AUSTRAC has ordered the appointment of an external auditor to Western Union Financial Services Australia (Western Union) after raising concerns about the money remitter's compliance with the AML/CTF Act.
Among the concerns were core anti-money laundering issues such as poor customer due diligence, delayed or non-reporting of suspicious matters, non-compliant international funds transfer instruction reporting and concerns about whether Western Union's AML/CTF program is functional.
AUSTRAC CEO Brendan Thomas said businesses providing international funds transfers pose a high risk for money laundering.
"The remittance sector is particularly vulnerable to criminal exploitation." Mr Thomas said.
"Western Union has self-disclosed issues with its systems and consistently committed to remedial action however, AUSTRAC is still not satisfied that Western Union is meeting its AML/CTF obligations.
"The recurrence of these issues raises concerns about the effectiveness of Western Union's AML/CTF program and internal processes, which is why we are taking this action.
"It's important that all business's administer their AML/CTF programs properly; if they don't it has a knock on effect that creates gaps in the financial system's defences against criminal misuse.
"Unfortunately criminals are always on the lookout for weaknesses and that's why it is so important to make sure your business has the right defences."
The auditor will provide a report to AUSTRAC with information that will help Western Union better meet its compliance obligations and inform whether further regulatory action is required.
"AUSTRAC will then assess if further regulatory action is appropriate," Mr Thomas said.
"This action should serve as a reminder to the whole remittance sector, whether you are a large multinational operator or a one person business- you are part of the safety net that protects the financial system and the community from serious and organised crime.
"Play your part and lock down your business so that AUSTRAC doesn't have to come on the scene and take action."
