2010-06-30, English, Article, Journal or magazine article edition: Section 3: Contribution to international AML/CTF efforts (30 June 2010) Australian Transaction Reports and Analysis Centre.

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Section 3: Contribution to international AML/CTF efforts (30 June 2010)
 
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  • aca, Australian Govt. Pub. Service, 2010-06-30
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Title
  • Section 3: Contribution to international AML/​CTF efforts (30 June 2010)
Appears In
  • Annual report, no.234 of 2010, 2010-06-30, p.70 (ISSN: 1321-1366)
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  • Australian Transaction Reports and Analysis Centre.
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  • aca, Australian Govt. Pub. Service, 2010-06-30
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  • Annual report
  • 2009/​2010, PP no. 234 of 2010
  • Parliamentary paper (Australia. Parliament)
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  • Section 3: Contribution to international AML/​CTF efforts AUSTRAC ANNUAL REPORT 2009-10 A PROGRAM 1.2 Progress of AUSTRAC's priorities for 2009-10 AUSTRAC's 2008-09 annual report listed several priorities for AUSTRAC's contribution to international AM1VCTF efforts.These priorities are listed below, with a brief summary of AUSTRAC's progress in 2009-10: ■ developing and delivering new technical assistance programs to South Asia and Africa while maintaining programs in South-East Asia, Pakistan and the Pacific AUSTRAC commenced two new technical assistance programs in 2009-10 to build the AML/​CTF capabilities of FlUs in Africa and South Asia. AUSTRAC continued to provide technical assistance and training to the Indonesian FIU, Pusat Pelaporan dan Analisis transaksi Keuangan (PPATK), and also provided assistance to several Pacific nations under an AusAID-funded program. In addition, AUSTRAC continued to deliver assistance and training to the Pakistan FIU and financial regulators. In June 2010 AUSTRAC concluded its six-year technical assistance and training program to develop the AML/​CTF capacity of 10 regional FlUs under the SEACT Program. ■ continuing to expand AUSTRAC's global network of information exchange through negotiation of new exchange instruments In 2009-10 AUSTRAC entered into three new exchange instruments with overseas FlUs, and was also involved in ongoing negotiations to enter into additional exchange instruments with FlUs in Europe, the Middle East and the Pacific. ■ supporting the Egmont Oceania Regional Representative role assumed by AUSTRAC in May 2009 In 2009-10 AUSTRAC's Executive General Manager Supervision continued to represent AUSTRAC on the Egmont Committee, in the role of Oceania Regional Representative. AUSTRAC also commenced co-sponsorship activities for the FlUs of Papua New Guinea and the Solomon Islands to secure their entry into the Egmont Group, and will continue to progress their applications in 2010-11. ■ training AUSTRAC staff in the FATF mutual evaluation methodology One AUSTRAC officer attended the APG AssessorTraining on the FATF mutual evaluation methodology in August 2009.This officer can now participate in mutual evaluations assessing the AML/​CTF programs of FATF/​APG member nations. Contribute to a global network of FlUs and AML regulators Exchanging information with overseas counterparts AUSTRAC shares financial transaction information and intelligence with its counterpart FlUs all over the world.This information strengthens the global effort to combat money laundering and terrorism financing, and benefits the operational work of FlUs and law enforcement agencies tracking the international movement of the proceeds of crime. In return, AUSTRAC receives valuable financial intelligence from its international partners to assist in its own detection and analysis of illicit transactions. Exchange instruments Before exchanging information with a foreign FIU, AUSTRAC negotiates an exchange instrument with that FIU, typically in the form of an MOU. Each exchange instrument outlines the specific terms of information exchange with that particular international jurisdiction. In 2009-10 AUSTRAC entered into three new exchange instruments with the FlUs of Armenia, Guatemala and Sri Lanka, bringing AUSTRAC's total number of exchange instruments with international counterparts to 59 (58 relating to the exchange of financial intelligence with overseas FlUs and one, with Canada, relating to regulatory information). AUSTRAC also receives financial transaction information and intelligence from other foreign jurisdictions that do not reguire