In this Post, I will explain what AUSTRAC is and why it is important in the Australian financial system. Likewise, the AUSTRAC or Australian Transaction Reports and Analysis Centre is a key authority
In the fight of money laundering and terrorist stimulus. Knowing its function is crucial in understanding its influence on the financial compliance regulations.
What Is AUSTRAC?
AUSTRAC, Australia’s financial intelligence unit was established in 1989 and is one of Australia’s operating arms for combating financial crime.
It was set up under the Anti-Money Laundering and Counter- Terrorism Financing Act 2006 and the Financial Transaction Reports Act 1988 as a risk based approach for the financial institutions and other high risk service providers.
It must be noted that unlike some FIUs which only gather intelligence information provided from the public or the regulated sectors on suspicious activities, AUSTRAC is a regulatory and an intelligence agency with powers to investigate financial crimes.
What Does AUSTRAC Do?
Including ways to facilitate the integration of all compliance functions in such jurisdictions is a very important component of the action.
As all reporting of suspicious activity is now performed by AUSTRAC, a quick summary of the report is given, and cryptographic security measures are being enhanced.
Since its inception, AUSTRAC has encompassed more than just currency regulation. Therefore, AUSTRAC monitors the activities of the trust companies as well, providing with all the necessary compliance support, education and guidance.
Here’s a Detailed Explanation of its Roles and Functions
Roles and Functions
Regulation and Compliance:
- Regulator: AUSTRAC supervises more than 17,000 services which include banks, gambling companies, bullion dealers, money remitter, and virtual currency exchange1. It is expected of these businesses to put in place systems and procedures which would assist in risk management and in aversion of crime.
- Compliance: The determination of whether the obliged subjects follow the basic document on the determination of their regulation for AML/CTF1. This includes having proper systems to prevent and detect money laundering and terrorist financing1.
Financial Intelligence:
- Collection and Analysis: On the collection side, AUSTRAC obtains and provides intelligence and analytical products from financial transaction reports and other intelligence within the scope of requests1. This intelligence is utilized to assist with investigations pertaining to law enforcement and national security.
- Collaboration: Partnerships with industry, government and law enforcement agencies to deliver intelligence aimed at preventing money laundering, terrorism and other serious crimes1.
Disruption of Financial Crimes:
- Targeting Criminal Networks: Employs financial intelligence to target and dismantle criminal networks involved in drug human trafficking, laundering, fraud, tax evasion as well as other corrupt activities1.
- National Security: Work with national security partners to detect and prevent certain threats to national security
Vision and Purpose
The Australian Transactions Reports and Analysis Centre (AUSTRAC) aims to strengthen the financial system and, by employing financial intelligence and regulation, combat the offences of money laundering, terrorism financing and other serious offences.
The agency’s objective is to prevent the global threat of serious and organised crime by safeguarding the integrity of the financial system from abuse by criminal elements.
Adaptation To Emerging Threats
As criminals come up with advanced ways to take advantage of weaknesses in the financial system, AUSTRAC constantly changes and works with the industry to combat these threats1. This entails building a specialized team and applying new technologies to improve its effectiveness1.
Conclusion
AUSTRAC is equally important in regulating businesses and conducting intelligence activities as well as working with partners on financial
Crimes in order to ensure the propriety of the Australian financial system. Their activities help to shield the society against money laundering and related terrorism financing and other crimes.
