If one had to sum up the two worst financial crimes in any economy, money laundering and financing terrorist activities would be the top two. The AML CTF Compliance allows the Australian government to monitor such companies and safeguard the activities and finances of all the other services. With the rise in digital technology giving way to the wave of cybercrimes every year, companies and organisations are stepping up and putting all available measures in place to combat such illegal financial activities.
The AML Compliance
By presenting a certain number of obligations without interfering in the rights of individuals, the Australian government can crackdown on activities that make use of money laundering to funnel cash into illegal activities. As part of the act approved by the legislation, these obligations are set in place to combat a large number of crimes ranging from corruption, trafficking, manipulation of the market to evasion of mandatory taxes and other instances of fraud. Trying to conceal any proceeds from the crime-related activity can also be booked under the breach of compliance, liable for the company to pay large fines or even face jail time.
How To Formulate The Best Compliance Program?
Seeing how important AML/CTF Compliance is, companies can use this guide mentioned below to shape a compliance program according to their needs and interests. Make sure that every clause specified under the legislative act is followed. Failure to do otherwise may be considered as a breach of law.
- Tracking Down Suspicious Activities: Some of these activities include depositing a large chunk of money into an account without any reasonable data, failure to provide accurate information when trying to open an account or avail services from the banking institution and presence of fake data in the application or documents. All these are red flags that require immediate attention and must be reported to the proper authorities.
- Sorting Customers Based On Risk: Institutions can create a model that assists customers into different levels of threat depending upon the activity or information they provide. However, proper jurisdiction must be maintained, and policies must be implemented to prevent any unnecessary confusion or bias towards certain groups of customers.
- Start Teaching The Staff And Make Policies For Running The Institution: Employees must be trained to keep an eye out for any type of suspicious activity, whether that’s physical or online, in the accounts. This is crucial for those that are working in high-risk departments, and training programmes or drills must be carried out regularly. Hiring a managing board of officials for this purpose helps keep all these activities in check.
- Audits: Another great way to assess the measures taken to crack down non-compliance is to hire an external team and find any risks in the infrastructure. Officials can monitor the activities and analyse reports to evaluate the measures implemented and see how effective they are.
Why Is AML/CTF Compliance Important In This Day And Age?
- Financial crimes and cases of fraud are on the rise in Australia and they show no signs of slowing down anytime soon. By use of compliance tactics, companies can safeguard their interests and keep all the other illegal activities in check. This is highly crucial today as millions of Australians use digital platforms to transfer money and are more prone to suspicious activities like phishing attempts.
- With the compliance act coming into effect during the year 2006, companies have no choice but to follow through. Failure to do so might bring hefty fines and other penalties that can drain the finances and incur a loss. Additionally, it may also lead to permits getting revoked, halting the business activities or even closing them down permanently.
- Companies that do take the necessary steps to protect their customers from fraud can gain respect and loyalty from fellow customers, clients and even the government. It’s a great way to boost market value and reputation in the long run.