an exchange instrument to be in place before providing information to AUSTRAC. AUSTRAC MOUS as of 30 June 2010 Albania Czech Republic Korea (Republic of) Singapore Argentina Denmark Latvia Slovakia Armenia Estonia Lebanon Slovenia Bahamas France Malaysia South Africa Belgium Germany Marshall Islands Spain Bermuda Guatemala Mauritius Sri Lanka Brazil Guernsey Mexico Sweden Bulgaria Hong Kong Netherlands Thailand Canada India New Zealand Ukraine Cayman Islands Indonesia Panama United Kingdom Chile Ireland Philippines United States of America Colombia Isle of Man Poland Vanuatu Cook Islands Israel Portugal Venezuela Croatia Italy Romania Cyprus Japan Saint Kitts and Nevis Intelligence exchanges The table below summarises AUSTRAC's intelligence exchanges with its overseas counterparts in 2009-10, including requests for financial intelligence to and from overseas FlUs, as well as spontaneous intelligence exchanges with counterparts on matters of possible interest. Strengthening international relationships To establish and further enhance its relationships with its international counterparts, AUSTRAC hosts delegations from international Fills and regulators, as well as other international organisations, agencies and private sector entities. From time to time AUSTRAC co-hosts or involves its domestic partner International intelligence exchanges, 2006-07 to 2009-10 2006-07 2007-08 2008-09 2009-10* Requests to overseas FlUs 51 80 93 108 Requests from overseas FlUs 124 190 111 80 Outgoing spontaneous exchanges 19 31 34 23 Incoming spontaneous exchanges 20 32 25 48 * Note: for consistency with the new PBS key performance indicator introduced for 2009-10 ('Increased financial intelligence exchange with foreign financial intelligence units'), these 2009-10 figures include international exchanges of financial intelligence only. The totals listed for previous years include both financial intelligence exchanges with overseas counterparts and exchanges of more general AMIVCTF information - these general information exchanges have been omitted from the 2009-10 figures above, and have instead been summarised below). agencies in its international visitor program. Visit programs benefit AUSTRAC and its international counterparts by fostering higher level bilateral dialogue on strategic AML/​CTF issues. Overseas delegations visiting AUSTRAC benefit from operational level exchanges that may provide insight and awareness into AUSTRAC's role, general operations, and analytical and supervisory frameworks. In turn, AUSTRAC benefits by increasing its awareness of AML/​CTF information exchanges AUSTRAC fulfilled a number of requests to provide general AML/​CTF information from both MOU and non-MOU international counterparts. In 2009-10 the majority of these requests for information related to AUSTRAC's AML/​CTF regulatory and supervisory activities, governance and suspect matter reporting regime, as well as requests from overseas agencies to enter into negotiations to establish MOUs. the AML/​CTF frameworks in place in foreign jurisdictions and the operations of other agencies. Throughout 2009-10 AUSTRAC hosted visiting delegations from the following jurisdictions and organisations: Bangladesh, Canada, China, Fiji, Indonesia, South Korea, Lebanon, Malaysia, Nepal, New Zealand, Oman, Pakistan, Solomon Islands, Sri Lanka, South Africa, Thailand, United Nations Conference on Trade and Development, United States of America, and Vietnam. The visiting delegations included in-depth attachment programs focusing on specific AML/​CTF issues, including an information technology program for officers of the Fiji FIU and the delivery of a two-part program for Bank Indonesia officers focusing on industry-based regulation and supervision. In addition, AUSTRAC held a financial intelligence analysis workshop for officers from the FIU of Bangladesh. In June 2010 AUSTRAC's CEO and Executive General Manager Intelligence visited their counterparts in the United States (Financial Crimes Enforcement Network), Canada (Financial Transactions and Reports Analysis Centre of Canada - FINTRAC) and the United Kingdom (the Financial Services Authority and Her Majesty's Customs and Revenue Service). These meetings included detailed discussions about AML/​CTF regulatory policy, industry supervision and intelligence. The meetings were also useful in identifying common solutions to emerging money laundering and terrorism financing trends and methods to enhance financial intelligence capability and supervisory oversight. Collaboration with domestic stakeholders AUSTRAC continued to work closely with other government agencies in 2009-10, including the Attorney-General's