Anthony Quinn, founder and CEO of Arctic Intelligence, the Australian RegTech company, is imploring the international Financial Action Task Force (FATF) to finish its review of the country’s anti-money laundering (AML) regulations.
The FATF made headlines last week when it was revealed that the G7 body had halted its investigation into how Australia is living up to its commitment to stop money laundering.
The review was expected to reprimand the country for its failure to update its AML laws. Real estate agents and law firms would have been highly impacted by these updates and have subsequently lobbied hard against them.
The FATF said it was not just the Australian review that had been suspended, but all planned work as the organization was reviewing its own effectiveness.
Still, some experts made the case that the move had been made to spare the Morrison government another embarrassment in this area.
Responding to that notion, a government spokesperson stated that it was “committed to continually improving Australia’s anti-money-laundering and counter-terrorism financing” (CTF) laws.
However, Quinn does not agree with the government’s optimistic outlook. “The decision by the FATF to postpone the long-awaited and much needed mutual evaluation follow-up in Australia could not have come at a worse time,” he told RegTech Analyst. “The role of the FATF is to shine a light on countries that are not meeting their expectations and Australia is clearly not, in fact it’s a complete basket case.
“Since 2015, Australia has completed less than 10% of the 84 recommendations they committed to undertake following FATF’s last visit – this clearly shows that the Australian government is unfazed by criticism from the FATF. [Moreover,] since FATF’s last visit we have seen numerous examples through epic failings by the banks at the Royal Banking Commission as well as systemic non-compliance with AML laws at two of our largest and systemically important financial institutions, first CBA and last week at Westpac.”
In the face of this, Quinn continued, “The FATF need to urgently come back and review what’s going on In Australia and urge our political leaders to take action on the long overdue commitments they made to the FATf in 2015 – otherwise [the FATF] will turn into a laughing stock just like the Australian government.”
He added, “The lack of international pressure creates the wrong environment for tackling financial crime – the government remains slow to pass laws, the regulators are underfunded and don’t have the laws they need to widen the scope of AML laws and that all leads to apathy, complacency and means that Australia remains a weak link in the global fight against financial crime.”
The news about the FATF suspending the review comes as Australia’s financial services industry is going through a moment of change.
These changes were partially sparked by the findings of the Australian Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry revealing systemic mismanagement and misconduct in the sector earlier this year.
As a result, regulators have clamped down hard on the sector, with the Australian Prudential Regulation Authority’s chairman Wayne Byres telling industry leaders that their failure to properly self-regulate had left the authority with no choice but to take off the kid gloves in the future.
This has already led to more companies self-reporting to the authorities.
Incidentally, the government has also loosened up the barriers to entry for FinTech and RegTech companies. While this has already resulted in a plethora of challenger banks establishing themselves in Australia, the government wants to do more to support the FinTech and RegTech sectors.
Earlier this fall, the Senate launched a committee looking for ways to remove barriers to entry and to help the two industries grow.
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