The Canberra Business Podcast
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The Canberra Business Podcast
The New Anti-Money Laundering Rules Are Coming to Your Industry
Is your business ready for the new AML/CTF reform? ACT AML's Director, Tim Bourke has everything you need to know to be prepared on this episode of the Canberra Business Podcast!
Tim brings us along as he explains the new Tranche 2 reforms, who exactly is going to be affected, how you can protect your business, and when the deadline will hit. Tim explains how ACT AML delivers tailored risk assessments for businesses that may be affected my money laundering schemes, how to protect themselves and keep their business secure.
For more insights, listen to this episode!
Hello and welcome to the Canberra Business Podcast. I'm Greg Harford, your host from the Canberra Business Chamber, and today I'm joined by Tim Burke, the Director of ACT AML. Tim, welcome to the podcast, thanks for having me Greg. Now AML. Anti-money laundering and counter-terrorism finance fighting is obviously something that's topical in the world at the moment, but what is ACT-AML?
Speaker 2:Well, act-aml is a small business operating out of the Canberra region and we're here to provide advisory services to businesses. Ctaml is a small business operating out of the Canberra region and we're here to provide advisory services to businesses who are trying to comply with the anti-money laundering legislation and regulations that are in place federally.
Speaker 1:And that sounds really complicated and scary. Is this new?
Speaker 2:It's not new for a lot of regulated entities at the moment. Banks and financial institutions and a range of other organisations have had to comply since the Act came in in 2006. They've been complying since about 2009. 2009,. But there are big changes coming and that will bring a lot of new reporting entities into the anti-money laundering space that haven't been operating in that space well, haven't been complying with that legislation so far.
Speaker 1:So what kind of businesses are going to get caught up in the anti-money laundering net?
Speaker 2:So the new tranche, two entities are law firms, accounting firms and real estate agents and some precious metal sort of jeweler type businesses, but the big group is real estate agents when you look at number. But it's going to be a big change for anyone who's dealing with law firms, accountants and real estate agents.
Speaker 1:And what do those firms themselves need to know?
Speaker 2:So they need to know that they must comply with the Anti-Money Laundering Act if they offer what are called designated services under the Act, and there's a significant list of those, about nine different types when you're talking about professional services and a couple when you're talking about real estate. If you provide any of those services, then you must have a full anti-money laundering program. You must have processes and procedures in place to address your anti-money laundering risks and ensure that you've got the right approach in your organisation for the governance of those legislative requirements.
Speaker 1:So there'll be some people listening to this, possibly, who are surprised to hear that there aren't already anti-money laundering rules in place across those sectors. Why has it taken us so long to catch up on them?
Speaker 2:That's a good question. The law has been in place for financial services generally for the better part of the last 16 or so years. What they call tranche two is an additional range of non-financial institution providers of particular services that are more susceptible to money laundering the international bodies it's called. The FATF, which is the Financial Action Task Force, is an international body that looks at international compliance, and Australia is one of the final countries to put in the tranche two capabilities and that will then align us to what is seen as global good practice.
Speaker 1:And just to be clear. So at the moment you go and buy a house or you make a big financial transaction, you're already having to provide sort of screeds of information to your bank or your real estate agent or so forth. You're saying that there's more to come.
Speaker 2:To an extent, it depends on how you, as an individual or business, deal with your lawyer, accountant and real estate agent. There are a range of obligations relating to identification that relate to the Anti-Money Laundering Act and how those businesses must operate. There are also other pieces of legislation that relate to how land titles are exchanged and a variety of other compliance obligations. Some of these obligations may overlap or duplicate to an extent or be new, depending on what the service is that's being provided, and businesses also need to work out within their own offerings which ones are regulated, designated services like giving advice on financial matters or exchanging property or buying and selling, but they might provide other services that aren't covered. Things like being a property manager isn't the same sort of regulatory obligation. So you might be providing identification and going through various processes today that can be reused or are duplicative, but there might be some businesses that you're dealing with that need to do new things, and it's going to be a big variety of different scenarios here.
Speaker 1:Okay, and the key date for businesses to be aware of about all this is the 1st of January.
Speaker 2:No, well, the there are a few different dates that you need to know.
Speaker 2:If you're an existing reporting entity, then and that applies to pubs and clubs and and providers of gaming services, just so we're clear about that so if you're, if you're providing those sorts of designated services, then you're going to have to, by March the end of March, so 31st of March 2026, uplift your AML program to make sure that it's in line with the current expectations and requirements. You're going to have to have a new governance body to oversee your program and make sure you've got the right reporting through to the real people who are accountable in your business from a senior leadership perspective. If you're not currently regulated, then after March 31, 2026, you have to register with AUSTRAC as a designated service provider and you have until 30 June 2026 to do that and after that date you must be compliant and have your AML program in place. So you're going to have to implement your program sometime after March, but before 30 June, okay so 30 June 26 is the deadline for anyone coming into the system essentially to be compliant.
Speaker 1:Well, let's jump back a little bit to your business. What exactly do you do as an AML consultant?
Speaker 2:Simply put, I'm here to help. If you've got a business in Canberra or in the region that needs to be compliant with the Act, the obligations are on you to comply. And if I can help, if I can provide support services or advice or guidance or have a look at your program and make sure you're ticking the right boxes, I'm here to help. That's really as simple as it is. It's pretty niche. There's a lot of support material out there from AUSTRAC and it is really really good, and they're going to be putting out a lot more for the tranche 2 entities in the second half of this year. So we'll all look to see what that is and hopefully and I expect it will be very helpful what I've seen so far is very good, but I think you'll still need help. And if you've got a bigger business or if you've got some challenges in front of you that you're just unsure about, that's what I want to help people with.
