Today AUSTRAC released Australia’s first national proliferation financing risk assessment aimed at strengthening domestic and international efforts to combat this serious criminal activity.
Proliferation financing is when a person makes available an asset, provides a financial service or conducts a financial transaction that is intended to facilitate the proliferation of weapons of mass destruction, regardless of whether the activity occurs or is attempted.
This risk assessment brings together knowledge from across government and a wide range of private sector stakeholders to provide a contemporary and consolidated picture of proliferation financing risk, how it is combatted and where efforts can be improved.
The results of this assessment have found that Australia is primarily targeted by state-based or linked procurement networks that wish to exploit a range of sectors to export restricted, sensitive or dual-use goods and knowledge. Procurement networks targeting Australia operate on behalf of Democratic People’s Republic of Korea (DPRK) and Iran, as well as other countries of proliferation concern.
Other significant proliferation financing threats include the use of third-country nationals to facilitate proliferation financing and evade sanctions, and the exploitation of Australian citizens to source and export sensitive technologies and knowledge for use by actors of proliferation concern.
In October 2020, the Financial Action Task Force (FATF) updated Recommendation 1 of its standards on countering financial crime. The revision requires countries to assess and mitigate the risks of potential breach, non-implementation or evasion of Targeted Financial Sanctions (TFS) obligations relating to DPRK and Iran.
AUSTRAC Acting CEO Peter Soros said that AUSTRAC is committed to ensuring the country and its financial system are equipped to detect and prevent proliferation financing.
“Australia counters proliferation financing activity through a comprehensive sanctions regime, and a robust legislative and operational framework, which includes AML/CTF requirements,” he said.
“Businesses must understand the proliferation financing risks they face, refine their transaction monitoring processes and ensure they are aware of their obligations.”
“AUSTRAC offers a range of resources and guidelines for the private sector regarding TFS compliance. This includes supporting the production of TFS guidance for banks, which was recently updated and produced by the Australian Banking Association.”
This risk assessment was developed by AUSTRAC as Australia’s financial intelligence agency. Monitoring of compliance with Australia’s sanctions regime is managed by the Australian Sanctions Office of the Department of Foreign Affairs and Trade (DFAT).
Download the Proliferation financing in Australia national risk assessment (PDF 1.22MB)