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GRC Professional : GRC Spring 2012
14 GRC Professional • Spring 2012 COVER STORY IT'S THE ERA OF MEGABYTE MONEY -- money in the form of symbols on a computer screen that travel across the world and back again in the blink of an eye, becoming part of an almost impenetrable web of transactions. While technolog y facilitates business without borders, it also has a sinister side, making it quicker and easier for international crime syndicates to launder their ill-gotten gains. Today 'dirty' money is as likely to be found in an offshore trust account as in a briefcase. It's as likely to be switched into financial instruments as exchanged for physical stores of value such as gold andjewellery. In this way financial services businesses around the world are linked -- unknowingly or other wise -- to the multi-billion-dollar global drug trade, to people trafficking and the smuggling of asylum seekers, to illegal arms dealers, political corruption, computer fraud, prostitution rings and even to Somali sea piracy (where ransoms in the tens and even hundreds of millions of dollars are involved). London-based barrister Stephen Platt, principal of Stephen Platt & Associates, says it's important to place money laundering in the context of a chain of events, saying businesses have a responsibility to ensure they're not facilitating the underlying crime in the first place or helping to keep criminals comfortable after wards. Platt, also the founder of the global AML online community KYC360°,is an expert in the regulation of financial crime in and through offshore financial centres, consulting to governments, regulators and financial institutions on money laundering. "We have to recognise that financial services businesses are being used in the first instance to assist criminals to commit those predicated crimes, even before those crimes generate the benefit that is laundered in the traditional sense," he says. "If our focus is just on the traditional form of money laundering we are going to fail to identify the various other ways in which as a sector we are vulnerable to criminal abuse." AUSTRAC leading charge The lead agency in the fight against money laundering in Australia is the Australian Transaction Reports and Analysis Centre (AUSTR AC). The key piece of legislation is the Anti-Money Laundering/Counter-Ter rorism Financing Act 2006 (AML/CTF). The act lists certain business activities (known as designated services) that the regulator wants to know about. These activities fall within the areas of financial services, bullion and gambling, and range from accepting deposits to selling gold or excha nging gambling chips for money. Any business engaged in these activities -- whether casino or convenience store (and in some communities these do provide overseas remittance services) -- must enrol with AUSTRAC. These businesses must establish programs to Whatever way you look at it, sighting acopyofa customer's passport and a couple of utility bills is no longer enough to verify identity. Murky money The crime of money laundering is conservatively estimated to be a $2 trillion global enterprise. BY LESLEY PARKER
GRC Winter 2012
GRC Summer 2013