Minister for Justice media release: AUSTRAC risk assessment of stored value cards
Australia's first risk assessment of stored value cards (SVCs), such as travel and retail gift cards, has revealed how criminals can exploit these seemingly innocent modern technologies for ill-gotten gains, including money laundering and terror financing.
Minister for Justice Michael Keenan today released the Stored value cards: money laundering and terrorism financing risk assessment report, at AUSTRAC's new Melbourne office official opening.
This is the third risk assessment undertaken by the Government's financial intelligence agency, developed in close partnership with key SVC issuers, industry experts, and partner agencies, following assessments into the financial planning and superannuation sectors.
Minister Keenan said with over 10 million active SVCs worth more than $1.5 billion in Australia alone, this report serves as yet another tool to target and disrupt serious organised crime, including terrorist financing, and identify where preventive measures can be strengthened.
"The report revealed that while SVCs have a 'medium' risk across the sector, they have a 'high' level of vulnerability to criminal exploitation - the highest vulnerability rating to date in AUSTRAC's risk assessments program," Mr Keenan said.
"Internationally, we have seen SVC's used to fund terrorist attacks, including the horrific terrorist attacks in Paris in November 2015."
"In Australia, foreign fighters have used SVCs to fund their terrorist activity before and after departure to the conflict zone, and have been used to facilitate money laundering and cyber enabled fraud.
"A shared understanding of the risks and private sector reporting obligations maximises our ability to detect and disrupt key national security and criminal threats."
AUSTRAC CEO Paul Jevtovic said the specific features of SVCs have a very significant bearing on the level of money laundering and terrorism financing risk posed.
"SVCs that can be loaded, reloaded and redeemed in cash, carry a higher level of risk than SVCs that do not carry these features," Mr Jevtovic said.
"SVCs that can be redeemed internationally, such as pre-paid travel cards, carry greater levels of risk than those that can only be redeemed in Australia.
"I encourage all Australian businesses that issue SVCs to familiarise themselves with this risk assessment to ensure their anti-money laundering and counter-terrorism financing systems and processes are effective to protect themselves and the Australian community from criminal misuse."
The Stored value cards: money laundering and terrorism financing risk assessment report can be found on the AUSTRAC website.