Title: Australia’s Anti-Money Laundering Measures: FATF Assessment Result Revealed

The Financial Action Task Force (FATF) has recently released its follow-up report on Australia’s Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) measures in 2024. Here’s how Australia fared in the assessment:

Rating Overview

Australia’s ratings, reflecting the extent of its implementation of the FATF Recommendations, are as follows:

• R.1 - Risk assessment and applying a risk-based approach (PC)
• R.2 - National cooperation and coordination (LC)
• R.3 - Money laundering legislative framework (C)
• R.4 - Confiscation and provisional measures (C)
• R.5 - Terrorist financing offence (C)
• R.6 - Targeted financial sanctions related to terrorism and terrorist financing (C)
• R.7 - Targeted financial sanctions related to proliferation (C)
• …
• R.13 - Correspondent banking (C)
• R.14 - Money or value transfer services (LC)
• R.15 - New technologies (PC)
• R.16 - Wire transfers (PC)
• …
• R.22 - DNFBPs: Customer due diligence (NC)
• R.23 - DNFBPs: Other measures (NC)
• …
• R.34 - Guidance and feedback (LC)
• R.35 - Sanctions (PC)
• R.36 - International instruments (C)
• …

Note: “PC” stands for “Partially Compliant,” “LC” for “Largely Compliant,” and “NC” for “Not Compliant.”

Key Findings

The FATF assessment found that Australia has made progress in implementing some of the AML and CFT measures, although in a partially or largely compliant manner. Several areas require improvement:

Risk assessment and applying a risk-based approach (PC)

• Although Australia has developed a risk assessment and risk-based approach, further improvements are needed.

DNFBPs: Customer due diligence (NC)

• In this area, Australia is considered non-compliant. Enhancing customer due diligence requirements for Designated Non-Financial Businesses and Professions (DNFBPs) is essential.

Correspondent banking (C)

• Australia is deemed compliant with regulations regarding correspondent banking.

Technology and innovation (PC/LC)

• Australia’s implementation of technology and innovation in the AML/CFT regime is partially compliant or largely compliant, depending on the specific recommendation.
• Challenges remain, such as the need for more efficient and effective use of technology to mitigate risks.

The FATF report highlights the importance of continued efforts to improve Australia’s AML/CFT framework and achieve full compliance in areas like customer due diligence for DNFBPs. Regular reviews and updates to regulatory frameworks and enhanced cooperation between law enforcement, financial institutions, and regulatory authorities are vital components of a robust AML/CFT regime.

• Improve risk assessment and apply a more effective risk-based approach, focusing on high-risk jurisdictions and sectors.
• Enhance customer due diligence measures for DNFBPs, particularly in relation to client identification, risk assessment, ongoing monitoring, and record keeping.
• Develop strategies for addressing deficiencies in technology and innovation to mitigate AML/CFT risks more effectively and efficiently.

Continuous efforts to strengthen AML/CFT measures are essential for maintaining a strong and effective response to evolving threats.