Accountants enlisted in war against dirty money
CPA Australia and CA ANZ say proposed anti-money laundering reforms must be balanced and proportionate to avoid burdening smaller firms.
The government will impose new rules on accountants, along with lawyers and real estate managers as it seeks to tighten outdated anti-money laundering laws it claims have made Australia a “playground for organised crime”.
However, accounting bodies warn that any increased regulation needed to consider that the industry was already heavily regulated, calling for laws to be proportionate to the risk.
In a National Press Club address on Tuesday, Attorney-General Mark Dreyfus said anti-money laundering laws currently reserved for “tranche one” entities – financial institutions, gold dealers and casinos – would be extended to “tranche two” professional services providers, including accountants.
“We want to modernise the Anti-Money Laundering and Counter-Terrorism Financing Act to ensure it keeps pace with the increasingly digital, instant nature of our global financial system,” he said.
Current obligations that apply to tranche one entities include understanding their customers, assessing the risk of money laundering and implementing controls to mitigate the risk.
Organisations covered by the regime must provide data on cash transactions, international funds transfers and identify suspicious activity with non-compliance leading to sanctions and fines.
Dreyfus said proposed reforms would make same requirements apply to tranche two entities but “at a lesser scale”. “It's really about putting controls around risk, and not turning a blind eye to crime that might be in front of you,” he said.
CPA Australia spokesperson Gavan Ord warned that any new reforms would need to be proportionate and avoid piling on to the “mountain of regulatory obligations” faced by accountants.
“Accountants are already highly regulated by multiple regulators,” he said. “Laws need to be proportionate to the risk and avoid duplicating existing statutory and professional obligations imposed on professional accountants.”
Ord said anti-money laundering obligations already faced by the profession included the TPB’s requirement for tax agents to verify the identity of clients.
“Such existing obligations need to be factored into the design of anti-money laundering obligations for professional accountants to reduce unnecessary regulation burden and cost on professional accountants, while still meeting the policy objectives,” he said.
“Any moves that simplify the implementation of the anti-money laundering regime will be very much welcomed and supported.”
CA ANZ chief executive Ainslie van Onselen welcomed the reforms but said complementary legislation should also be considered for the regime to be “as efficient and effective as possible”.
“For example, in order for our members to complete timely and affordable customer due diligence, reporting entities need a beneficial ownership register, access to digital ID verification and accurate business registers that are free to search, like they are in other countries,” she said.
CA ANZ recommended a sector risk assessment on accounting services identify the most at-risk services provided to help reporting entities.
It also recommended a “whole-of-government consideration” of the impact tranche two reforms will have on small practices.
“Chartered accountants can play a vital role in detecting and preventing criminal activity and our members want to be further empowered to do their part in ensuring Australia meets its obligations,” van Onselen said.
This year, the government committed $166.4m in budget funding for AUSTRAC to implement its reforms, which Dreyfus said would include delivering education and guidance to support tranche two businesses.
Dreyfus blamed the former Coalition government for failing to keep anti-money laundering laws in line with global standards, causing Australia to become a “playground for organised crime” and a “haven for money laundering”.
“Catching and prosecuting these criminals is important, so is holding businesses to account when they are asleep at the wheel. It is a far better outcome for us all if we can prevent these crimes from happening in the first place,” he said.
“Let me be very clear – opposing these reforms means aiding and abetting the criminal abuse of our financial system by drug traffickers, people smugglers, terrorists and those who exploit and abuse children.”
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