Department, and provided input into whole-of-government briefings and policy positions for bilateral and multilateral meetings and initiatives. In 2009-10 representatives from AUSTRAC attended and provided briefings for meetings coordinated by the Department of Foreign Affairs and Trade (DFAT) on the International Counter-Terrorism Coordination Group. CASE STUDY Thousands of dollars in drug money laundered through timber yard Law enforcement officers began investigating a significant drug selling operation, as well as the money laundering methods used by the suspects to launder the proceeds of their drug sales. To launder the illicit cash from the sale of the drugs, suspect A and his brother, suspect B, entered into an agreement with an associate who owned a timber yard. The timber yard owner received the cash from the proceeds of the drug sales and then provided the suspects with legitimate cheques which were placed into personal accounts or a property development account in the name of suspect A. In this way, the suspects attempted to'co-mingle'the illicit funds with the legitimate funds from the timber yard.The timber yard owner retained a profit of 13 per cent of the amount laundered. Over a nine-month period, approximately AUD509,000 was deposited into accounts held by suspect A. This amount includes AUD319,000 laundered through the timber yard, as well as cash from drug sales which was directly deposited into various bank accounts held by suspect A. Both suspects A and B were arrested and charged with various offences including money laundering under the Confiscation of Proceeds of Crimes Act 1989 (NSW). Source: AUSTRAC typologies and case studies report 2010 Participating in international AML/​CTF organisations A number of international organisations exist to support international AMIVCTF standards and to examine the extent to which those standards have been adopted around the world. AUSTRAC actively engages with several of these international AML/​CTF bodies, including the FATF, the APG and the Egmont Group of FlUs. Financial Action Task Force The FATF is an international intergovernmental body that develops and promotes policies to combat money laundering and terrorism financing around the world. FATF established the'40 Recommendations' relating to money laundering and '9 Special Recommendations on Terrorist Financing'. These 40+9 Recommendations are widely accepted as the global AML/​CTF standards. AUSTRAC representatives attended and participated in the FATF plenary meetings held in October 2009, February 2010, and June 2010; the FATF-Ca rib bean FATF Working Group meetings held in November 2009; and the FATF Expert Group meetings held in May 2010. AUSTRAC also contributed to FATF's International Cooperation Review Group (ICRG) by providing an independent reviewer to assess one of the jurisdictions subject to the ICRG process. AUSTRAC worked with Australian government agencies and departments, including the Attorney-General's Department, to contribute to effective policy outcomes within the FATF forum. This included out-of-session engagement on a number of broader global AML/​CTF initiatives. Asia/​Pacific Group on Money Laundering The APG is an independent regional body consisting of 40 member jurisdictions and a number of international and regional observers committed to the effective implementation and enforcement of FATF's 40+9 Recommendations. The AUSTRAC CEO leads the Australian Government delegation to the APG. In 2009-10 AUSTRAC continued to play an active role in the work of the APG, in particular participating in the APG Annual Meeting held in Brisbane in July 2009, attending a Money Laundering Typologies Workshop hosted in Cambodia in October 2009 and contributing to the APG's mutual evaluation ofTonga's AMIVCTF regime. AUSTRAC also met other APG members in its capacity as a member of the APG Donors and Providers Group to coordinate and discuss general AML/​CTF training and technical assistance opportunities and challenges in the region. Egmont Group of Fills The Egmont Group is a key international body consisting of 120 FlUs working to improve international cooperation in the exchange of information, training and sharing of AML/​CTF expertise. In 2009-10 AUSTRAC's Executive General Manager Supervision continued as the Oceania regional representative on the Egmont Committee. AUSTRAC participated in the Egmont Working Group meetings in February 2010 and was represented at the Egmont Plenary and Working Group meetings held in June 2010. In close cooperation with the FIU of New Zealand, AUSTRAC commenced its sponsorship of the Papua New Guinea FlU's application for membership of the Egmont