AS FINANCIAL institutions and others continue their anti-money laundering implementation plans, their new regulator is embarking on a major build-up of its own.
While banks begin implementing their AML programs, the reform focus is shifting to the legal profession, with law firms set to be included under the second phase of AML legislation. Consultations on phase two are currently underway, according to the Minister for Justice and Customs, David Johnston.
Austrac (the Australian Transaction and Reports and Analysis Centre) — which has been charged with regulating the reformed anti-money laundering/counter terrorism financing (AML/CTF) framework — is undergoing a mini-revolution as it transforms from a highly regarded financial intelligence unit with 60 staff, to a major regulator with more than 300 employees.
While it received a significant increase in its annual funding from the Federal Government for 2006—07, there is a major shortage of skilled AML professionals in Australia and Austrac is competing for the same resources as the banks and other firms it will regulate.
However, Austrac CEO Neil Jensen told Lawyers Weekly the recruitment drive is progressing well and there are extra staff in the pipeline. “We’re meeting the recruitment challenge,” he said. “We have been and continue to be successful in recruiting highly qualified staff in a very competitive market. We are continuing our extensive recruitment exercise at all levels of the agency in order to be adequately resourced to administer the new AML/CTF program. This will increase staff again by at least another 60 positions by the end of 2007.”
Jensen admitted earlier this year that Austrac faced a significant challenge to adapt.
“Internally we’ve got to develop some new skills to fit with our new role. We’ve doubled our staff in recent years and recently doubled it again,” Jensen said. “So we’ve gone from approximately 60 staff in 2000 and will be up to nearly 300 by the middle of next year. Early last year we put in place a change management program which has been very successful in the organisation, and we’ve developed staff as well as adding new staff to organisation. But upgrading skills and developing new skills for the new regulatory role is a major challenge.”
Indeed, Jensen said last month that there are currently 300 Austrac staff including contractors.
AML experts said that the role and performance of Austrac will be critical to the success of the new framework, which brings Australia into line with international standards on money laundering and counter terrorist financing.
“The effectiveness of Australia’s AML regime will be determined by how effective Austrac is as an AML regulator,” said Chris Cass, AML partner at Deloitte. “If I told you there were no police cars on the road, what speed would you drive home? It’s a thing called ‘perception of detection’, and if society doesn’t have a perception of detection, then why wouldn’t we all sort of act in an anarchist manner?”9
Austrac will also be holding a series of implementation forums for industries affected by the new anti-money laundering laws.
The forums, which will take place twice a year, aim to avoid excessive compliance costs and develop strategies to minimise compliance risks and involve the financial and gaming industries. “Austrac is committed to working with industry to assist them to understand their obligations to identify, manage and lessen any money laundering and terrorism financing risks within their business,” said Jensen, who chairs the new forums.
Austrac will also release a regulatory guide and legal interpretive series later this year.
For more information see www.riskmanagementmagazine.com.au.