Australian Institute of Criminology

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Anti-money laundering and counter-terrorism financing

Description and progress

The AICs four-year research program into money laundering and financing of terrorism, which had entailed surveys, consultations and analysis of prior global research, is nearing completion with a series of publications being prepared for release.

This program examines a number of aspects of money laundering and financing of terrorism as they affect Australia. The main objectives of the research are to:

  • provide ongoing monitoring of vulnerabilities and emerging issues in money laundering and financing of terrorism
  • assess the nature and extent of displacement or alternative money laundering practices and activities, as an impact of new anti-money laundering and counter-terrorism financing (AML/CFT) laws
  • assess the effectiveness of the AML/CFT regulatory environment in Australia, within the international context
  • assess the contribution of AML/CFT laws on key areas of broader criminal justice activity, including investigations, prosecutions and proceeds of crime.

Forthcoming publications include reports on the money laundering and financing of terrorism risks in the professional sectors including the legal sector, the non-profit sector and risks relating to misuse of trade transactions to conceal the proceeds of crime. Large-scale survey research involving legal practitioners, as well as all businesses currently regulated by AUSTRAC, will also be finalised. The AICs Anti-Money Laundering Monitoring Report that covers the preceding four years will also be released, as will the AICs Global Comparative Report that examines the AML/CTF regime in a range of selected countries. Finally, two targeted reports examining the sentencing of money laundering offenders in Australia and a cost-benefit evaluation of the Australian AML/CTF regime will also be finalised. Coupled with already-published research into alternative remittance transactions, currency smuggling, illegal logging, financing of terrorism, risks associated with politically-exposed persons and stored value cards, this represents a large output of research into an important area of financial crime that affects Australia.

For a full list of publications click on the Publications link in the Section articles box on the right.

For further information contact: Russell.Smith@aic.gov.au

Components

Monitoring program

Environmental scan

This program will review current information on the risks of money laundering and financing of terrorism as they affect Australia. It will assess the criminal, political, regulatory and business environments that influence money laundering and financing of terrorism, how these are likely to change, and how risks could be minimised through regulatory controls. Also, it will use public source information on current trends regarding crimes that create funds for money laundering and financing of terrorism, political and regulatory changes that contribute to money laundering and terrorism, and business developments that contribute to the creation of funds that will be laundered or used to finance terrorism. The research will be supplemented by information provided by AUSTRAC.

Statistical review

This is a statistical review and assessment of enforcement action taken regarding money laundering and financing of terrorism by law enforcement agencies in Australia, including the Australian Federal Police, Australian Crime Commission, state and territory police services, and anti-corruption agencies. This will be supplemented by a review of case studies and judicial outcomes of regulatory activity undertaken in Australia.

Money laundering survey

A national survey is being undertaken of samples of businesses from each currently regulated sector in Australia to determine their levels of knowledge of AML/CTF laws, their attitudes to regulation, the burden of compliance, and the profile of compliant and non-compliant businesses. Results will be compared with information gathered from previous AML surveys globally.

Alternative remittance project

This project aims to assess the use of alternative remittance systems in Australia, and the extent to which they are being used for illegal money laundering and financing of terrorism. It will show whether such systems are being used to avoid the regulatory controls implemented pursuant to Financial Action Task Force recommendations VI and VII, namely the licensing of alternative remittance agents. The project will identify ways in which compliance with licensing can be enhanced and how the use of such systems for illegal activities can be minimised.

Comparative research project

This project aims to provide a comparative assessment of the AML/CTF regulation in Australia, the United States, United Kingdom, selected European Union countries and selected Asian countries. It will review the current systems in these jurisdictions as to how they prescribe requirements for designated entities to comply with transaction reporting, and also provide a comparative profile of the range of entities regulated in each jurisdiction to locate and explain similarities and differences, and how any anomalies could be exploited by criminals. The research will describe best practice established from the jurisdictions on how to regulate designated entities and how to maximise compliance.

Bulk cash smuggling project

This project aims to review existing information on the use of bulk cash smuggling globally, and the responses being developed by customs agencies and other regulators to deal with it. In addition to identifying the scale and importance of the problem, suggestions will be made to develop new controls and a research agenda proposed to quantify the size of the problem more systematically than is currently possible.

For further information contact: Russell.Smith@aic.gov.au

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