The financial services industry says the Federal Government has gone a long way to arresting fears that any proposed anti-money laundering legislation would heap unfathomable costs on banks, insurance agents, fund managers and financial planners.
The Minister for Justice and Customs, Chris Ellison, held a meeting recently with senior figures of the financial services industry, including the Investment and Financial Services Association (IFSA), the Financial Planning Association and the Australian Bankers’ Association (ABA), to discuss the progress of draft anti-money laundering legislation, which the Government obliged itself to produce after agreeing to adopt international standards in 2003.
Financial services, real estate, gem and precious metal, and casino businesses are all particularly concerned by the Paris-based Financial Action Task Force’s “know your client” recommendation, which requests businesses that routinely take large deposits of money to keep a database of their clients’ personal details.
IFSA welcomed Ellison’s support of the adoption of a “risk-based” approach to handling the issue, so industry sectors where the risk of terrorists attempting to launder money may be lower, such as in the life insurance or superannuation industry, would have their requirements scaled down.
“We say only the industry can identify what those risks are,” said IFSA chief executive Richard Gilbert.
He said the Government was also receptive to its request to let the industry develop its own codes, which would operate under legislation that covers broader issues, rather than forcing the industry to adopt more specific requirements.
“The legislation must recognise that any proposals must be commercially savvy. If we don’t and we impose unreasonable burdens, the terrorists would have won — they would have affected the capital system.”
A spokesperson for the ABA added that the Minister had also shot down concerns that the industry would be forced to identify clients already identified under the Financial Transaction Reports Act (FTRA).
Anyone who opens a bank account is already identified under FTRA legislation.
