Austrac gives Afterpay all-clear following anti-money laundering investigation

4 years ago 134

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The Australian Transaction Reports and Analysis Centre (Austrac) announced on Wednesday it has concluded its investigation into Afterpay, having decided it will not pursue any further regulatory action.

Austrac ordered the appointment of an external auditor into Afterpay's Australian operations in June last year. Specifically, the regulator asked for the examination of Afterpay's compliance with the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act).

"In response to the findings and recommendations identified in the external audit report, Afterpay has uplifted its AML/CTF compliance framework and financial crime function, and completed all remediation necessary to ensure compliance," Austrac wrote on Wednesday.

"After considering the report and the response by Afterpay, Austrac has decided not to undertake further regulatory action.

Austrac said it has "reiterated the importance" for Afterpay to meet its compliance obligations in the future, and that it would continue to work with the company to ensure it understands the compliance obligations it has, as well as its role in fighting financial crime.

The regulator took the opportunity to remind new and emerging financial services businesses that they may have obligations under the AML/CTF Act.

"Startup ventures and technology-based financial businesses must consider whether they have AML/CTF obligations and if they do put in place systems and controls that identify and mitigate money laundering and terrorism financing risks," Austrac said.

Austrac in September asked for a similar investigation of PayPal, with the examination to focus on "ongoing concerns" regarding the Australian arm's compliance with the AML/CTF Act.

These concerns relate to PayPal Australia's compliance with its International Funds Transfer Instruction reporting obligations.

However, Austrac in March announced an extension was granted to the auditors, taking into consideration the scope of the audit, the size, and complexity of PayPal Australia's business operations and the overlap with PayPal's international operations.

"The extension will allow PayPal Australia and the external auditor to fully examine their compliance with the AML/CTF Act," Austrac said.

Last month, Austrac reached an agreement with Westpac to settle the anti-money laundering and counter-terrorism financing allegations that were raised by the watchdog in November 2019.

Should the Federal Court accept the penalty, the bank will pay AU$1.3 billion for breaching the AML/CTF Act over 23 million times. Westpac has admitted to the breaches, which include failing to report international funds transfers of more than AU$11 billion.