The Australian Transaction Reports and Analysis Centre (AUSTRAC) was established under the Cash Transaction Reports Act 1988 as the Cash Transaction Reports Agency (CTRA). The agency's primary responsibilities at that time included collecting and analysing information contained within suspect transaction, significant cash transaction and international currency transfer reports. During that period the agency was instrumental in introducing the '100 point' customer identification check for all new signatories to accounts in Australia.
In 1992 the agency became AUSTRAC, a name change which reflected the broadening of the agency's functions to include the receipt and analysis of wire transfers through international funds transfer instruction reports.
Throughout the 1990s, AUSTRAC operated primarily as Australia's financial intelligence unit (FIU) and was soon recognised as a world leader in combating money laundering through sophisticated and innovative technologies. In particular, the development and improvement of AUSTRAC's automated monitoring systems to screen databases for unusual financial activity patterns enabled the agency to reach its current capacity for receiving and analysing upwards of 69,000 financial transaction reports per day.
However, the events of September 2001 introduced a greater world focus on the importance of counter-terrorism measures and throughout the following years AUSTRAC expanded significantly to meet these new expectations.
Consequently, it was AUSTRAC's work in establishing intelligence agreements with international counterparts and domestic law enforcement agencies through a series of memoranda of understanding (MOUs), which became of primary importance.
The Government announced on 8 December 2003 that a review of the Financial Transaction Reports Act 1988 (formally the CTR Act) would be undertaken. The need for this review was echoed in the 2005 Financial Action Task Force's (FATF) third mutual evaluation of Australia's compliance with international anti-money laundering and counter-terrorism financing (AML/CTF) standards. Following significant government and industry consultation the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) was enacted in late 2006 and AUSTRAC's current responsibilities were determined.
The AML/CTF Act required AUSTRAC to take on the dual role of an AML/CTF regulator and an FIU - a world first. In response to its regulatory responsibilities, in 2007 AUSTRAC launched its internet-based AUSTRAC Online, a system to allow businesses to enrol as reporting entities, receive assistance with their regulatory and reporting obligations and submit an annual AML/CTF compliance report outlining their AML/CTF systems. More than 12,500 Australian reporting entities are now enrolled with AUSTRAC through the system.
On 12 December 2008, the final set of obligations under the first tranche of the AML/CTF reforms came into effect, requiring all Australian reporting entities to report suspicious matters, threshold transactions and international funds transfer instructions, and monitor customers and their transactions on an ongoing basis.
Today, as Australia traverses a period of global economic uncertainty, it is expected that the opportunity for financial crime will increase. The implementation of the first tranche of the AML/CTF Act coupled with AUSTRAC's 20 years of operational experience has Australia well positioned to monitor, detect and protect the integrity and reputation of its financial systems both now and into the future.
