Communication of AUSTRAC information to a foreign country

Contents


Introduction

This policy sets out those matters which the AUSTRAC Chief Executive Officer (AUSTRAC CEO) will take into account when considering the communication of AUSTRAC information to a foreign government.

The AUSTRAC CEO must act in accordance with the provisions of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act). Section 132 of that Act provides that the AUSTRAC CEO may communicate AUSTRAC information to a foreign government if he or she is satisfied that:

  • the foreign government has given the undertakings set out in paragraph 132(1)(a); and
  • in all the circumstances of the case, it is appropriate to do so.

In broad terms, it is the practice of the AUSTRAC CEO to communicate AUSTRAC information under section 132 in the following circumstances:

  1. To financial intelligence units (FIUs) of foreign governments for the purpose of combating money laundering and terrorism financing - It is AUSTRAC policy that priority is given to foreign governments which are members of the Egmont Group of Financial Intelligence Units (the Egmont Group).
  2. To regulatory agencies of foreign governments for the purposes of improving and enhancing AML/CTF regulatory and compliance strategies. These information exchanges also assist AUSTRAC in developing and fostering relations with other regulators for the purposes of promoting regulatory best practice.

Back to the top


Background

A foreign government may request AUSTRAC information from, or spontaneously disseminate information to, the AUSTRAC CEO. Conversely, the AUSTRAC CEO may request information from, or spontaneously disseminate AUSTRAC information to, a foreign government.

AUSTRAC's knowledge of its FIU and regulatory counterparts is comprehensive and is developed through its membership of FATF and the Egmont Group and other bilateral and multilateral interactions.

This policy establishes a framework to guide the AUSTRAC CEO when assessing requests from a foreign government for AUSTRAC information.

Back to the top


AUSTRAC information

Section 5 of the AML/CTF Act defines 'AUSTRAC information' as follows:

  • AUSTRAC information means:

  • eligible collected information; or
  • a compilation by the AUSTRAC CEO of eligible collected information; or
  • an analysis by the AUSTRAC CEO of eligible collected information.

The term AUSTRAC information is primarily used in Part 11 - Secrecy and Access of the AML/CTF Act. It includes not only information received by the AUSTRAC CEO under the AML/CTF Act or any other Commonwealth, State or Territory law, but also AUSTRAC's compilation and analysis of any information received. Public information or information from public sources received by the AUSTRAC CEO does not become subject to secrecy, but rather, the analysis by AUSTRAC of such information is subject to secrecy.

  • eligible collected information means:
  • information obtained by the AUSTRAC CEO under:
    • this Act; or
    • any other law of the Commonwealth; or
    • a law of a State or Territory; or
  • information obtained by the AUSTRAC CEO from a government body; or
  • information obtained by an authorised officer under Part 13, 14 or 15;
    and includes FTR information (within the meaning of the Financial Transaction Reports Act 1988).

The term 'eligible collected information' means information obtained by the AUSTRAC CEO under the AML/CTF Act or any other Commonwealth, State or Territory law or from a government body. It also includes information obtained by AUSTRAC under Part 13, 14 or 15 of the AML/CTF Act. Examples of the latter types of information include information obtained during inspections of premises by authorised AUSTRAC officers, from external audit reports of reporting entities' ML/TF risks which are submitted to AUSTRAC and information obtained by police or customs officers under the enforcement provisions of the AML/CTF Act.

Back to the top


Undertakings by foreign governments and Information Exchange Instruments

In deciding whether to authorise a disclosure, the AUSTRAC CEO will be guided by his/her functions as detailed in section 212 of the AML/CTF Act and the general objects of the Act.

The objects of the AML/CTF Act are stated in subsection 3(1), and include:

  • to fulfil Australia's international obligations, including:
    • Australia's international obligations to combat money laundering; and
    • Australia's international obligations to combat financing of terrorism; and
  • to address matters of international concern, including:
    • the need to combat money laundering; and
    • the need to combat financing of terrorism, and
  • by addressing those matters of international concern, to affect beneficially Australia's relations with:
    • foreign countries; and
    • international organisations.

The functions of the AUSTRAC CEO as set out in section 212(1) of the AML/CTF Act include:

  • to retain, compile, analyse and disseminate eligible collected information; and
  • to provide advice and assistance, in relation to AUSTRAC information, to the persons and agencies who are entitled or authorised to access AUSTRAC information under Part 11.

