The financial services industry has an important role to play in strengthening Australia’s national security, according to Federal Police Commissioner Mick Keelty.
Speaking at the annual Investment and Financial Services Association (IFSA) conference in Brisbane, Keelty said the sector’s record for reporting activities such as illegal transactions and fraud needed to improve.
With many terrorist activities currently funded through money laundering schemes, Keelty said the financial services sector needed to work with police agencies to prevent illegal activities, by reporting suspicious transactions and enhancing internal due diligence policies.
According to Keelty, many financial institutions have been reluctant to provide fraud intelligence to the authorities for fear of contravening national privacy legislation.
The commissioner’s comments come just two weeks after the Federal Government assured senior representatives of the Australian financial services industry that proposed anti-money laundering legislation would not impose burdensome costs on business.
The Government is expected at an undisclosed date to release a “know your client” provision, which may require banks, funds managers, insurance companies and financial planners among other businesses to keep a data base of client’s personal details — although there have been claims by the Federal Opposition that the proposals have been placed on the back burner until next year.
Keelty also warned organisations that have operations in the USA need to ensure they comply with regulations within the USA’s Patriot Act.
This requires companies to ensure they understand the origin and purpose of any funds they manage on behalf of their customers.
The USA Government has the power to cancel the banking licence of those companies that do not comply with the Act.
The cost of identity crime in Australia is currently around $4 billion, Keelty said, adding that the advent of low cost technologies makes it easier than ever to reproduce documents.
Currently, over $1 trillion is laundered on a global basis.
