SYDNEY: Australia's anti-money laundering and counter-terrorism financing regulator and specialist financial intelligence unit, the Australian Transaction Reports and Analysis Centre (AUSTRAC), has accepted an enforceable undertaking from Barclays Bank PLC.

The undertaking was accepted as a legally enforceable commitment by Barclays following an on-site assessment in April 2009 of Barclays' compliance with local anti-money laundering and counter-terrorism financing (AML/CTF) laws. It was the second of two enforceable undertakings accepted by AUSTRAC CEO Neil Jensen within a week.

Under Australian law, banks are required to submit a range of transaction and suspicious reports to AUSTRAC. They must also have in place an AML/CTF program to prevent their services being used to facilitate laundering of the proceeds of crime or the financing of terrorism.

AUSTRAC's on-site assessment of Barclays disclosed a number of deficiencies and breaches, including reporting breaches, of AML/CTF laws. Within the terms of the enforceable undertaking, it has agreed to:

* Review transactions for a period of seven years and provide AUSTRAC any outstanding reports required by law;

* Develop and implement proper systems and controls to ensure that Barclays complies in the future with its reporting and AML/CTF obligations; and

* Submit to AUSTRAC an independent expert report detailing Barclays' compliance with the AML/CTF laws. It will also be required to submit similar reports in 2010 and 2011.

Under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act), the AUSTRAC CEO is empowered to accept enforceable undertakings as a means to ensure compliance with the AML/CTF Act, including as an alternative to taking criminal or civil enforcement action.

"AUSTRAC has a suite of enforcement powers available under the AML/CTF Act and will use these powers in a measured and appropriate manner to secure compliance with the Act," Jensen said. "Compliance with the AML/CTF Act plays a key role in protecting the integrity of the Australian financial system."

- Mark Phillips