AUSTRAC

Terrorist organisations require funds to attract and train recruits, purchase required resources and enact terrorist operations. Any effort to reduce or hinder the movement of cash through the global financial system is required, since terrorist organisations will attempt to exploit counter terrorism financing (CTF) measures in technology, loop holes via poor governance or regulatory changes to the financial system. With the increasing globalisation of terrorism finance networks, a coordinated global response is required.

In Australian context, AUSTRAC (Australian Reports and Analysis Centre) provides regulatory financial intelligence to assist Australia's law enforcement and intelligence communities in combating terrorism financing by monitoring financial transactions, identifying tax evasion, money laundering, organised crime, welfare fraud and suspected terrorism financing. The aim is an Australian financial system free from criminal abuse by detecting, deterring and disrupting money laundering and terrorism finance and any threat that affect the Australian financial system.

AUSTRAC also prevents individuals who have left Australia to fight overseas from receiving financial support, identifies opportunities to disrupt attempts to undertake terrorism acts, monitors financial activity relating to foreign conflict hotspots, identifies terrorism financing risk, including the misuse of reporting entities, and exchanges relevant intelligence with counterpart financial intelligence units overseas.

AUSTRAC uses various datasets to build a financial intelligence picture in partnership with law enforcement, national security agencies, human resources, revenue agencies, such as the ATO and relevant international counterparts, in addition to working with international organisations to develop global Anti Money Laundering (AML) and Counter Terrorism Funding (CTF) standards, providing training and technical assistance to other countries to develop AML/CTF protocols.

AUSTRAC regulates the AML/CTF compliance of approximately 14,000 businesses (reporting entities) in Australia who are obliged to submit financial transaction reports to AUSTRAC under the Anti-Money Laundering and Counter Terrorism Financing Act 2006, which imposes transaction reporting implications and compliance reporting by any organisation dealing with financial transaction.

Reporting can be made to AUSTRAC via three methods;

• the Threshold Transaction Report (TTR) for transactions valued at $10,000 or more by electronic transfer, to be submitted within 10 days, a requirement under Section 43 of the Act;

• Suspicious Report Matters (SRM), within 24 hours if terrorism is suspected or 3 days in other cases, for suspicious customer behaviour outside of normal profile behaviour;

• and an International Funds Transfer Instruction Report (IFTIR) where an entity who sends or receives instruction to send money overseas, must lodge a report with AUSTRAC within 10 days.

Analysing this transaction data and utilising modelling and partner agencies data and predictive analysis tools, enables AUSTRAC to identify money laundering, terrorism financing and other serious crime.

Since 2010, an AUSTRAC representative has been part of the Australian Federal Police's Terrorism Financing Investigations Unit, and in 2014 the Federal Government allocated $20 million of funding for AUSTRAC, to improve detection and disruption of terrorism financing, and to understanding financial enablers of terrorism. The funding created intelligence analyst roles, supported counter-terrorism investigations; developed new capabilities to collect and transform financial data and improved capacity to capture data about funds transfers to and from Australia.

In April 2016, a review was undertaken of the Anti-Money Laundering and Counter Terrorism Financing Act 2006 with 84 recommendations made. Included was the simplification of AUSTRAC systems to enable better information sharing between relevant organisations. In an article in the Sydney Herald in 2017, Norton and Chadderton commented that the area requiring the most urgent attention in CTF was timely information sharing.

In 2017 the FINTEL Alliance was launched as AUSTRAC recognised an approach to regulation requires constant evolution in changing financial environments. The FINTEL Alliance aims to provide a regulated but collaborative environment, increasing capability in criminal financial exploitation. The aim is a regulated community that collaborates, increasing knowledge to enable vigilance and capabilities for preventing, detecting and responding to threats of criminal exploitation in real-time in contrast to more length process it currently took.

Utilising intelligence and data, tracking tools and methodologies to empower companies and law enforcement to rapidly trial, then implement, global best practice, the Smarter Regulation program will also enable AUSTRAC to lead engagement with relevant reporting entities, to address risk efficiently and effectively by co-designing creative strategies and approaches to emerging risks in the anti-money laundering and counter-terrorism financing with industry partners.

Whilst CTF is relatively strong in Australia, any CTF strategies must be multifaceted, at state, national and international level with relevant legislation to assist in aims. Over the coming years it will be interesting to analyse if FINTEL Alliance provides the right collaborative environment for knowledge and intelligence sharing amongst stakeholders, contributing effectively to international reductions in terrorism financing in real time. However, imperatively CTF measures must remain flexible and adaptive to the changing landscape of terrorism financing, including emerging threats, including crypo technology.