Superannuation, stored value travel cards and cryptocurrencies are increasingly being used for money laundering by sophisticated criminals, Australia’s financial intelligence agency has warned.
Brad Brown, deputy chief executive of the Australian Transactions Reports and Analysis Centre (AUSTRAC), said money launderers and criminal groups financing terror were exploiting new technology to move illicit money around the world.
Mr Brown told the ABC’s AM program that financial services were vulnerable, with both retail and industry superannuation funds potential targets of money launderers constantly seeking loopholes to exploit.
“In Australia’s superannuation sector we found there is a medium risk of money being laundered,” Mr Brown said.
“There are different risks across every finance services sector that AUSTRAC regulates.
Certainly where there is a greater amount of money flowing through a particular industry you are exposed to a greater number of risks.
The increasing global focus on money laundering and terror financing comes as AUSTRAC hosts a summit of The Egmont Group, a multinational group comprising 350 financial intelligence experts from 150 financial intelligence units meeting in Sydney.
“There’s an enormous amount of money flowing around the world. We often call it the super highway of transactions,” Mr Brown said.
“There’s the whole complexity and sophistication of technology and the amount of data we receive and process.”
The increasing popularity of stored value cards used by travellers represents another growing threat, according to AUSTRAC.
“In relation to stored value travel cards we have done a risk assessment and it is a medium risk for money laundering and terrorism financing,” Mr Brown said.
The rise of cryptocurrencies is another key risk for financial intelligence and, earlier this year, AUSTRAC was given regulatory oversight to monitor suspicious transactions by cyber criminals using the “dark web”.
“The most significant unlawful uses are purchases of illicit products through dark nets and the dark web and to purchase more abhorrent products such as child pornography,” Mr Brown said.
Criminals will look for every loophole
AUSTRAC’s concerns about financial services products, such as superannuation, comes as the banking royal commission approaches a major milestone, with commissioner Kenneth Hayne scheduled to deliver his interim report to the Government by September 30.
But Mr Brown was reluctant to comment on shocking revelations about misbehaviour in the financial services industry where shareholder interests had come ahead of consumers.
“I think there will be multiple lessons learned for industry in relation to what arises from the banking royal commission,” Mr Brown said.
“But in terms of AUSTRAC and other regulators, I think we’ll wait until those recommendations are made.”
The Commonwealth Bank’s almost 54,000 breaches of anti-money laundering laws was a key prosecution for AUSTRAC in 2017 and saw the bank fined $700 million earlier this year.
CBA’s money laundering scandal accelerated the scheduled retirement of chief executive Ian Narev and was a key factor forcing the banking royal commission.
The Egmont Group summit will also discuss the case of Denmark’s Danske Bank, which has been implicated in laundering $US322 billion ($442 billion) after suspicious transactions were uncovered in its Estonian operations.
Mr Brown conceded it was getting tougher to keep up with sophisticated criminals laundering money and financing terror.
“Criminals being what they are will look for every loophole and every gap that is possibly out there,” Mr Brown said.
Mr Brown said white collar criminals were “absolutely” involved in money laundering, and the complexity of business structures meant financial intelligence agencies were racing to monitor seemingly legitimate transactions that move money around the world.
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