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Money laundering watchdog demands answers -

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Money laundering watchdog demands answers

Gus Goswell reported this story on Friday, November 6, 2009 12:38:00

SHANE MCLEOD: Australia's anti-money laundering regulator has sounded a warning that it's on the
beat, policing the Federal Government's counter-terrorism financing laws.

The Australian Transaction Reports and Analysis Centre, or AUSTRAC, has asked a New South Wales
company to explain the flow of money through its business.

It's the first time AUSTRAC has made such a demand since the Anti-Money Laundering and
Counter-Terrorism Financing Act was passed in 2006.

Gus Goswell reports.

GUS GOSWELL: The business of remittance might not be constantly on your mind but it's got the
attention of many people working in the field of counter-terrorism. Remitters transfer money from
place to place, generally from one country to another.

Yesterday Australia's anti-money laundering watchdog AUSTRAC released details of the demands it's
made to a small Sydney company that's in the business of moving money around.

AUSTRAC has given the company 28 days to explain the steps it takes to prevent itself being party
to money laundering and terrorism financing.

This doesn't mean the company is involved in funding terrorism but it is a sign that AUSTRAC is out
and about enforcing the laws that attempt to prevent money being sent from Australia to possible
terror networks overseas.

AUSTRAC's move comes just weeks ahead of the release of the findings of a detailed Australian
Institute of Criminology investigation into money laundering and funding of terrorism. David Rees
is a research analyst working on the institute's report.

DAVID REES: Alternative remittance is a way of sending money overseas. It's similar in that sense
to say using a bank or using a big corporate remitter. But an alternative remitter is usually based
within a community, often a member of that community and they are the contact point as it were for
when a person in that community wants to send money back to their country of origin.

GUS GOSWELL: And the concern here, and the way in which in the Federal Government's legislation
affects this area is that this money could be used to finance terror cells overseas?

DAVID REES: I think the concern has been that the sector has not been very thoroughly regulated and
there are concerns it could be used for criminal terrorist financing activity. The Government has
introduced more detailed regulation for alternative remitters, for instance the need to register
with AUSTRAC, the need to introduce an AML/CTF program to cut down the risk of criminal terrorist
involvement, the need to submit a compliance report twice each year.

GUS GOSWELL: And there was this significant legislation passed in 2006.

DAVID REES: That's right.

GUS GOSWELL: AUSTRAC's action yesterday in issuing this remedial direction, is that a significant
step since the passing of that 2006 legislation?

DAVID REES: I think the remedial notice is significant in that it reminds the sector of the
requirements of the legislation and the importance of AML/CTF programs and staff being aware of
these issues.

GUS GOSWELL: And this four year investigation that you and your colleagues at the Institute of
Criminology have been conducting, has that uncovered much evidence of money laundering possibly
being used to finance terrorism?

DAVID REES: It's, let's say it's found a number of issues in the sector which we will be reporting
on which are relevant to issues like money laundering and terrorism financing and we are expecting
to issue a report soon on alternative remittance systems.

SHANE MCLEOD: That's David Rees from the Institute of Criminology, speaking there with Gus Goswell.