With Global Assessment Looming, Australia Eyes AML Rules for Jewelers

A legislative proposal now in the works in Australia aims to address the high risk of financial crime that jewelry dealers increasingly pose by bringing them under anti-money laundering requirements, the head of the country’s financial intelligence unit said Monday.

News of the proposal follows the Western Australia Police Force’s seizure of AU$1.7 million of luxury watches from two suspected money launderers in Perth in February, and precedes an evaluation of the country’s laws, regulations and overall efforts against illicit finance by the Financial Action Task Force, also known as FATF, next year.

“We do see the purchase of luxury watches in particular as a means to launder money,” Brendan Thomas, chief executive of the Australian Transaction Reports and Analysis Centre, or Austrac, said during the opening panel of The Assembly Australasia, an ACAMS-hosted conference in Sydney.

Australia is one of only a handful of countries to exclude jewelry dealers, lawyers, accountants, real estate professionals and other “Tranche II” entities, a category more commonly known as designated non-financial businesses and professions, or DNFBPs, from AML and combating-the-financing-of-terrorism requirements contrary to FATF’s recommendations.

Australian authorities intend to address the gap prior to FATF’s next evaluation, Alex Engel, an assistant secretary with the Attorney-General’s Department’s Transnational Crime Branch, told attendees.

“We’re quite conscious that businesses are going to need quite a lengthy period of time to be able to put this in place and actually make it effective,” said Engel. “So, I can tell you that we’re looking for legislation sooner rather than later …  [though] ultimately, it will be up to Parliament and the government.”

The window for commenting on the proposed reforms, which authorities estimate will impact more than 100,000 businesses in Australia, closed Friday.

Australia rated “non-compliant” with FATF’s two technical standards for regulating DNFBPs for AML purposes following the group’s previous evaluation of the country in 2014.

FATF concluded in a follow-up assessment in March of this year that Australia did not do enough over the past 10 years to merit a higher score for either standard, as casinos and bullion dealers remain the only two types of DNFBPs that the country regulates for AML purposes.

Australia’s delays in technical compliance all but promise to drag the country’s efficacy scores downward as well.

“The next round [of evaluations] will concentrate not so much on technical compliance but on effectiveness, [as in]: What are the results?” ACAMS Executive Director Rick McDonell, former executive secretary of FATF, said Monday.


Thomas during his opening remarks also previewed the results of Austrac’s four-year national risk assessment, which the agency plans to release July 9.

Material supporters of terrorism, “a continuing and pervasive threat” in Australia, primarily use retail banking products, remittance services and currency exchanges to move funds, said Thomas, and transact almost exclusively in “small-scale,” low-value amounts.

Still, “when financing does lead to direct terrorist attacks, the levels of impact and harm are visible and almost always extreme,” Thomas said.

The risk assessment, which drew on input from Australian investigators and national security agencies, described the threat that money laundering has posed to their country’s financial system and reputation as “intractable.”

“Our assessments confirm that criminals continue to use traditional channels such as cash, the purchase and exchange of luxury goods, in particular real estate … banks, casinos and remitters to launder funds.”

Thomas called out lax oversight at the board level of financial institutions as a particular concern.

“A key failure that we’ve observed is boards tak[ing] a ‘tick-and-flick’ approach to AML responsibilities and [when] asking their senior executives important questions,” said Thomas, adding that his agency, Austrac, regularly observes financial institutions failing to monitor transactions that involve high-risk customers, services and products.

Thomas also warned reporting entities, chiefly smaller businesses, against farming out their AML function to third-party services providers without supervising the work they conduct on their behalf. “You can outsource part of your program, but you can’t outsource legal liability.”

Austrac counted 17,530 entities and suspicious-activity-reporting obligations during the fiscal year that ended on June 30, 2023, a total that includes banks, money services businesses, casinos. virtual asset service providers and other financial institutions.

Contact Fred Williams at and Chelsea Carrick at

Topics : Anti-money laundering , Counterterrorist Financing
Source: Australia , Australia: AUSTRAC
Document Date: June 17, 2024