Australia: Working Within the Law — The Attitudes of Reporting Officers to the Financial Transaction Reports Act 1988
| Published date | 01 April 2000 |
| Date | 01 April 2000 |
| DOI | https://doi.org/10.1108/eb025980 |
| Pages | 162-170 |
| Author | Jackie Johnson |
| Subject Matter | Accounting & finance |
Australia: Working Within the Law —
The Attitudes of Reporting Officers to the
Financial Transaction Reports Act 1988
Jackie Johnson
Journal of Financial Crime — Vol. 8 No. 2 — International
— suspicious transactions of any size;
— cash transactions of AS10,000 or more (or the
foreign currency equivalent); and
— international funds transfer instructions.
Account signatories must be verified and it is pro-
hibited for accounts to be opened or operated in a
false name. The reporting and identification require-
ments arc backed by penalties ranging from two to
five
years'
jail and/or a range of fines. Organisations
only face fines, but at five times the level of indivi-
duals.
Penalties for non-compliance arc designed to
provide a strong deterrent to facilitators of money
laundering. To ensure that cash dealers and their
staff comply with the legislation, in respect of both
the reporting requirements and the account opening
procedures, the FTR Act provides for AUSTRAC
to inspect cash dealers' systems.
So,
at the strategic level there are international
organisations working on a number of initiatives to
combat money laundering. A number of govern-
ments support these initiatives and have set up indivi-
dual financial intelligence units, such as AUSTRAC,
to work within their country's legislation to combat
money laundering. The financial intelligence units
oversee the individual financial institutions or cash
dealers who deal with their customers/clients on a
day-to-day basis. This is the level at which those
wide-ranging strategic plans must be put into opera-
tional form. It is the cash dealers' staff who must be
vigilant and diligent in their application of the law,
in order for those anti-money-laundering measures
to work. If staff at this level arc careless, corrupt,
uninformed or untrained then the fight against
money laundering will be lost. It is therefore
important to know what these reporting officers
think about their anti-money-laundering legislation:
legislation they had no hand in setting, with which
they may not agree and about which they may
know nothing.
Very little empirical work has been done on
financial institution officers' attitudes towards this
INTRODUCTION
The laundering of money appears to have reached
almost epidemic proportions, due primarily to the
increase in profit from the sale of illegal drugs; the
growth of organised crime, particularly in Russia;
the sale of oil outside of OPEC quotas; and the
siphoning off of aid funds. The bulk of these funds
arc washed through the global financial system
before arriving at their final destination . . . a high-
street bank.
It was in response to the increase in laundered
money and its likely impact on the global financial
system that in 1989, at the G7 summit in Paris, the
Financial Action Task Force (FATF) was established
to examine measures to combat money laundering.
By April 1990, the FATF had issued a report detailing
40 recommendations designed to fight money
laundering. They encompass:
— the criminal justice system and law enforcement;
— the financial system and its regulation; and
— international cooperation.
The recommendations arc not binding, but each
member country makes a commitment to
combat money laundering and is expected to
implement these recommendations. Currently the
FATF has 26 member countries and two regional
organisations, and works closely with other inter-
national organisations in the battle against money
laundering.
Australia is a member country and its response to
the increase in money laundering was to formulate
the Financial Transaction Reports (FTR) Act 1988
and establish the Australian Transaction Reports
and Analysis Centre (AUSTRAC). The FTR Act
is an initiative designed to assist in the deterrence
and detection of laundered money originating from
tax evasion, the sale of illegal drugs and other
criminal activities. It places a number of obligations
on cash dealers, who must report to the director of
AUSTRAC:
Journal of Financial Crime
Vol.
8. No.
2,
2000, pp. 162-170
© Henry Stewart Publications
ISSN 0969-6458
Page 162
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