Australia’s anti-money laundering regime fails to meet international
standards according to an independent report. Global best practice for
AML is based on standards issued by the
Financial Action Task Force on Money Laundering and comprises 40
recommendations on money laundering and nine special recommendations on
terrorist financing.

A review by a FATF team has found that Australia’s AML system is not
effective and the federal government itself estimates that between $2
billion and $3 billion is laundered through Australia each year.

Despite yesterday’s spin from the federal government and the Australian
Bankers’ Association, the report is highly embarrassing to a country
that is a founder member of FATF. Of the four countries so far reviewed by FATF, Australia is the least
compliant, being fully or partly compliant with only 21 of the 40 AML
recommendations. Norway and Switzerland are compliant or largely
compliant with 28 of the recommendations, while Belgium is with 34.

Australia is completely non-compliant with nine of the recommendations,
far behind Norway and Switzerland with only 2 and Belgium with none.

The picture is a little better on terrorist financing with Australia
largely complaint with five of the nine recommendations and partially
compliant with the other four.

Australia’s compliance with world’s best practice still appears to be years, rather than months, away.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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