AUSTRAC has ordered the appointment of an external auditor to Afterpay Pty Ltd (Afterpay) to examine its compliance with the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (the AML/CTF Act).
This action has followed a period of ongoing engagement with Afterpay where AUSTRAC has identified concerns with its compliance.
The external auditor will examine Afterpay’s:
- Governance and oversight of decisions related to its AML/CTF framework
- Identification and verification of customers
- Suspicious matter reporting obligations
- AML/CTF program, including the development of its money laundering and terrorism financing risk assessment
AUSTRAC Chief Executive Officer, Nicole Rose PSM said the buy now, pay later sector has experienced rapid growth in recent years and this appointment reminds new financial services businesses that they have obligations under the AML/CTF Act and they must take these seriously.
“The audit will help identify if Afterpay has developed and implemented the systems and controls it needs to ensure it complies with its obligations. These laws are in place to protect businesses, the financial system and the Australian community from criminal threats,” Ms Rose said.
AUSTRAC is committed to educating emerging financial services businesses to assist them to meet their obligations and fight financial crime.
The audit will be used to determine the extent of any compliance issues and whether further regulatory action concerning Afterpay is required.
“AUSTRAC will continue to work with Afterpay to assist the company to mature and strengthen its compliance processes, staff training and suspicious matter reporting,” Ms Rose said.
“But we will not hesitate to take action where an organisation is failing to appropriately protect itself and Australia’s financial system from criminal activity.”
The extent of the auditor’s examination is determined by AUSTRAC and will be at Afterpay’s expense. A preliminary audit report must be provided to AUSTRAC within 60 days.
AUSTRAC uses financial intelligence and regulation to disrupt money laundering, terrorism financing and other serious crime.
AUSTRAC’s dual regulatory and intelligence functions work hand in hand to protect Australia’s financial system.
Serious crime is motivated by profit, and no matter the size, almost all criminal acts leave a financial trail and AUSTRAC has the right tools and expertise to follow these trails.
Our regulatory function ensures we get high quality data and entities comply with their obligations. It requires the financial sector to put in place systems and controls that protect them from criminal abuse, while also reporting on financial transactions and suspicious activity.
This provides AUSTRAC’s intelligence analysts with the information they need to identify risks and develop intelligence products that support law enforcement and national security operations and investigations.