Intensifying Oversight on Australia’s Tobacco and Convenience Stores
Brendan Thomas, the CEO of AUSTRAC, and Amber Shuhyta, the Illicit Tobacco and E-cigarette Commissioner, have called for immediate action from Australia’s banking sector. The focus is on strengthening oversight of tobacco and convenience stores, particularly those with private ATMs and Eftpos. This call to action is driven by the increasing risk of these outlets being used for illicit tobacco trade and money laundering activities.
Non-Bank ATMs and Eftpos: Avenues for Illicit Activities
Thomas highlighted the growing concern over non-bank ATMs and point of sales payment technologies. He noted that these channels are being increasingly used to buy illicit tobacco products and to launder the cash proceeds. “Any bank receiving funds through these channels is at risk of dealing with illicit proceeds,” Thomas warned.
He further emphasized that banks need to assess, mitigate, and, where possible, eliminate these risks. “Where banks continue to provide services to tobacconists and convenience stores, they must closely monitor for and report suspicious matters,” Thomas stated.
Refocusing AML Controls to Target Illicit Trade
Thomas explained that the call to action is about refocusing existing Anti Money Laundering (AML) controls to target a rapidly expanding criminal trade. He warned that many businesses will need to be de-banked to curb this crime type that he says is generating billions of dollars in criminal proceeds. “The scale of the activity is undermining Australia’s economic integrity and community safety,” he added.
As part of the measures to strengthen oversight, AUSTRAC has cautioned banks to be alert to displaced customers as enhanced scrutiny takes effect. While urging stronger controls, Thomas also highlighted the need for banks to strike the right balance to avoid unintended impacts on legitimate businesses.
Preserving Legitimate Economic Activity while Curbing Crime
Thomas noted that “there are legitimate needs for access to cash services, particularly in rural and remote communities. Our shared goal is to target criminal enterprises, not legitimate economic activity.”
AUSTRAC’s approach in administering existing AML/CTF laws is part of a broader strategy coordinated by the Illicit Tobacco and E-cigarette Commissioner. This multipronged strategy aims to shrink the illicit market, reduce criminal activity, and minimize harm to community and public health. A series of multi-agency measures are underway to disrupt the illicit tobacco market across the Australian supply and demand chain.
“Australian banks play a critical role in protecting the financial system from criminal abuse and are well placed to strengthen their AML controls in this high-risk sector. We are focused on disrupting the business models of criminals, making it harder for them to trade and hitting them where it hurts, in their pockets. I’m confident no Australian bank wants this dirty money in their business and will work with us to help shut it out,” Thomas concluded.
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