03 May 2021
AUSTRAC put banks, casinos and wagering companies on notice by providing detailed guidance of the information it expects to see every time a suspicious transaction is reported.
The financial intelligence regulator reminded reporting entities they are expected to spell out exactly what the grounds are for submitting a suspicious matter report (SMR), submit them within three days or less and inform law enforcement where required.
It also contains worked examples of reports featuring high-level money laundering, insider trading and suspected identity theft that received a pass or fail mark from the regulator.
The updated guidance is contained in three separate documents: a checklist, a reference guide and a third document containing crime types and keywords that entities have been instructed not to share.
Reporting entities have been told to include the reasons for the report “in plain English, with information structured in a clear and logical way”. It wants reports of the events in chronological order and has instructed entities to avoid acronyms and jargon.
“SMRs that contain incomplete, incorrect and disorganised explanations can make further analysis difficult, if not impossible,” AUSTRAC said.
Companies that provide financial services, bullion trading and gambling are required to submit suspicious matter reports to the anti-money laundering and counter-terrorism financing compliance regulator within three days.
Each suspicious matter report contains about 50 questions and hundreds of fields. Around 265,000 SMRs were submitted to AUSTRAC last year.
The number of SMRs reported to AUSTRAC has soared in the wake of the regulator’s high profile actions against the Commonwealth Bank and Westpac – in 2017 and 2019 respectively – rising 258 per cent over five years.
Both banks opted to settle the allegations of systemic breaches of the anti-money laundering and counter-terrorism financing act at a combined cost of more than $2 billion.
The explosion in the number of SMRs filed has raised concerns that some reports are not being submitted in good faith with AUSTRAC saying earlier this year the quality of SMRs varies from “gold plated” to “defensive”.
AUSTRAC provides examples of good and bad reporting in its reference guide while the third document is understood to contain sanitised case studies and keywords in a for-your-eyes-only style document supplied to reporting entities.
Reporting entities are reminded that in some cases waiting three days to lodge an SMR or report suspicion of a crime is too long. When an institution suspects a matter is related to terrorism financing it must be reported within 24 hours and in some circumstances, even sooner.
“If the suspicious activity relates to a person or child being in immediate risk of harm, including sexual exploitation or abuse, modern slavery and human trafficking, contact the police immediately on triple zero,” AUSTRAC said.
By James Frost, The Australian Financial Review, 3 May 2021
Read more at The Australian Financial Review
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