On 20th December law firm Allen & Overy published a briefing concerned with the reasoning the judge had given for approving the A$45 million total penalty that had been agreed between AUSTRAC (the Australian AML/CFT authority) and the gambling operator Tabcorp.  The firm says that, as it is the first judgment handed down in respect of the country’s Anti-Money Laundering and Counter-Terrorism Financing Act 2006, all reporting entities in Australia will need to carefully review the Court’s reasoning and re-assess their AML/CTF programmes in light of the deficiencies identified.   Perhaps more importantly, it argues, the size of the penalties has reiterated that this matter requires board-level attention and that the penalties will be large enough to ensure that non-compliance with the AML/CTF Act will not be seen as “a cost of doing business”.  The article says the main points to note are –

  • Liability for non-compliant AML/CTF programme is equivalent to not having a programme at all;
  • The court found that an offence is committed each time a service is provided with a faulty AML/CTF programme in place, meaning that the maximum penalty could be almost unlimited;
  • The fact that Tabcorp’s contraventions were not deliberate is barely relevant, the Act is aimed at deficient management practices; and
  • A$3 million penalty is appropriate for a single failure to carry out an identification check.–-A-review-of-the-first-judicial-analysis-of-key-provisions-in-th.aspx