Speaker 1:And just to be clear, this is national legislation, right? So you're caught up in this, whether you're operating across the border in New South Wales or here in the ACT.
Speaker 2:That's right. This is federal Commonwealth legislation that applies to all Australian organisations.
Speaker 1:Yeah, Appreciate it's early days and many businesses won't have been giving this necessarily a huge amount of thought so far. But how long do you reckon it will take an average business to put in place the compliance programmes that it will need to have?
Speaker 2:The requirements are not small. This is not a ticker box and shouldn't be a ticker box approach. It really does depend a lot on the size of your business and the complexity of your business and the risks that your business face.
Speaker 2:And that's also what AUSTRAC repeatedly talk about. They want you to make an honest effort and have senior management engagement and have a continuous improvement methodology and approach to the way you deal with your program. So you need to be always in a bit of a tug of war between what you see in your business occurring, with a feedback loop into your policies and procedures, and what you're doing to manage those risks and then again watching to see how they play out. So it's not something that should be finished. It should always be improving and developing. But to have a good program, you know you need to really understand what your policies and procedures are. You need to train all your people. You need to have good onboarding processes. These things will require considerable investment, that they all require time, effort, focus.
Speaker 2:It's not something that you can say. It takes a week, a month or a year In saying that if you're regulated today, you've got until the 31st of March next year. So there's a fair bit of work in redesigning your program to make sure that it is meeting the current requirements, setting up that governance body that they want you to have and that you should have to manage your risks and to make sure those risks are visible If you're new to this whole space. You've got less than a year now. It's not going to be months. You should start soon.
Speaker 1:Start now. Start now, Tim. You talk about having a governance body. What does that mean?
Speaker 2:It means having a depends a bit on your entity structure, but realistically it means the accountable people that have the rights to make decisions in your organisation are aware of the risks and what is occurring to mitigate those risks.
Speaker 1:So that could be a board in some cases.
Speaker 2:Could be the board. It could be a specialised subcommittee of a board, if your board does a range of things. Again, it's hard to answer that insofar as each business is different and the whole point of it is that you look at your business and you work out what the appropriate risk governance approach is for that business. So if you're a smaller operator, then that's going to be a very concentrated function, concentrated function. If you're a big multi-franchise organization, that could be the other extreme and you're going to have a range of challenges around the different parts of your business and how they should integrate and who's responsible for what. But you need to put appropriate focus on this to make sure that the right people have the right information and the right visibility and the decisions relating to your risk appetite are made at the right level.
Speaker 1:This sounds like a very complicated exercise for many businesses, but how big's the problem? Do you think that the legislative solution that we have coming into force is it appropriate for what we're seeing out there in terms of money laundering, or is it a bit of a sledgehammer to crack a nut?
Speaker 2:That is a really good question. The answer really is one of it is absolutely necessary at an aggregate level and when you have risks like criminal activities occurring in society and in the community, you need to make sure that there aren't holes and back doors and easier avenues for them to to go through. So what is happening now really closes the loop and and make sure that we are consistent with international standards.
Speaker 2:we we aren't or we don't have some sort of soft underbelly that is, you know, being used or abused by organised crime or criminal activities. This helps and is the holistic outcome that really supports the national approach as a whole and if we work together and collectively, it helps everyone.
Speaker 1:So are we leading the world in this stuff, or are we playing catch-up?
Speaker 2:We're largely playing catch-up. A lot of other countries have already, a number of years ago, implemented the Tranche 2 capabilities. So Australia is one of the remaining countries, a few remaining countries that haven't got the Tranche 2 capabilities in, and so to that extent we're playing catch-up.
Speaker 1:So how did you get into all of this? What's your background?
Speaker 2:I have spent well. Well, I was a career banker, um, and as part of that I probably spent the first half of my career in sales and supporting businesses from a lending and a and a product perspective. And then, uh there, the anti-money laundering legislation came in and I started my journey into risk, risk governance and compliance, and I've been doing that for the better part of the last 10 years and it's sort of one of those things sometimes your front office and other times your back office or middle office and it's that journey of the career. You go where there's interesting work, and I often think there is interesting work in the financial crime and fraud space. It's a big risk to a lot of businesses. It's often in the media. You might not see it as black and white like the legislation, but the news is full of financial crime and fraud and different types of articles like that.
Speaker 1:Tim Burke, the director of ACT AML. Thank you so much for joining me here on the Canberra Business Podcast. I guess, just to round this off for listeners who might just be catching up here, big changes coming to anti-money laundering rules, particularly for lawyers, real estate agents, financial services providers, accountants and things like that. Two key dates 31 March for existing businesses that need to report and 30 June 2026 for everyone else. So if people need more information, where do they go?
Speaker 2:I'd reach out on email. My email address is wwwactamlcomau. Send us a note or reach out. Happy to have a chat and see how we can help. There is also great material on the Austrac website, and I'd also be contacting your local industry bodies, who have a lot of information in this space as well.
Speaker 1:Well. Tim Burke, thank you so much for taking the time to speak to us today. It's been really interesting and I think there's a whole lot of things that many businesses will need to be thinking about ahead of next year when these new anti-money laundering rules come into place. I'm Greg Harford from the Canberra Business Chamber. I've been speaking to Tim Burke from ACT AML. Thank you so much for joining us today and don't forget to follow us on your favourite podcast platform for future episodes of the Canberra Business Podcast. We'll catch you next time you.