The Financial Intelligence Unit plays an essential role in combating money laundering and terrorist financing. Almost every country today has a Financial Intelligence Unit. Generally, FIU is a unified structure created to receive, evaluate and share financial information. It aims to prevent money laundering and terrorist financing. All financial businesses are obliged to report suspicious activity (SAR) to Financial Intelligence Units.
Australian Transaction Reports and Analysis Center (AUSTRAC) is an Australian Financial Intelligence Unit.
This center, often called AUSTRAC, was established in 1989 to help combat money laundering. Its main focus is on activities such as organized crime, terrorist financing, and money laundering.
AUSTRAC collects information from legal entities and institutions. This collected information is analyzed and determined whether it is related to money laundering, human trafficking, organized crime, or terrorist financing.
As the Financial Intelligence Unit, AUSTRAC shares its findings locally and internationally with the required mass and law enforcement agencies. It is also involved in several national and state task forces that provide expert financial intelligence to national security and serious and organized crime international efforts.
AUSTRAC obtained under the Anti-Money Laundering and Counter-Terrorism Financing Act of 2006. A 2014 statement also said that Terrorist Financing poses a significant threat to Australians and Australians living abroad. AUSTRAC is also a member of the Egmont Group of Financial Intelligence Unit.
Almost all financial institutions in Australia have to report any transaction they identify as suspicious to the government. These reports, known as Suspicious Activity Reports (SAR), are reviewed by AUSTRAC, and suspicious customer accounts are tracked. Various criminal sanctions, exceptionally high fines, are imposed on institutions and organizations that avoid reporting suspicious transactions. In addition to this:
Additionally, both individuals and organizations must comply with such AUSTRAC regulations. If individuals or organizations do not report suspicious transactions or refrain from filling them, AUSTRAC may impose legal penalties on those individuals or entities.
Banks are the primary financial institutions that must comply with AUSTRAC's regulations. But they are not the only ones. Money transfer companies, insurance companies, real estate properties, and casinos must also comply with AUSTRAC obligations.
All these financial institutions have a specific system they must follow when creating an account for a new client. Before the procedures are performed, Businesses should follow KYC protocols and CDD process thoroughly. Besides, they should adopt Risk-based assessments against any suspicious situation. Suspicious activities should be reported immediately, and the customer account should be monitored.
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