The Australian Transaction Reports and Analysis Centre (AUSTRAC) is Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) regulator. In addition, AUSTRAC performs the function of Australia’s financial intelligence unit. This duality of functions enables us to most effectively pursue our vision of a financial system free from criminal abuse.
Ensuring our reporting entities comply with the AntiMoney Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) is critical to our ability to produce timely, client-focused intelligence and to support industry in serving as the first line of defence in protecting the financial sector from criminal abuse. We recognise the need for a balance between our ability to fulfil our statutory role and actively contribute to the protection of the Australian community with the need to reduce the impost placed on reporting entities.
AUSTRAC is committed to improving our regulatory frameworks and our approach to regulation in response to the ever-changing environment in which we operate, and to the needs of our regulated community. We recognise the importance of exploring opportunities for improvement and reducing regulatory burden in the way we conduct our business. This report details the activities we have undertaken in the 2018-19 financial year to work with industry and partner agencies in the development and modernisation of our regulatory approach. As a result, we have assessed ourselves as having fully achieved against the six KPIs.
AUSTRAC sought external validation of our self-assessment from stakeholders in November 2019. We invited 15 industry associations and bodies who represent a cross-section of our more than 14,800 reporting entities to undertake a survey in relation to AUSTRAC’s regulatory performance for 2018-19.
The survey provided an avenue for stakeholders to provide feedback and consider whether:
• AUSTRAC’s conclusions in the report were reasonable and objective, and
• the areas identified for further improvement were appropriate or justified.
The majority of the respondents were supportive of AUSTRAC’s self-assessment against the six KPIs. Overall, six bodies responded to the survey, with four providing survey responses indicating that:
• 91.3 per cent of responses strongly agreed or agreed with our self-assessment
• 6.5 per cent neither agreed or disagreed, and
• 2.2 per cent disagreed.
AUSTRAC will continue to proactively engage with industry to minimise the level of regulatory burden imposed and to generate positive outcomes by working together to build a financial system free from criminal abuse.
The Regulator Performance Framework was introduced in 2014 as part of the Australian Government’s ‘Cutting Red Tape’ initiative. The framework was implemented to drive the reduction of unnecessary or inefficient regulatory burden on individuals, business and community organisations. As part of the framework, regulators are required to assess the performance of their efforts to administer regulation fairly, effectively and efficiently. It comprises of six mandatory key performance indicators (KPIs):
KPI 1 Regulators do not unnecessarily impede the efficient operation of regulated entities.
KPI 2 Communication with regulated entities is clear, targeted and effective.
KPI 3 Actions undertaken by regulators are proportionate to the regulatory risk being managed.
KPI 4 Compliance and monitoring approaches are streamlined and coordinated.
KPI 5 Regulators are open and transparent in their dealings with regulated entities.
KPI 6 Regulators actively contribute to the continuous improvement of regulatory frameworks.