Australian Transaction Reports and Analysis Centre
Encyclopedia
Australian Transaction Reports and Analysis Centre (AUSTRAC) is an Australian government agency, established in 1989 under the Financial Transaction Reports Act 1988 and continued in existence under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act). Certain classes of designated services must be reported to AUSTRAC, in particular bank
cash transactions (i.e. note
s and coin
s) of $10,000 or more. AUSTRAC passes information on to other government agencies to help them act against tax evasion
, organised crime, money laundering
, and welfare fraud
.
Transactions which must be reported are,
Members of the public are also obliged to report to AUSTRAC if they carry $10,000 or more (or equivalent in a foreign currency) of cash into or out of Australia, which can be done on forms available from the Australian Customs Service
at airport
s and sea ports. The Customs service attempts to detect evasion of this requirement. Airline
s are not held liable for what their passengers carry.
Cross-border movement of bearer negotiable instruments of any amount must also be reported if requested by a Customs or police officer.
It's an offence under the Act for anyone to split a transaction into two or more parts with a dominant purpose of avoiding the reporting rules and thresholds.
Certain classes of transactions are exempt, or may be exempted on application. For example established customers transacting amounts typical of their lawful business for payroll
, or retail
or vending machine
takings, etc. Motor vehicle traders are specifically not in the retailers exemption, their transactions are not eligible for exemption (likewise boat, farm machinery and aircraft traders).
Under the Freedom of Information Act 1982
, any person can access records held by AUSTRAC, subject to certain exemptions.
For banks and similar, identification requirements are determined by a risk-based approach, which may differ for each reporting entity.
It's an offence to open or operate an account with a reporting entity under a false name, punishable by a fine or up to 2 years imprisonment.
takeover of TNT (see TNT N.V.
) in 1999. Simon Hannes
was an executive at Macquarie Bank which was advising TNT, and he bought about $90,000 of TNT call options under the name "Mark Booth" to profit when the bid was announced. He was convicted of insider trading
but also of two offences under the Financial Transactions Reports Act since he had made multiple cash withdrawals and deposits each just under the $10,000 threshold, apparently to avoid that reporting. His sentence for those transactions was 4 months jail.
Bank
A bank is a financial institution that serves as a financial intermediary. The term "bank" may refer to one of several related types of entities:...
cash transactions (i.e. note
Banknote
A banknote is a kind of negotiable instrument, a promissory note made by a bank payable to the bearer on demand, used as money, and in many jurisdictions is legal tender. In addition to coins, banknotes make up the cash or bearer forms of all modern fiat money...
s and coin
Coin
A coin is a piece of hard material that is standardized in weight, is produced in large quantities in order to facilitate trade, and primarily can be used as a legal tender token for commerce in the designated country, region, or territory....
s) of $10,000 or more. AUSTRAC passes information on to other government agencies to help them act against tax evasion
Tax evasion
Tax evasion is the general term for efforts by individuals, corporations, trusts and other entities to evade taxes by illegal means. Tax evasion usually entails taxpayers deliberately misrepresenting or concealing the true state of their affairs to the tax authorities to reduce their tax liability,...
, organised crime, money laundering
Money laundering
Money laundering is the process of disguising illegal sources of money so that it looks like it came from legal sources. The methods by which money may be laundered are varied and can range in sophistication. Many regulatory and governmental authorities quote estimates each year for the amount...
, and welfare fraud
Welfare fraud
Welfare fraud refers to various intentional misuses of state welfare systems by withholding information or giving false or inaccurate information. This may be done in small, uncoordinated efforts, or in larger, organized criminal rings...
.
Operation
"Reporting entities" (a wide range of businesses and institutions - specified in the AML/CTF Act - which deal in cash, bullion and financial transactions) must report transactions to AUSTRAC; such entities include,- BankBankA bank is a financial institution that serves as a financial intermediary. The term "bank" may refer to one of several related types of entities:...
s and similar financial institutions such as building societies. - CorporationCorporationA corporation is created under the laws of a state as a separate legal entity that has privileges and liabilities that are distinct from those of its members. There are many different forms of corporations, most of which are used to conduct business. Early corporations were established by charter...
s. - Insurance companies and intermediaries.
- Securities dealers, such as stock brokerStock brokerA stock broker or stockbroker is a regulated professional broker who buys and sells shares and other securities through market makers or Agency Only Firms on behalf of investors...
s. - Unit trustUnit trustA unit trust is a form of collective investment constituted under a trust deed.Found in Australia, Ireland, the Isle of Man, Jersey, New Zealand, South Africa, Singapore, Malaysia and the UK, unit trusts offer access to a wide range of securities....
managers and trustees (but cash management trusts transacting only by cheque or similar are exempt). - Travellers cheque or money order issuers.
