AUSTRAC CEO Brendan Thomas and the Illicit Tobacco and E-cigarette Commissioner (ITEC), Amber Shuhyta, have called on Australia’s banks to take immediate action to strengthen oversight of tobacco and convenience stores with private ATMs and eftpos.

Mr Thomas said non-bank ATMs and point of sales payment technologies are being used to buy illicit tobacco products and to launder the cash proceeds. 

“Any bank receiving funds through these channels is at risk of dealing with illicit proceeds,” Mr Thomas said.

“We are asking banks to assess, mitigate, and, where possible, eliminate these risks. 

“Where banks continue to provide services to tobacconists and convenience stores, they must closely monitor for and report suspicious matters.

He said the request is about refocussing existing AML controls to target a fast-growing criminal trade.

“This is a crime type that is generating billions of dollars in criminal proceeds, and the scale of the activity is undermining Australia’s economic integrity and community safety.”

New figures released overnight by the Australian Criminal Intelligence Commission and Australian Institute of Criminology show the cost of organised crime to Australia reached up to $82.3 billion in 2023-24, including an estimated $4 billion from illicit tobacco alone- a four-fold increase over the past three years.

AUSTRAC has also cautioned banks to be alert to displaced customers as enhanced scrutiny takes effect.

While urging stronger controls, Mr Thomas said banks must strike the right balance to avoid unintended impacts on legitimate businesses.

“There are legitimate needs for access to cash services, particularly in rural and remote communities.”

“Our shared goal is to target criminal enterprises, not legitimate economic activity.”

AUSTRAC’s administration of existing AML/CTF laws is one feature of a broader, multipronged strategy coordinated by the ITEC to shrink the illicit market, reduce criminal activity and minimise harm to community and public health. 

A range of multi-agency measures are underway to disrupt the illicit tobacco market across the Australian supply and demand chain.

“Australian banks play a critical role in protecting the financial system from criminal abuse and are well placed to strengthen their AML controls in this high-risk sector.

“We are focused on disrupting the business models of criminals, making it harder for them to trade and hitting them where it hurts, in their pockets. 

“I’m confident no Australian bank wants this dirty money in their business and will work with us to help shut it out.”