Section 212(3) requires the AUSTRAC CEO to have regard to the following matters in performing his functions:

  • the integrity of the financial system;
  • crime reduction;
  • the desirability of ensuring that regulatory considerations are addressed in a way that does not impose unnecessary financial and administrative burdens on reporting entities;
  • the desirability of adopting a risk based approach;
  • competitive neutrality;
  • competition;
  • economic efficiency;
  • privacy;
  • such other matters (if any) as the AUSTRAC CEO considers relevant.

Section 132 of the AML/CTF Act does not specify the foreign governments to which the AUSTRAC CEO may disclose AUSTRAC information.. The AUSTRAC CEO will only make a disclosure of AUSTRAC information where the undertakings required under section 132(1) have been given in writing by an appropriate official of the relevant foreign government.

These undertakings are set out in the AUSTRAC information exchange instruments and address the following:

  • confidentiality of information;
  • controlling the use of the information; and
  • ensuring that the information will be used only for the purposes for which it is communicated.

An information exchange instrument may take various forms, such as a memorandum of understanding or an exchange of letters. An information exchange instrument may also contain obligations imposed by AUSTRAC in addition to those prescribed by subsection 132(1). These additional obligations may cover such matters as security, integrity, privacy and protocols for communicating AUSTRAC information. Information exchange instruments are entered into in good faith and are not legally binding.

AUSTRAC applies the same due diligence processes for information exchange instruments whether they relate to foreign FIUs, regulatory agencies or other government bodies. These information exchange instruments are negotiated in accordance with the procedures developed by AUSTRAC.

AUSTRAC enters into a separate information exchange instrument with each foreign government agency which seeks access to AUSTRAC information. By way of an example, where a foreign government's AML/CTF regulator and FIU are separate bodies, each of these agencies must enter into an exchange instrument in their own right.

Requests by foreign FIUs on behalf of another agency from the same country

From time-to-time, AUSTRAC is requested by a foreign FIU to communicate AUSTRAC information for the purposes of releasing it to another foreign agency from the same country (for example, a law enforcement or national security agency) which is not a party, in its own right, to an information exchange instruments with AUSTRAC.

In such cases, AUSTRAC information is communicated in the first instance to the requesting FIU. A subsequent disclosure from that FIU to another agency can only take place in accordance with conditions imposed by the AUSTRAC CEO.

The conditions that may be imposed by the AUSTRAC CEO include the requirement to:

  • protect the confidentiality of the information;
  • control the use of the information;
  • not communicate the information to another agency without the prior written approval of AUSTRAC;
  • use the information for intelligence purposes only; and
  • not use the information as evidence in any formal proceedings.

Requests where no information exchange instrument is in place

The AUSTRAC CEO cannot communicate AUSTRAC information to a foreign government unless he/she is satisfied that the undertakings required in subsection 132(1) have been provided. It is AUSTRAC's preferred position that an information exchange instrument has been entered into prior to consideration of any requests for AUSTRAC information.

On occasion, the AUSTRAC CEO may receive an urgent request for AUSTRAC information in circumstances where no information exchange instrument is in place. Depending on the nature and urgency of such a request, it is referred to AUSTRAC's internal governance committees or an Executive General Manager for the purposes of assessment and making a recommendation to the AUSTRAC CEO about the request.

Before providing information in response to an urgent request, an appropriate official of the foreign government must provide, in writing on behalf of that government, the undertakings prescribed at subsection 132(1).

Back to the top


The circumstances in which AUSTRAC information may be disclosed to a foreign government

The circumstances in which the AUSTRAC CEO will consider disclosing AUSTRAC information to a foreign government are as follows:

  • in response to a request for the purposes of intelligence gathering, an investigation or proposed investigation of offences or alleged offences involving money laundering, terrorism financing or other serious criminal activities; or
  • in response to a request for regulatory and compliance purposes, for example, where a reporting entity operates in another or multiple AML/CTF jurisdictions and it is being assessed or investigated for compliance and reporting breaches in another country, or an AML/CTF regulator in a foreign country is seeking information on supervisory strategies; or
  • a spontaneous disclosure by the AUSTRAC CEO where the information may be of assistance to a foreign government in relation to money laundering, terrorist financing risks or other serious criminal matters; or
  • AUSTRAC is asked by a foreign government to provide additional information in support of a request which AUSTRAC itself has made to that foreign government.