- Cash carriers and payrollPayrollIn a company, payroll is the sum of all financial records of salaries for an employee, wages, bonuses and deductions. In accounting, payroll refers to the amount paid to employees for services they provided during a certain period of time. Payroll plays a major role in a company for several reasons...
preparation businesses. - CasinoCasinoIn modern English, a casino is a facility which houses and accommodates certain types of gambling activities. Casinos are most commonly built near or combined with hotels, restaurants, retail shopping, cruise ships or other tourist attractions...
s. - BookmakerBookmakerA bookmaker, or bookie, is an organization or a person that takes bets on sporting and other events at agreed upon odds.- Range of events :...
s, including totaliser agencies. - Bullion dealers.
- SolicitorSolicitorSolicitors are lawyers who traditionally deal with any legal matter including conducting proceedings in courts. In the United Kingdom, a few Australian states and the Republic of Ireland, the legal profession is split between solicitors and barristers , and a lawyer will usually only hold one title...
s, acting on their own behalf (e.g. their trust fund, or originated mortgagesMortgage loanA mortgage loan is a loan secured by real property through the use of a mortgage note which evidences the existence of the loan and the encumbrance of that realty through the granting of a mortgage which secures the loan...
).
Transactions which must be reported are,
- CurrencyCurrencyIn economics, currency refers to a generally accepted medium of exchange. These are usually the coins and banknotes of a particular government, which comprise the physical aspects of a nation's money supply...
of $10,000 or more, or foreign currency of that value. - International funds transfer instructions, either into or out of Australia, of any amount.
- Suspicious transactions of any kind; being transactions the dealer may reasonably suspect of being part of tax evasionTax evasionTax evasion is the general term for efforts by individuals, corporations, trusts and other entities to evade taxes by illegal means. Tax evasion usually entails taxpayers deliberately misrepresenting or concealing the true state of their affairs to the tax authorities to reduce their tax liability,...
or crimeCrimeCrime is the breach of rules or laws for which some governing authority can ultimately prescribe a conviction...
, or might assist in a prosecution.
Members of the public are also obliged to report to AUSTRAC if they carry $10,000 or more (or equivalent in a foreign currency) of cash into or out of Australia, which can be done on forms available from the Australian Customs Service
Australian Customs Service
The Australian Customs and Border Protection Service is the Australian Federal Government agency responsible for managing the security and integrity of the Australian border, facilitating the movement of legitimate international travellers and goods, and collecting border-related duties and...
at airport
Airport
An airport is a location where aircraft such as fixed-wing aircraft, helicopters, and blimps take off and land. Aircraft may be stored or maintained at an airport...
s and sea ports. The Customs service attempts to detect evasion of this requirement. Airline
Airline
An airline provides air transport services for traveling passengers and freight. Airlines lease or own their aircraft with which to supply these services and may form partnerships or alliances with other airlines for mutual benefit...
s are not held liable for what their passengers carry.
Cross-border movement of bearer negotiable instruments of any amount must also be reported if requested by a Customs or police officer.
It's an offence under the Act for anyone to split a transaction into two or more parts with a dominant purpose of avoiding the reporting rules and thresholds.
Certain classes of transactions are exempt, or may be exempted on application. For example established customers transacting amounts typical of their lawful business for payroll
Payroll
In a company, payroll is the sum of all financial records of salaries for an employee, wages, bonuses and deductions. In accounting, payroll refers to the amount paid to employees for services they provided during a certain period of time. Payroll plays a major role in a company for several reasons...
, or retail
Retail
Retail consists of the sale of physical goods or merchandise from a fixed location, such as a department store, boutique or kiosk, or by mail, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. Purchasers may be...
or vending machine
Vending machine
A vending machine is a machine which dispenses items such as snacks, beverages, alcohol, cigarettes, lottery tickets, consumer products and even gold and gems to customers automatically, after the customer inserts currency or credit into the machine....
takings, etc. Motor vehicle traders are specifically not in the retailers exemption, their transactions are not eligible for exemption (likewise boat, farm machinery and aircraft traders).
Under the Freedom of Information Act 1982
Freedom of Information Act 1982
The Freedom of Information Act 1982 is Australian Commonwealth Freedom of Information legislation which gives members of the public rights of access to official documents of the Government of the Commonwealth and of its agencies.-Outline of the Act:...
, any person can access records held by AUSTRAC, subject to certain exemptions.
Identification
Reporting entities must identify their customers. Accounts may only be operated by an identified customer, an unidentified customer is blocked. Generally identification can be transferred from one account to another, so that for instance a person once identified does not need to produce documents again when opening a second account at the same institution.For banks and similar, identification requirements are determined by a risk-based approach, which may differ for each reporting entity.
