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The Federal Government’s budget allocation for AML practices is a positive start

By Milan Cooper, CEO of anti money laundering technology company First AML. 

Money laundering and financial crime have been pressing issues in Australia, and the government’s efforts to address the issue have been under scrutiny. As the CEO of First AML, a leading provider of anti-money laundering and know-your-customer processes, I am optimistic about the future of financial crime in Australia. The commitment to Tranche 2 and the consultation process kicking off next month, along with additional funding towards the upcoming Financial Action Task Force (FATF), are positive steps towards addressing the issue.

Part of the budget included specific additional funding of $8.6 million for preparing Australia for the upcoming Financial Action Task Force (FATF) mutual evaluation review (MER) in 2026-2027. While the amount may seem modest, it is earmarked for critical activities such as research, consultation, and the development of new rules to meet FATF’s standards. And the best thing about this is the funds are coming from the assets confiscated as proceeds of crime across Australia – a smart and strategic use of resources. By investing in preparing for the FATF MER, Australia can demonstrate its commitment to combating financial crime and ensure that its anti-money laundering framework is up to par with global standards.

One of the biggest challenges in the past has been educating end-users; the people undergoing the AML checks. Our team in New Zealand have said that the lack of education in the past added to the effort for the reporting entities such as real estate agents, lawyers, and accountants to convince and educate the end-users in addition to conducting AML checks. We believe that this is a vital area of improvement that the Australian government needs to prioritise immediately. By educating the end-users, we can make the AML checks process more effective, efficient and reduce the burden on reporting entities.

Outside of these developments, to effectively combat money laundering and financial crime, it’s important to understand the challenges and risks that Australia faces. Criminals are increasingly using sophisticated techniques to hide their illicit activities, such as using digital currencies and online platforms. This requires a comprehensive approach that involves collaboration between financial institutions, regulators, and law enforcement agencies. Companies like First AML have the expertise and technology to help these institutions and other gatekeeping industries detect and prevent money laundering activities, and it’s important for the Australian government to continue supporting these technologies. 

Through this budget allocation, the benefits of a stronger anti-money laundering framework in Australia would trickle down to all relevant industries, including the property industry. It would allow more Australians to obtain property and reduce the impact of artificially inflating property prices due to money laundering. Money laundering can also have serious repercussions for the legal industry. Lawyers are often used as intermediaries in the transfer of funds, which can make them unwitting participants in money laundering activities. The consequences of being involved in such activities can be severe, with lawyers facing the possibility of losing their licenses or even criminal charges. Criminals often use lawyers to provide a veneer of legitimacy to their illicit activities, such as creating false documents or establishing shell companies. This underscores the importance of lawyers in the fight against money laundering and the need for stronger AML regulations and practices within the legal industry.

I also want to point out that a comprehensive anti-money laundering framework is not just about financial regulation. It’s also about preserving the integrity of Australia’s financial system and its reputation. A stronger anti-money laundering framework can help to prevent Australia from being used as a base for money laundering activities and can safeguard the interests of investors and financial institutions.

So while this budget allocation is a significant step towards addressing money laundering and financial crime, it may not be sufficient to combat the ever-evolving tactics of criminals. It is important to recognise that money laundering is a global problem that requires constant attention and investment to stay ahead of those who seek to exploit the system.

The Australian government must continue to allocate resources towards strengthening its anti-money laundering framework and improving the compliance culture across industries. This will require ongoing investment in technology, training, and education to keep pace with the latest threats and trends in financial crime. By committing to these ongoing efforts, the Australian government can ensure the continued safety and stability of its financial system and protect the interests of investors, consumers, and businesses. That aside, we believe that the government is moving in the right direction with the budget allocation for Tranche 2 reform and better AML practices. We stand ready to support the government’s efforts to safeguard Australia’s financial system, but we believe that a stronger commitment is needed to effectively combat this issue. Together, we can create a brighter future for all Australians.