Back to the top


Information to be included in a request for AUSTRAC information

Information to be provided in support of a request by a foreign government for AUSTRAC information must include the following:

  • details of the agency which is making the request, together with details of the foreign official who has authorised the request being made;
  • a statement that the agency understands and accepts the conditions which must be satisfied before the AUSTRAC CEO can provide the requested information; and
  • a statement of the purpose and intended use of the AUSTRAC information. In this context, it would be expected that:
    • in the case of a request for FIU purposes, the request demonstrates a connection to the FIU's intelligence gathering powers, or an investigation or proposed investigation of money laundering, terrorism financing or other serious criminal activities; or
    • in the case of a request for AML/CTF regulatory purposes, the request identifies the following, where appropriate:
      • the name of the business entity or entities, the registered or actual address of the entity, and any other supporting information; and / or
      • a summary of the relevant regulatory and compliance matter, including for example, details of regulatory breaches or an explanation of the alleged misconduct or non-compliant activities; or
      • the broader issues of interest including strategies and approaches to strengthen and secure compliance outcomes and supervisory strategies.
  • specific details of the AUSTRAC information sought; and
  • any other relevant information which may assist the AUSTRAC CEO in his/her deliberations.

If the requesting foreign government agency is an Egmont Member, requests should be forwarded through the Egmont Secure Web; otherwise requests should be made in writing to the AUSTRAC CEO.

Back to the top


 Matters to be taken into account by the CEO when considering a request

Set out below is a non-exhaustive list of questions which the AUSTRAC CEO may have regard to when considering a request for AUSTRAC information:

  • Is the request consistent with the information exchange instrument?
  • Does the request contain details of the intended use of the AUSTRAC information?
  • Has AUSTRAC been given sufficient information to accurately identify the requested information?
  • Are there adequate details of the foreign government agency making the request?
  • Has there been previous compliance by the requesting party with the provisions of the information exchange instrument?
  • Is there anything contained in the request which may contravene or conflict with any Australian government policies?
  • Does the request seek information concerning a person or a third party whose privacy may be compromised if the information is released?
  • Could provision of the requested information have an adverse impact on Australia's interests or that of an Australian business or individual?

AUSTRAC CEO may seek further information

If necessary, the AUSTRAC CEO will request further information to assist in his or her determination of a request.

Back to the top


 Grounds for refusing a request for AUSTRAC information

The AUSTRAC CEO may refuse a request for AUSTRAC information from a foreign government and the grounds for such refusal may include the following:

  • the requesting agency has not given sufficient undertakings to maintain the confidentiality of the information, to control the use of the information and/or to ensure the information will only be used for the purposes expressed in the request;
  • the request is outside the parameters of the information exchange agreement;
  • the request does not sufficiently relate to the investigation of money laundering, terrorism financing or related serious criminal activities;
  • the request may contravene or conflict with Australian government policies, for example in relation to discrimination on the basis of gender, sexual orientation, race or religion;
  • release of the information may prejudice Australia's security or national interests;
  • release of the information may breach privacy and related issues; and
  • release of the information may have an adverse impact on the interests of an Australian business or individual.

Back to the top


 Spontaneous disclosures of AUSTRAC information

A spontaneous disclosure may arise where AUSTRAC information is identified by the AUSTRAC CEO as being of potential assistance to a foreign government in relation to money laundering, terrorist financing risks or other serious criminal matters. A spontaneous disclosure allows the AUSTRAC CEO to release the AUSTRAC information under certain circumstances in the absence of a formal request from the foreign government.

The circumstances for a spontaneous disclosure may arise because of the involvement of a particular country or foreign national in a transaction, or where it is already known that the subject of AUSTRAC information is a person or persons of interest to an FIU or a regulator.

For example, these circumstances may arise where a Suspicious Matter Report (SMR) is received by AUSTRAC that clearly identifies a person who is not a resident of Australia but may be involved in the conduct of illicit transaction activities. Once AUSTRAC has confirmed that no Australian law enforcement investigation can be compromised, the AUSTRAC CEO may decide to spontaneously disclose the SMR to the country of which the individual is a resident, subject to AUSTRAC having executed an information exchange instrument with the relevant agency in the foreign country.

