THE FEDERAL Government will release its exposure draft on anti-money laundering reforms for consultation in November.
Minister for Justice and Customs, Senator Chris Ellison, announced the phased roll-out earlier this month.
The initial phase will target the financial and gambling sectors and bullion dealers. Lawyers and accountants will be impacted, but only if they provide services in direct competition with the financial sector.
The second phase will touch real estate agents, jewellers and accountants and lawyers providing non-financial services. Consultation will run for four months and certain sectors are very concerned.
The Law Council of Australia’s (LCA’s) president John North told Risk Management magazine recently that the LCA would be prepared to test the reforms on a constitutional law basis should they, as expected, erode professional privilege.
Ellison claimed that the reforms will build on the Federal Government’s recent controversial anti-terror laws. While Ellison and his officials have been keen to play down the significance of missing the deadline for October’s plenary meeting of the Financial Action Task Force (FATF), which assessed Australia’s response to money laundering, he was keen to emphasise the significance of the exposure draft.
“The proposed reforms will strengthen Australia’s AML/CTF [counter terrorism financing] system in line with international standards and show that Australia is committed to maintaining a strong and effective system to fight serious and transnational crime.”
Ellison cited the 7 July terrorist attacks in London as justification for the new laws, which are expected to consume at least 25 per cent of financial services compliance spend next year. With overall compliance costs topping $100 million, according to KPMG, many banks are expected to spend at least $25 million on AML compliance.
However, the UK is some way ahead of Australia in implementing AML reforms. While the UK’s reforms have been strongly criticised, they did nothing to prevent or disrupt financing of the 7 July attacks.
Stuart Fagg is the Editor of Lawyers Weekly’ssister publication, Risk Management.