What Is Money Laundering in Australia?
Money laundering is the term given to the process of disguising or hiding the proceeds of illegal activities as legitimate money. The process aims to make illegally obtained funds appear legal and legitimate, and therefore can be used without arousing any suspicion. In Australia, money laundering is a criminal offence under the Commonwealth Criminal Code Act 1995 and is punishable by full time imprisonment and/or fines.
Money Laundering Offence NSW
Money laundering is dealt with by the Crimes Act 1900 (NSW). A person may be liable under this legislation could face a full-time imprisonment for 20 years. The prosecution must prove beyond reasonable doubt that the person:
- Dealt with the proceeds crime, and
- Knew that they were proceeds of crime, and
- Deliberately tried to conceal that the funds were proceeds of crime.
However, if someone has handled money obtained illegally, but has not tried to hide it, they can be subjected to a maximum of 15 years punishment. If they are unaware of the source of the funds, the maximum penalty is reduced to 10 years.
The Crimes Act also has other offences that it covers, such as handling goods that are believed to be from criminal activity (section 193C) and dealing with goods that are later used in a criminal act (section 193D). Punishment for these offences can be up to fifteen years in prison.
Money Laundering Offence Commonwealth
Commonwealth money laundering offences are covered by the Criminal Code Act 1995 (Cth).
- The money or property is, and the person believes it to be, proceeds of crime, or
- The person intends that the money or property will become an instrument of crime.
The punishments for the most severe offences can be either a prison sentence of 25 years or a financial penalty of 1500 penalty units (equivalent to $333,000), or both; while the least serious infractions can be punished by a fine of 10 penalty units.
How Does Money Laundering Work?
The process of money laundering typically involves three stages: placement, layering, and integration.
Placement: This is the first stage of money laundering, where the illegal funds are introduced into the financial system. This can be done in a variety of ways, including the use of cash deposits into bank accounts, the purchase of high-value assets such as real estate or art, or by making investments in legitimate businesses.
Layering: In this stage, the illegal funds are separated from their original source and moved through a series of transactions to further hide their illegal origin. This can involve transferring funds between bank accounts, investing in offshore companies, or using exchange houses to convert funds into different currencies.
Integration: The final stage of money laundering is the integration of the funds back into the legitimate financial system. This is where the laundered funds are used to purchase assets or investments, or to pay for goods and services, giving the impression that the funds are legitimate.
Examples of Money Laundering
Illegal money is often hidden, disguised or made to look legal in order to be used in criminal activity. This process usually takes place in three steps: getting the income from crime into financial institutions, hiding it away from its source to avoid being exposed and finally, making these funds seem legitimate by introducing them back into society. Examples of money laundering are;
- Depositing large amounts of cash over a period of time, under the reporting threshold;
- Using a company to deposit cash from illegitimate sources; and
- Transactions in a casino which are designed to shift the cash.
Defences to a Charge of Money Laundering
There are a number of legal defences that an accused person can rely upon for the charge of money laundering in NSW, they are;
- That they were unaware that the money was the proceeds of crime;
- That they did not receive, possess, conceal or dispose of the property;
- That the property did not originate from a crime and is legitimate; and
- That they were acting under duress.
Are Casino Required to Prevent Money Laundering?
Yes, casinos in Australia are required to implement anti-money laundering measures to prevent the use of their facilities for illegal activities. This includes the implementation of customer due diligence procedures, reporting of suspicious transactions, and the development and implementation of internal anti-money laundering policies and procedures.
Under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006, casinos are considered “designated services” and are required to be registered with AUSTRAC, the Australian Transaction Reports and Analysis Centre. AUSTRAC is the primary agency responsible for the implementation and enforcement of anti-money laundering and counter-terrorism financing measures in Australia.
Casinos are also required to implement customer due diligence procedures, including the verification of customer identities and the ongoing monitoring of customer transactions. This helps to prevent the use of casinos for money laundering activities by ensuring that customers are who they claim to be, and that their transactions are legitimate.
In addition to customer due diligence, casinos must also report suspicious transactions to AUSTRAC. This includes transactions that are unusual, large, or appear to be structured to avoid reporting requirements. By reporting suspicious transactions, casinos can help to detect and prevent money laundering activities and ensure that their facilities are not used for illegal purposes.
Accordingly, money laundering is a serious criminal offence in Australia and the use of casinos for money laundering activities is prohibited. Casinos are required to implement anti-money laundering measures, including customer due diligence procedures and the reporting of suspicious transactions, to prevent their facilities from being used for illegal purposes. These measures help to maintain the integrity of the financial system and ensure that casinos are not used to launder illegal funds.
Anti-Money Laundering and Counter Terrorism Financing Act
In Australia, anti-money laundering policies and laws are in place to help identify and prevent the use of illegally gained money. This is done by requiring certain financial organisations to adhere to the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act). Those offering specific services, such as financial institutions, bullion dealers, digital currency exchanges, the gambling industry, and remittance providers, must abide by the regulations of the AML/CTF Act and meet the obligations as “reporting entities”.
- Enrol with AUSTRAC, Australia’s AML/CTF regulatory body.
- Ensure customer identification, verification, ongoing due diligence and transaction monitoring.
- Report suspicious matters, threshold transactions and international funds transfers.
- Money laundering and terrorism financing risk assessments.
- Conduct AML/CTF training for employees.
- Develop and maintain an AML/CTF program.
- Create and retain records for seven years.
If you have been charged with a money laundering offence, a financial crime or participating in criminal enterprises for money laundering, contact our team of fraud lawyers in Sydney immediately.
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