Alternatively, an Australian law enforcement agency may be conducting an investigation in cooperation with its counterpart(s) in a foreign country. If AUSTRAC has entered into an information exchange instrument with that foreign country, the Australian law enforcement agency can request AUSTRAC to release AUSTRAC information directly relevant to the investigation.

Prior to agreeing to the release of AUSTRAC information, the AUSTRAC CEO will assess whether the proposed disclosure is sufficiently related to:

  • the investigation of money laundering, terrorism financing or related serious criminal activities; or
  • the identification of serious breaches or alleged serious breaches relating to the compliance and regulatory obligations of a reporting entity that is a resident or has a legal presence in a foreign country; or
  • whether the subject of the AUSTRAC information has previously been identified as being of relevance to the investigation of money laundering, terrorism financing or related serious criminal activities or breaches of the AML/CTF Act;
  • the alleged nature of the activity or behaviour.

Back to the top


 Requests and disclosure on behalf of an Australian designated agency

The AUSTRAC CEO may, on behalf of an agency designated under the AML/CTF Act, request a foreign government to provide specified information.

In making such requests, the AUSTRAC CEO will consider whether the request:

  • is in accordance with the terms and conditions of the Memorandum of Understanding between AUSTRAC and the designated agency;
  • contains sufficient information to enable the foreign government to act on the request expeditiously and efficiently; and
  • is consistent with the information exchange instrument with the relevant foreign government agency.

AUSTRAC may also communicate AUSTRAC information to a foreign government at the request of a designated agency. In determining such a request the AUSTRAC CEO will consider:

  • whether the request is consistent with the terms and conditions of the Memorandum of Understanding between AUSTRAC and the relevant designated agency; and
  • whether the proposed disclosure is sufficiently related to:
    • the investigation of money laundering, terrorism financing or related serious criminal activities; or
    • the identification of serious breaches or alleged serious breaches relating to the compliance and regulatory obligations of a reporting entity that is a resident or has a legal presence in a foreign country; or
    • whether the subject of the AUSTRAC information has previously been identified as being of relevance to the investigation of money laundering, terrorism financing or related serious criminal activities or breaches of the AML/CTF Act;
    • the alleged nature of the activity or behaviour.

A designated agency is a term used in Part 11 - Secrecy and Access of the AML/CTF Act and deals with access by agencies to AUSTRAC information. The definition of a designated agency at section 5 prescribes various Federal, State and Territory agencies which are permitted access to AUSTRAC information in accordance with Part 11 of the AML/CTF Act.

Back to the top


 Privacy and the disclosure of personal information

In accordance with Australian privacy laws and AUSTRAC policy, the AUSTRAC CEO will not communicate AUSTRAC information which contains personal information unless:

  • the information is already published or can be accessed from public record sources, for example, it has been published in the media or can be obtained from a publicly accessible data base; or
  • there is a specific request for personal information and the AUSTRAC CEO is satisfied that there is sufficient nexus between the request and the intended use of that information.

Where a request is received from a foreign government which seeks personal information, the AUSTRAC CEO will consider:

  • how the personal information may assist or benefit in intelligence gathering or an investigation or proposed investigation of offences or alleged offences involving money laundering, terrorism financing or other serious criminal activities;
  • how the foreign government proposes that such personal information will be used, secured and stored; and
  • whether the AUSTRAC information requested contains reference to a third party who is ancillary or incidental to any request. As a general principle the AUSTRAC CEO will not disclose personal information relating to a third party who is ancillary or incidental to any request unless, for example, there is a serious threat relating to that individual which may warrant making the disclosure.

Back to the top


 Expectations

AUSTRAC will:

  • assess requests from foreign governments in a consistent manner using the criteria outlined in this policy, and in accordance with the AML/CTF Act, other relevant legislation, Australian Government policy and AUSTRAC's standard operating procedures;
  • notify the requesting foreign government of any deficiencies in a request in a timely manner;
  • when making a request for information from a foreign government, disclose such details as it can to enable the foreign government to assess the request; and
  • conduct all communications making a disclosure of information either via the Egmont Secure Web (if applicable), or through other means as agreed to by the AUSTRAC CEO.

AUSTRAC expects that a foreign government seeking AUSTRAC information will:

  • provide sufficient information to enable the request to be assessed in accordance with this policy;
  • provide any additional information as is requested; and
  • conduct all communications making a disclosure of information either via the Egmont Secure Web (if applicable), or through other means as agreed to by the AUSTRAC CEO.

Back to the top