It's an offence to open or operate an account with a reporting entity under a false name, punishable by a fine or up to 2 years imprisonment.
Other agencies
AUSTRAC communicates the information it gathers to a large number of other government agencies, including,- Australian Taxation OfficeAustralian Taxation OfficeThe Australian Taxation Office is an Australian Government statutory agency and the principal revenue collection body for the Australian Government. The ATO has responsibility for administering the Australian federal taxation system and superannuation legislation...
(ATO) - State and territory revenue offices.
- Child Support Agency AustraliaChild Support Agency AustraliaThe Child Support Agency is an Australian Government organisation which was established in 1988 to administer the assessment and collection of child support under the Australian Government's Child Support Scheme.-Overview:...
(CSA) - Australian Federal PoliceAustralian Federal PoliceThe Australian Federal Police is the federal police agency of the Commonwealth of Australia. Although the AFP was created by the amalgamation in 1979 of three Commonwealth law enforcement agencies, it traces its history from Commonwealth law enforcement agencies dating back to the federation of...
(AFP), and which may then communicate information to foreign law enforcement agencies, with appropriate undertakings. - State and territory policePoliceThe police is a personification of the state designated to put in practice the enforced law, protect property and reduce civil disorder in civilian matters. Their powers include the legitimized use of force...
services. - Australian Security Intelligence OrganisationAustralian Security Intelligence OrganisationThe Australian Security Intelligence Organisation is Australia's national security service, which is responsible for the protection of the country and its citizens from espionage, sabotage, acts of foreign interference, politically-motivated violence, attacks on the Australian defence system, and...
(ASIO) - Australian Crime CommissionAustralian Crime CommissionThe Australian Crime Commission is an Australian Government national criminal intelligence and investigation agency. It was formulated under the Australian Crime Commission Act which came into effect on 1 January 2003, establishing the ACC as a national statutory authority to combat serious and...
- Australian Securities and Investments CommissionAustralian Securities and Investments CommissionThe Australian Securities & Investments Commission is an independent Australian government body that acts as Australia's corporate regulator...
(ASIC) - Australian Customs ServiceAustralian Customs ServiceThe Australian Customs and Border Protection Service is the Australian Federal Government agency responsible for managing the security and integrity of the Australian border, facilitating the movement of legitimate international travellers and goods, and collecting border-related duties and...
- CentrelinkCentrelinkCentrelink is the trading name of the Commonwealth Service Delivery Agency , a statutory authority responsible for delivering human services on behalf of agencies of the Commonwealth Government of Australia. The majority of Centrelink's services are the disbursement of social security payments...
(added in 2004) - State commissions and royal commissions against corruption,
- Crime and Misconduct Commission of Queensland
- Corruption and Crime Commission of Western Australia (added in 2004)
- Independent Commission Against Corruption (NSW)
- New South Wales Crime CommissionNew South Wales Crime CommissionThe New South Wales Crime Commission is an Australian statutory corporation with the main objectives of reducing the occurrence of illegal drug trafficking and organised crime in New South Wales. In more recent years, the commission has also taken on a charter of assisting with the investigation of...
- Police Integrity CommissionPolice Integrity CommissionThe Police Integrity Commission was established in 1996 upon the recommendation of the Royal Commission in to the New South Wales Police Service. The commission is a corporation established by the New South Wales Government to prevent, detect and investigate alleged serious misconduct in the New...
(NSW)
- Foreign countries, with appropriate undertakings.
Enforcement
One prominent attempted evasion of the AUSTRAC rules took place ahead of the DutchNetherlands
The Netherlands is a constituent country of the Kingdom of the Netherlands, located mainly in North-West Europe and with several islands in the Caribbean. Mainland Netherlands borders the North Sea to the north and west, Belgium to the south, and Germany to the east, and shares maritime borders...
takeover of TNT (see TNT N.V.
TNT N.V.
TNT N.V., more commonly known as TNT, is an international express and mail delivery services company with headquarters in Hoofddorp, Netherlands. In the Netherlands, TNT operates the national postal service under the name TNT Post. The group also offers postal services in eight other European...
) in 1999. Simon Hannes
Simon Hannes
Simon Gautier Hannes was an Australian senior executive of Macquarie Bank convicted of insider trading over call options bought prior to the takeover of TNT by the Dutch postal service in 1996....
was an executive at Macquarie Bank which was advising TNT, and he bought about $90,000 of TNT call options under the name "Mark Booth" to profit when the bid was announced. He was convicted of insider trading
Insider trading
Insider trading is the trading of a corporation's stock or other securities by individuals with potential access to non-public information about the company...
but also of two offences under the Financial Transactions Reports Act since he had made multiple cash withdrawals and deposits each just under the $10,000 threshold, apparently to avoid that reporting. His sentence for those transactions was 4 months jail.