance
sector
• The Task Force is working closely with
industry to professionalise the sector, to
make it harder for criminals to exploit
13
AUSTRAC website
http://www.austrac.gov.au
AUSTRAC Help Desk
[email protected]
1300 021 037
DISCLAIMER:
The information contained in this document is intended only to provide a summary and general overview on these matters.
It is not intended to be comprehensive. It does not constitute nor should it be treated as legal advice or opinion. This presentation
contains statements of policy which reflect AUSTRAC’s administration of the legislation in carrying out its statutory functions.
The Commonwealth accepts no liability for any loss suffered as a result of reliance on this publication, including any errors or
omissions therein. AUSTRAC recommends that independent professional advice be sought. The information contained herein
is current as at the date of this document.

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