Group. AUSTRAC is also sponsoring Solomon Islands'Egmont membership application, in cooperation with the Indonesian and Cook Islands FlUs, a process which will continue in 2010-11. Gaining Egmont membership would enable these two FlUs to take advantage of the cooperation and mutual assistance, information sharing and training opportunities provided by Egmont membership, in turn strengthening their ability to contribute to AML/​CTF efforts in the region. Developing the capacity of overseas financial intelligence units In 2009-10 AUSTRAC continued its program of international capacity-building with Fills in South-East Asia, South Asia, the Pacific and Africa. AUSTRAC offers technical assistance and training to build the AML/​CTF capacity of overseas FlUs and contribute to overall international AML/​CTF efforts. Working with FlUs in Asia South East Asia Counter-Terrorism Program Since 2004 AUSTRAC's SEACT Program has developed the AM1VCTF capacity of FlUs in the ten Association of Southeast Asian Nations (ASEAN) member nations: Brunei, Burma, Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand and Vietnam. In 2009-10 AUSTRAC's SEACT Program activities included a number of regional seminars addressing key AML/​CTF methodologies, recommendations and risks, and bilateral training workshops to improve F1U effectiveness and compliance with international recommendations. Examples included: • the SEACT Annual Regional Workshop on AML/​CTF leadership in June 2010 in Kuala Lumpur, Malaysia, including FIU heads and senior officials from approximately 30 countries, including delegates from Africa, the Pacific, South Asia, South-East Asia and the Middle East • a Brisbane workshop in July 2009, titled 'AML/​CTF Challenges &​ Opportunities: A Regional Reflection', which examined AML/​CTF developments in South-East Asia over the past five years and identified future training needs for regional FlUs. In June 2010 AUSTRAC concluded its six-year SEACT technical assistance and training program. CASE STUDY Neighbourhood pharmacy linked to motorcycle drug gang A joint law enforcement investigation began scrutinising the activities of a pharmacy that was receiving regular deposits into its bank accounts of AUD20,000 to AUD30,000 per week. This was a higher than normal turnover compared with other pharmacies in the area. Further adding to the suspicions of the investigating officers was the fact that the owner of the pharmacy was linked to members of an outlaw motorcycle gang. In total, AUDI .1 million in cash was deposited into the pharmacy's accounts over a 15-month period. The funds were deposited through a bank branch near the pharmacy. Law enforcement investigations also established that the pharmacy purchased significantly more pseudoephedrine-based products than other pharmacies in the area.This led authorities to suspect the owners or someone involved in the pharmacy had been diverting legal pseudoephedrine-based products from the legitimate market and selling them to be used in the manufacture of illegal drugs. Sou rce: AUSTRAC typologies and case studies report 2010 Financial Monitoring Unit of Pakistan Capacity Building Program AUSTRAC commenced the FMU of Pakistan Capacity Building Program in December 2008. This program was funded for 12 months by AusAID. Under the program, AUSTRAC delivered technical assistance and training to FMU and its counterpart financial regulators. AUSTRAC recently received further funding from AusAID to continue AML/​CTF capacity building to Pakistan for 15 months from July 2010 under the Developing Economic Security in Pakistan Program. This program will continue to enhance the security of Pakistan's financial systems and markets against money laundering and terrorism financing. CASE STUDY Remittance dealer laundered drug money for Middle Eastern crime gang AUSTRAC information assisted law enforcement officers investigating a Sydney-based family and their associates who were suspected of engaging in criminal activities. AUSTRAC disseminated 14 financial intelligence assessments and numerous suspect transaction reports (SUSTRs) to law enforcement partner agencies detailing the activities of the criminal network. The SUSTRs included details of cash being deposited into an account in one state and then being withdrawn shortly after from an interstate location. The syndicate also made significant cash withdrawals and deposits. Furthermore, there were a number of international funds transfers into and out of Australia, with the majority of funds being transferred into Australia. This information proved valuable to the investigators in helping to clarify the size and structure of the network. The investigation