Designated non-financial businesses and professions. The weak link in Australia’s AML/CTF regime
| Date | 03 July 2017 |
| Published date | 03 July 2017 |
| DOI | https://doi.org/10.1108/JMLC-08-2016-0038 |
| Pages | 247-261 |
| Author | Michael Newbury |
| Subject Matter | Accounting & Finance,Financial risk/company failure,Financial compliance/regulation,Financial crime |
Designated non-nancial
businesses and professions
The weak link in Australia’s
AML/CTF regime
Michael Newbury
Helensburgh, New South Wales, Australia
Abstract
Purpose –The purpose of this paper is to highlight vulnerabilities in Australia’s anti-money laundering/
counter-terrorism nancing (AML/CTF) regime through Australia’s non-compliance with the Financial
Action Task Force (FATF) recommendations on the regulation of designated non-nancial businesses and
professions (DNFBPs). It is intended that through examination of the justications for and against AML/CTF
regulation of DNFBPs, the paper will provide support for the position that Australia’s AML/CTF regime
should incorporate regulation of DNFBPs.
Design/methodology/approach –The paper presents ndings from research conducted in 2015 that
focused on some of the principal arguments for and against the extension of Australia’s AML/CTF regime to
DNFBPs. Review and consideration of the merits of these arguments is undertaken to support the conclusion
that AML/CTF regulation should be extended to DNFBPs, in line with the FATF recommendations.
Findings –The current exemption of many DNFBPs from AML/CTF regulation perpetuates vulnerabilities
within Australia’s AML/CTF regime; until this is addressed, criminals will continue to exploit these
vulnerabilities and the regulated AML/CTF sector will continue to shoulder an unfair burden of Australia’s
AML/CTF response.
Practical implications –This paper provides an objective assessment of factors for and against the
regulation of DNFBPs in Australia. It may be of value to government policymakers, regulators, nancial
institutions and DNFBPs.
Originality/value –This paper complements existing research on this subject and provides a specic
focus on some of the main arguments for and against the extension of Australia’s AML/CTF regime to specic
DNFBPs.
Keywords Money laundering, Terrorism nancing, Financial action task force,
Designated non-nancial businesses and professions
Paper type Conceptual paper
Background
Designated non-nancial businesses and professions (DNFBPs) such as accountants,
lawyers and real estate agents are largely exempt from regulation under Australia’s
anti-money laundering/counter-terrorism nancing (AML/CTF) regime. This is inconsistent
with the international AML/CTF standards developed and promoted by the Financial Action
Task Force (FATF) and is considered to be a signicant vulnerability in Australia’s efforts
to detect and prevent money laundering and terrorism nancing (ML/TF). However, AML/
CTF regulation is unpopular in Australia with many DNFBPs warning of the adverse impact
that any extension of Australia’s AML/CTF regime could have upon their professions.
In August 2014, the FATF in collaboration with the regional AML body, the Asia–Pacic
Group on Money Laundering (APG), undertook a mutual evaluation of the effectiveness of
and compliance with the FATF recommendations for Australia’s AML/CTF regime. In April
2015, the FATF released its fourth Mutual Evaluation Report of Australia (MER). Overall,
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1368-5201.htm
AML/CTF
regime
247
Journalof Money Laundering
Control
Vol.20 No. 3, 2017
pp.247-261
©Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-08-2016-0038
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