Before moving into the Act itself, let us first quickly know what is “money laundering” and “terrorism financing”? Money laundering is the process of converting dirty money gained out of illegal activities into clean money. Here, they hide and disguise the real source of money so as to conveniently avoid the prosecution and confiscation of criminal funds.
This money comes from drug trafficking, gambling, smuggling etc. Thereafter the money is wisely placed into the legal financial system through money orders, traveller’s cheques or deposits in banks or other financial institutions even through international money transfer.
Terrorism financing is the process of financially supporting individual terrorists or listed terrorist organisations or non-state actors. Most countries implement measures of Counter Terrorism Financing (CTF) within their respective money laundering laws.
Against these criminal practices came the Anti-Money Laundering and Counter-Terrorism Financing Act of 2006 (AML/CTF).
The Act aims to prevent money laundering and the financing of terrorism by imposing a number of obligations on the:
- Financial sector
- Gambling sector
- Remittance services
- Bullion dealers
The responsibilities of these sectors and businesses include:
- Collection and verification of KYC (Know Your Customer) information about a customer’s identity before providing any kind of services.
- Monitor customer deposits and other transactions.
- Verify the origin of a large amount of money.
- Report immediately in case of inconsistencies and suspicious activities.
Every country has its own government policy for ensuring this anti-money laundering and counter-terrorism financing. In Australia, the Australian Transaction Reports and Analysis Centre (AUSTRAC) is the Australian Government agency responsible for ensuring compliance with the AML/CTF Act. Thus, all financial institutions and sectors including the best online money transfer in Australia must comply with the AML/CTF Act and AUSTRAC for its smooth operation.
