AUSTRAC has ordered the appointment of an external auditor to examine ongoing concerns in regard to PayPal Australia’s compliance with the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (the AML/CTF Act).
These concerns relate to PayPal Australia’s compliance with its International Funds Transfer Instruction reporting obligations, which require regulated entities to report the transfer of funds or property to or from Australia.
International Funds Transfer Instructions reported by the financial services sector provide AUSTRAC with vital intelligence that enables AUSTRAC and its partners to combat serious crimes such as child sex exploitation.
AUSTRAC Chief Executive Officer, Nicole Rose PSM said the AML/CTF regime is in place to protect businesses, the financial system and the Australian community from criminal threats.
“Regulated businesses like PayPal Australia, who facilitate payments and transactions for millions of Australian customers every year, play a critical role in helping AUSTRAC and our law enforcement partners stop the movement of money to criminals and terrorists,” Ms Rose said.
“PayPal is an important partner in the fight against crime. However, when we suspect non-compliance AUSTRAC will take action to protect the Australian community.”
The external auditor must report to AUSTRAC within 120 days of being appointed and will examine PayPal Australia’s compliance with its:
- AML/CTF Program obligations
- International Funds Transfer Instruction (IFTI) reporting obligations
- Record keeping obligations.
The outcomes of the audit will assist PayPal with its compliance, but also inform AUSTRAC whether any further regulatory action is required.
“We will continue to work closely with PayPal during this process to address any compliance concerns,” Ms Rose said.
The extent of the auditor’s examination is determined by AUSTRAC and will be at PayPal Australia’s expense.
AUSTRAC’s enforcement powers
AUSTRAC has a range of enforcement powers available, which include:
- issuing infringement notices
- issuing remedial directions, which require a reporting entity to take specified action to ensure compliance
- accepting enforceable undertakings detailing the specific actions a reporting entity will commence or cease in order to comply with the AML/CTF Act
- seeking injunctions and/or civil penalty orders in the Federal Court
- referring a matter to the Commonwealth Director of Public Prosecution for possible criminal prosecution.
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.