The Australian Transaction Reports and Analysis Centre (AUSTRAC) is regarded as the country’s intelligence unit that helps keep financial crimes at bay in the financial sector. The various reportings involved, preliminary, compliance and others, is what is collectively known as AUSTRAC reporting. The centre has been keeping a check on financial crimes since its advent in 1989 and is mainly done through reports from organisations, institutions, businesses and other corporations. The reason for this is to reduce the chances of money laundering or possible terrorism financing across the country that can jeopardise national security.
There are two main ACTS involved that companies in Australia need to comply with:
- The Financial Transaction Reports Act: The FTR act oversees all institutions in the financial sector that potentially deals with the flow of cash, companies and agencies that provide coverage and other quick financial services, and different trustees that manage or preside over various trust funds, the trust funds beings either their own or belonging to other parties, and the various business owners riddled across Australia. Cash transactions of about ten thousand Australian dollars and more need to be compiled and reported to the AUSTRAC. The reporting can also include any suspicious or malicious transactions and other incidents of fraudulent claims. With the help of the FTR act, businesses can reduce the chances of fraud or theft and put a stop to any potential threats before they take hold.
- The AML/CFT Act: Another act that the AUSTRAC reporting covers is the AML/CFT act, which includes information on account deposits, currency exchange, insurance policies such as health or life and other major loans. These transactions, as is the case for the FTR act, must be directed to the AUSTRAC if the amount is ten thousand Australian dollars or more. The reporting must be directed within ten business days, and that includes the transfer of international business funds. Suspicious and fraudulent activities must be reported within 24 hours, and that includes but is not limited to false identification, any information or data that can be used to prosecute or open an investigation against a body, tax evasion and other malpractices that are illegal as per the laws stated by the Commonwealth.
Companies are expected to adhere to these two acts and make the reports promptly. Failure to do resulting in their license getting revoked, business getting closed and even jail time for those involved.
What Happens When A Business Does Not Comply With The Policies Set By The AUSTRAC:
Failure to comply with the two acts mentioned above can result in the centre imposing restrictions and fines as per the following:
- The federal courts of Australia can impose a civil penalty order which will make the business or the organisation pay a specific sum as a fine to the Commonwealth. The total amount will depend upon the degree of fraud involved.
- Notices for infringement can also be issued to the organisation if certain or all areas of any of the two ACTs are violated.
- In many cases, the AUSTRAC can urge the organisation to bring in an external auditor to check out if there is indeed a breach or violation of any of the two ACTs. If the risk assessment is not up to the standards of the AUSTRAC, they can send written notices to the various entities involved.
If the business has an unidentifiable risk, has been dealing with smuggling or terrorism financing, or has reports indicating that it is invoked with tax evasion and money laundering, the AUSTRAC can reject the registration application outright without any further notice.