Australia Proposes Sanctions Screening Requirements
Organizations complying with Australian anti-money laundering and counterterrorism financing rules may soon be required to carry out certain sanctions screening procedures to make sure they’re not violating the country’s sanctions laws.
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The announcement, published June 20 by Australia’s Department of Foreign Affairs and Trade, said the Australian Transaction Reports and Analysis Centre (AUSTRAC) recently proposed requiring the entities it regulates to “develop, maintain and comply with policies to ensure that they do not contravene targeted financial sanctions obligations, including asset freezing, in the provision of their designated services.”
While the Australian Sanctions Office is responsible for implementing the country's sanctions regimes, the foreign affairs ministry said AUSTRAC “plays a crucial role in supervising certain business for implementation of requirements to detect, deter and disrupt financial crime,” including those calling for businesses to submit suspicious transactions.
“As Australia’s anti-money laundering and counter-terrorism financing regulator, AUSTRAC supervises reporting entities’ policies to manage and mitigate money laundering, terrorism financing and proliferation financing risk,” Australia said. “The proposed change is intended to ensure AUSTRAC-regulated reporting entities ... have the necessary measures in place to be able [to] implement targeted financial sanctions, and that the efficacy of those measures is subject to appropriate supervision by AUSTRAC.”
If the draft rules are implemented, it would “constitute a marked shift from the role sanctions policies ordinarily play for reporting entities regulated by” Australia’s laws, law firm Herbert Smith said in a June 16 client alert. “In practice, reporting entities will likely need to consider a number of complex matters when drafting sanctions policies to meet the proposed requirements under the Draft Rules.”