Australia ramps up efforts to tighten money-laundering laws midst a fresh scandal at the Commonwealth Bank of Australia

The Australian government seeks to empower its financial intelligence watchdog with investigative and enforcement powers.

Australia has proposed enabling stronger money laundering laws, including bringing bitcoin providers under the jurisdiction of the its financial intelligence unit, following yet another fresh scandal at one of its biggest banks.

The Australian has stated it would table a bill, as a first measure, that would set the stage for a reform of the country’s Anti-Money Laundering And Counter Terrorism Financing Act.

“The threat of serious financial crime is constantly evolving, as new technologies emerge and criminals seek to nefariously exploit them. These measures ensure there is nowhere for criminals to hide,” said Michael Keenan, Australia’s Minister of Justice, without specifying when the legislation would be introduced.

The bill will empower AUSTRAC, its financial intelligence agency with investigative and enforcement powers.

The development comes in the wake of AUSTRAC accusing the Commonwealth Bank of Australia of “serious and systemic” breaches of money laundering laws.

The move comes two years after the Financial Action Task Force (FATF), a global watchdog, found significant deficiencies in Australia’s anti-money laundering framework.

The more challenging phase of legislative reforms will be to extend the rules to accountants, lawyers, real estate agents and dealers in high-value goods.

Under Australian regulations, one can pay millions in cash for precious stones or a prime property without having to identify themselves or the source of their funds.

In 2003, Australia had agreed to extend strict controls to these sectors, but has yet to act on the promises.

“Stopping the movement of money to criminals and terrorists is a vital part of our national security defenses and we expect regulated businesses in Australia to comply with our comprehensive regime,” said Keenan.

He went on to add, that the digital currency exchange sector, including bitcoin, will be regulated in the country for the first time.

The move has been welcomed by the Australian Digital Currency & Commerce Association saying it will increase safeguards and provide regulatory certainty to digital currency businesses.

Although earlier this year Australia launched, a world-first private-public partnership called ‘Fintel Alliance’, which was designed to encourage banks and other financial institutions to provide intelligence to regulators.

Going by the allegations against CBA, these efforts have yet to produce any results since it failed to provide timely alerts in 53,000 transaction to AUSTRAC.

“Australia was seen as a place where there was a real cooperation between regulatory authorities, law enforcement and financial institutions,” said Kieran Beer, New York-based chief analyst at the Association of Certified Anti-Money Laundering Specialists. “This kind of cooperation is getting institutionalized and gathering momentum in the U.K. But there will be a backlash against the perceived failures, if proven, in the CBA case and some will argue that Fintel-like alliances may be an illusion.”


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