AUSTRAC issues know-your-customer, cuckoo smurfing warning
James Frost, 28 June 2021
The financial intelligence regulator has warned reporting entities to stay on top of their obligations, following recent changes to the AML-CTF Act that added clarity on know-your-customer requirements and banned certain types of correspondent banking.
AUSTRAC CEO Nicole Rose spoke of the growing awareness of the damage money laundering was doing to the community in a newsletter that reminded entities they needed to verify a customer before letting them make transactions and contained a guide on how to spot a form of money laundering known as “cuckoo smurfing”, which facilitates the transfer of funds overseas without alerting the authorities.
“Businesses are realising the threats that organised criminals pose, not only to them, but to our communities, people’s livelihoods, the safety of our children and our national security,” Ms Rose said in a statement.
“Federal, state and territory government regulators, intelligence, law enforcement agencies and financial services businesses must work together to address vulnerabilities in our financial sector.”
Under a package of reforms known as Phase 1.5, reporting entities have been reminded that providing a service to a customer who has not been verified is prohibited and in breach of the AML-CTF Act. Breaches can attract a fine of $22.2 million each.
