While the AML/CTF Act requires reporting entities to have an AML/CTF program, the implementation of compliance systems alone may not necessarily lead to positive risk management or compliance outcomes. To ensure that the programs and systems established within a business are successful, compliance should become part of an organisation's culture. A culture of compliance is one where commitment to achieving risk management and regulatory objectives are embedded at all levels of the organisation and compliance is an inherent and expected behaviour that is considered a value add, rather than be viewed or practiced as a separate activity and considered an unwelcome business cost.

To successfully manage ML/TF risks and comply with regulatory obligations, management needs to recognise that establishing the right culture will be a major responsibility for them, in parallel with monitoring and controlling responsibilities.

How can business benefit from a culture of compliance?

A strong culture of compliance will benefit businesses by improving the management and mitigation of both business and regulatory risks. The positive outcomes of a culture of compliance will result from improved employee performance in identifying and dealing with any unlawful conduct channelled through the organisation. Regulatory risk may be reduced, for example, in the event that AUSTRAC instigates legal proceedings, if the demonstrable existence of a culture of compliance was considered a mitigating factor by the court.

As well as reducing the financial and reputational risks associated with regulatory non-compliance, benefits can extend to such aspects of the business as customer service, employee and customer loyalty and ultimately competitive advantage.

Occupational health & safety management: insights for AML/CTF program management (pdf 53kb)