Brokers need not act yet, but uncertainty over obligations remains
Almost three months after the Australian Transaction Reports and Analysis Centre (AUSTRAC) acknowledged that anti-money laundering laws may capture some finance broking activities, the industry is still waiting for an answer.
Finance Brokers Association of Australasia (FBAA) chief executive Leo Gagic said the association had contacted the regulator again. It is seeking clarity on how anti-money laundering and counter-terrorism financing (AML/CTF) legislation applies to finance broking, including commercial asset finance broking. The answer will determine whether brokers take on any obligations under the regime.
No compliance action needed yet, but planning stalls
AUSTRAC has indicated brokers need not act on this specific question yet. In a letter to the FBAA dated 21 July, the regulator said it did not expect businesses to start working towards compliance on the issue until it had published its position.
The letter also acknowledged that affected businesses would need time to prepare if finance broking activities were found to fall within scope. That gives brokers some assurance they will not be expected to comply overnight. AUSTRAC has previously said preparation would include establishing AML/CTF programs and training staff.
Even so, the open question leaves brokers and commercial asset finance specialists unable to plan with confidence. Until AUSTRAC publishes its position, they cannot know whether they will need to build new compliance processes.
Where the uncertainty lies
The FBAA has raised concerns that “debt financing”, under item 4 of table 6, is worded broadly enough to capture broking activities. That provision, which covers assisting in organising, planning, or executing debt or equity financing for a company or legal arrangement, has applied since 1 July, when AML/CTF obligations for table 6 designated services took effect.
AUSTRAC acknowledged the FBAA’s concerns at the time and confirmed it was reviewing the matter. There has been no word since the letter, and the association has asked again where the review stands.
“We remain committed to pursuing this matter to resolution, so members have certainty about any obligations,” Gagic said.
“We know members need a clear answer. We will continue pressing for one and share further advice as soon as it is received.”