focused on a particular remittance dealer who was suspected to have remitted funds to Lebanon on behalf of Middle Eastern organised crime groups. Authorities also alleged that the remittance dealer had a reputation within his community as someone who could transfer funds out of Australia without the transfers coming to the attention of law enforcement agencies or AUSTRAC. As the law enforcement investigation progressed, it identified a second money laundering syndicate operating predominantly through a casino. Law enforcement officers conducted a series of raids across Sydney and Melbourne, and ten men were arrested for alleged involvement in trafficking AUD250,000 worth of cocaine, ice and cannabis from NSW to Victoria. Source: AUSTRAC typologies and case studies report 2010 Jakarta Centre for Law Enforcement Cooperation The JCLEC is a joint initiative between the Indonesian and Australian Governments to provide a regional training centre to facilitate cooperation and capacity building in counter terrorism and transnational crime prevention. In 2009-10 AUSTRAC continued to provide a Financial Analysis Training Advisor to JCLEC to develop and deliver training programs related to intelligence and financial investigations. Indonesian FIU/​AUSTRAC Partnership Program In 2009-10 AUSTRAC continued to work with the Indonesian FIU, PPATK, to strengthen its operational and information technology capacity. AusAID's Government Partnership Fund has funded AUSTRAC's provision of assistance to PPATK and the placement of two AUSTRAC officers within PPATK to assist in enhancing Indonesia's AML/​CTF regime. The Indonesian AUSTRAC Partnership Program has enabled AUSTRAC to enhance its relationships with various Indonesian AML/​CTF stakeholders, such as Bank Indonesia, the Indonesian National Police and the Indonesian Regulatory Authority for the Indonesian Capital Market, as well as Indonesia's anti-corruption body, KPK. Financial Intelligence Capacity Building in South Asia Program AUSTRAC's Financial Intelligence Capacity Building in South Asia (FICSA) Program delivers capacity building to FlUs, financial regulators and law enforcement agencies in India, Sri Lanka and Bangladesh, and is funded under AusAID's Public Sector Linkages Program. AUSTRAC held a regional seminar in October 2009 in New Delhi, India, for all three participating jurisdictions to coordinate the exchange of money laundering and terrorism financing intelligence and increase the participants' knowledge on developing AML/​CTF capacity. AUSTRAC has secured funding under the Public Sector Linkages Program to continue this program for a further 12 months, from July 2010.The new program, which will also include assistance to Nepal, will strengthen the capacity of counterpart FIU and AMI7CTF regulators in South Asia. Working with Fills in the Pacific AUSTRAC's Pacific Region Fill Capacity Building Program (Pacific Program) commenced in May 2009 and was funded under AusAID's Pacific Governance Support Program for 12 months. This program delivered operational and IT-related capacity building to the Fills of 12 Pacific Island Forum countries: Cook Islands, Federated States of Micronesia, Fiji, Kiribati, Marshall Islands, Nauru, Palau, Papua New Guinea, Samoa, Solomon Islands, Tonga and Vanuatu. AUSTRAC held two regional workshops as part of this program, covering financial intelligence analysis and coordination, money laundering typologies and AML/​CTF compliance. These workshops included a co-sponsored workshop on environmental crime with the Anti-Money Laundering Assistance Team of the Attorney-General's Department and the University of Wollongong. AUSTRAC has secured funding from AusAID for a three-year Pacific FIU Sustainability and Capacity Building Project, commencing in July 2010. Working with Fills in Africa In May 2009, the Minister for Home Affairs announced funding in the Budget of $17.2 million over four years for AUSTRAC, the AFP and the Attorney-General's Department to help strengthen African law enforcement agencies and legal institutions as part of a wider international program. AUSTRAC officers participated in the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) plenary, held in Tanzania in March 2010. AUSTRAC was granted in-principle agreement for observer status at the ESAAMLG plenary. AUSTRAC's work with the ESAAMLG assists the agency to develop and strengthen relationships in the region and improve cooperation and coordination between AUSTRAC and ESAAMLG member countries. AUSTRAC held a regional workshop,'AML Lifecycle: A Workshop for FlUs', held in Windhoek, Namibia in May 2010.
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