Australia to tighten anti money laundering laws: how it could impact you

Katherine O'Chee

Wednesday 26 February 2020

Australia is no stranger to money laundering scandals - from CommBank’s $700 million fine for breaking anti money laundering laws, to more recent allegations that Westpac has committed similar breaches a staggering 23 million times.

Australia to tighten anti money laundering laws: how it could impact you

While those cases have left many shaking their heads and tutting their lips at the big banks, they’ve also raised questions about the legal limits of sending money overseas. 

More specifically, what would make an international money transfer (IMT) criminal? And how can people making hefty cash payments ensure they don’t set off any false alarms or get reported?

Turning to the law itself provides some answers. Right now businesses that offer certain “high risk” services must report cash payments of AU$10,000 or more, while travellers entering or leaving Australia must also declare physical currency valued at AU$10,000 or more. 

But a controversial bill, introduced last year, looks to extend the cap to cash transactions between businesses and individuals. The bill aims to combat crimes like tax evasion and money laundering (or the ‘cleansing’ of illegal finances), and if passed through the Senate, will mean a ban on sending or receiving cash payments over AU$10,000.

This ban would target two groups of people: firstly, businesses underreporting their income by making anonymous and untraceable large cash transfers; and secondly, individuals using cash to make high-value purchases (e.g. jewellery, artwork, real estate).

RELATED: Buying an investment property overseas: how to send and receive payments

IMT specialist SendFX’s Hannah Churcher said the proposed law, “is a balancing act between two conflicting priorities - safeguarding the financial system and ensuring it remains easily accessible”. 

For one, it would still be legal for Aussie consumers and businesses to send AU$10,000 or more overseas - as long as they opt for cashless payment methods. 

“Rather than paying for personal and business goods and services using cash, make your payments electronically using reputable bank accounts," Churcher said.

"This ensures you’re leaving a financial footprint which ensures regulatory bodies know where your money is coming from and going."

How can I send money overseas without getting reported for suspicious financial activity? 

For high-stakes international money transfers involving tens of thousands of dollars, the last thing you would want is to accidentally set off the alarms, lock yourself out of your own account, or be slugged with a huge fine. So rather than crossing your fingers and hoping for the best, here are a few other steps to take to ensure your personal or business money transfer goes as smoothly and safely as possible: 

1. Choose a reputable IMT provider:

Look for a IMT provider that’s registered with AUSTRAC and has a strong Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) program in place. This is a good indication that your provider complies with regulations and fulfils their legal obligations, including monitoring and reporting their customers' financial transactions and any suspicious activity. 

“By monitoring your transactions, financial institutions and law enforcement agencies can identify any suspicious activity linked to your personal or business account to reduce the risk of exploitation for the purpose of money laundering or terrorism financing,” Churcher explained.

2. Have the right documents ready: 

For larger money transfers like moving your retirement fund overseas or expanding your business operations to another country, you may be asked by your bank or IMT specialist to provide certain information to verify your identity and the source of your funds. To ensure you can meet these requests, double check that you have all relevant documents handy, including ID, bank or income statements, receipts and invoices. 

3. Keep your personal or business details up to speed: 

If your bank or IMT provider detects a suspicious transaction under your name or, in more extreme cases, believes that identity theft has taken place, they may require you to prove your identity before giving your transaction the green light. Keeping your details up-to-date and accurate will save you a lot of trouble if you find yourself in that situation. 

  • For individuals, this may include your legal name and residential address.
  • For businesses, this may include the full name of your company, your Australian Registered Body Number (ARBN), and your Australian Securities and Investment Commissions (ASIC) licence number.

4. Avoid high-risk countries: 

AUSTRAC regards some countries as major money laundering threats, because they’re seen as a source or transit point for illegal goods. Get in touch with an IMT specialist if you need expert help with identifying and navigating those threats.

5. Manage risks: 

Since payments between businesses and individuals are often automated and take place regularly, there could be room for error in terms of letting a suspicious transaction slip through. That’s why, as a business, it’s a good idea to carry out regular assessments to identify and manage those risks, so you aren’t hit with any penalties for breaching anti-money laundering legislation. 

If you’re still concerned about the safety of sending money overseas, then check out our article on ways to make your IMTs more secure. Or if you’re ready to move funds abroad, then head over to our international money transfer comparison table.

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