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AUSTRAC Deepens Ties with the UK to Tackle International Crime More Effectively

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On February 18, 2023, the Australian Transaction Reports and Analysis Centre (AUSTRAC) announced it had signed a Memorandum of Understanding (MOU) with two British regulators in an effort to further crack down on international financial crime. The agreements were signed by AUSTRAC CEO Nicole Rose along with representatives from the Financial Conduct Authority (FCA) and His Majesty’s Revenue and Customs (HMRC).

“The signing of these two MOUs cements Australia’s long-standing commitment to working with valued partners, like FCA and HMRC, to drive behavioral change and uplift capability across the industry to create a hostile financial environment for organized crime,” said Rose.

AUSTRAC currently has regulatory MOUs with other partners in the United States and Canada. The full list of partnerships can be found here.

Enhanced Information Sharing

AUSTRAC’s agreement with the FCA aims to enhance engagement on regulatory issues, such as improving shared understanding of emerging risks, trends, and the compliance of organizations that operate across both jurisdictions. The MOU also aims to improve the exchange of regulatory information. 

The second MOU with HMRC will similarly strengthen operational collaboration between the British regulator and AUSTRAC, enabling information sharing and potentially leading to joint supervisory activities. Simon York, Director of the Fraud Investigation Service at HMRC, said, “I look forward to continuing to work closely with the Australian government, using this MOU to better understand businesses that work across our two nations and better protecting our countries from serious and organized crime.”

Organized Crime in the UK and Australia

Collaborative working between the UK and Australian law enforcement made headlines in December 2022 when six men were jailed for their involvement in a conspiracy to smuggle almost half a tonne of ecstasy into Australia. According to the Crown Prosecution Service, the drugs had an estimated street value of £44 million.

Using the now-blocked encrypted messaging service Encrochat, the UK-based conspirators arranged the sale and shipment of the drugs to the ultimate purchasers in Australia while the excavator was being auctioned. On the excavator’s arrival in Australia, customs authorities discovered 210 bags of MDMA in the mechanical arm of the machine. As a result, the defendants were sentenced to a combined total of 140 years in prison.

Going forward, these MOUs should help AUSTRAC, HMRC, and the FCA shed more light on financial crime trends and novel techniques to better equip the detection and prevention capabilities of financial institutions.

Key Takeaways

In light of the focus on enhanced information sharing to fight financial crime, firms may consider exploring and assessing their own information sharing protocols to help combat complex modern crimes. Compliance teams looking to enhance their information exchange procedures should consider the Financial Action Task Force’s (FATF) report on Data Protection, Technology, and Private Sector Information Sharing, where it is recommended that firms:

  • Prepare a data protection impact assessment (DPIA) to clearly define the purpose and objectives of the information sharing
  • Engage with applicable data protection and privacy authorities from the beginning of the sharing project
  • Consider safeguards to adequately protect customer data, including privacy-enhancing technology and anonymization where useful

Finally, compliance staff should ensure they are familiar with the supervisory process of the FCA and HMRC, taking note of diverging areas with AUSTRAC as the regulators seek to align and possibly undertake joint actions in the future.

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Originally published 23 February 2023, updated 24 February 2023

Disclaimer: This is for general information only. The information presented does not constitute legal advice. ComplyAdvantage accepts no responsibility for any information contained herein and disclaims and excludes any liability in respect of the contents or for action taken based on this information.

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