SUBMISSION
Review of the Anti-Money Laundering and
Counter-Terrorism Financing Act 2006
FEBRUARY 2014
Australian Wagering Council
A: Level 12, 95 Pitt Street Sydney NSW 2000
P: +61 2 8079 5204 E: [email protected]
www.australianwageringcouncil.com
SUBMISSION:
REVIEW OF THE ANTI-MONEY
TERRORISM FINANCING ACT 2006
LAUNDERING
AND
COUNTER-
1. INTRODUCTION
The Australian Wagering Council (AWC) is the peak industry body for the Australian online
wagering and sportsbetting industry.
AWC members provide a recreational and social experience for over 2 million Australians
balancing the legitimate right of customers to wager on racing and sporting events with the
provision of effective consumer protection and responsible gambling measures.
The regulated online wagering industry employs more than 1000 Australians, pays in excess
of $100 million in product fees per annum and over $100 million per annum in taxes.
Through policy leadership and advocacy, the AWC provides a united industry approach to
issues that impact the continuing sustainability of the online wagering industry. This includes
taking all appropriate measures to protect vulnerable members of the community by
ensuring high standards of probity, integrity and social responsibility from its members.
The following independently operating companies in Australia are members of the AWC:
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Betfair
bet365
Betchoice (operating as Unibet)
Eskander’s Betstar
Ladbrokes.com.au
Sportsbet (including its subsidiary IASbet.com)
Sportingbet Group Australia (which includes Sportingbet, Centrebet and Tom
Waterhouse.com)
This submission does not provide answers to all questions that have been raised in the
Issues Paper but focuses on those areas that are of immediate concern to the online
wagering and sportsbetting industry.
The members of the AWC are committed to supporting the AML/CTF Regime. To ensure
that our members comply with the requirements of the regime, they provide support
appropriate support at a major cost to their business. With regard to the Act's Objects, it is
important that the Objects be broadened to recognize and, to the extent consistent with
other objectives, allow efficient conduct of business and customer sovereignty and privacy.
It should be acknowledged that the FATF 40 Recommendations do not actually extend to
wagering operators, only to casinos in the gambling sphere. Therefore the AML/CTF Act
already extends beyond what is required under the FATF 40 Recommendations in this
regard. While the AWC remains supportive of this extended reach of the Anti-Money
Laundering/Counter-Terrorism Financing (AML/CTF) legislation, the AWC believes that this
fact should be emphasized in any discussions with FATF during the review process.
2. THE AML/CTF REGIME – A RISK-BASED APPROACH
The AWC supports the current AML/CTF legislation because it is important that Australia has
a robust and rigorous anti-money laundering and counter terrorism financing regime in
AUSTRALIAN WAGERING COUNCIL SUBMISSION: REVIEW OF THE ANTI-MONEY LAUNDERING
AND COUNTER-TERRORISM FINANCING ACT 2006
place. The AWC appreciates the need for Australia’s regime to be one that supports global
efforts to combat AML/TF activity as well.
While the AWC recognises the need for the Australian regime to be able to keep pace with
international trends and developments and while the legislation was introduced to
strengthen Australia’s capacity to “deter, detect and combat serious and organised crime,
money laundering and terrorism financing,” the key feature of the Australian regime is its
risk-based approach.
The AWC supports the risk-based approach to regulation that underpins the legislation. It
must remain risk -based and not prescriptive. The issue paper rightly points out that “the
reporting entity is in the best position to assess the risks it faces in relation to customers,
products and services, and provides the flexibility to allocate appropriate resources to
counter those risks.”
The AWC is of the view that the introduction of industry-based guidance notes has been
particularly effective and provides appropriate information where certainty and clarity may be
needed. The production and utilisation of these guidance notes as well as the development
of typology reports negates any need for a more prescriptive approach to the regulatory
regime.
The AWC is of the view that there should be a mechanism introduced so that reporting
entities can obtain AUSTRAC endorsement for program design choices and other
operational judgements made, if sought, so that reporting entities can have more certainty in
implementing business processes.
The AWC recommends that the risk-based approach should remain the cornerstone of the
AML/CTF Act. This is entirely appropriate given the range and size of reporting entities that
are subject to the AML/CTF regime and recognises that a one-size-fits-all approach to
regulation is not achievable or necessarily effective.
The AWC also recommends that there should be a mechanism for reporting entities to get
AUSTRAC endorsement of program design choices and other operational judgements made,
if sought, so that reporting entities can have more certainty in implementing business
processes.
3. MODIFICATIONS AND EXEMPTIONS
The AWC has welcomed rules that have provided specific relief for certain industries
regarding customer verification and identification. These exemptions have been welcomed
and clearly support a reduction in the initial regulatory burden associated with verifying the
identity of new customers and have also supported commercial imperatives associated with
online gambling services (Rule 10.4). This flexibility is a clear demonstration of the strength
of the risk-based approach and a demonstration of how well the current regime works.
Current Chapter 10 provisions allowing customer identification processes up to 90 days after
an account has been opened is critical to business viability and should be unaltered.
The AWC recommends that Rule 10.4.2 should be amended to remove the need for
customer identification within 90 days or at all if a customer wishes to close an
account and withdraw the credit balance where that credit balance is $1,000 or less.
The reasons for this recommendation are as follows:
− It will reduce red tape in dealing with new customers who do not persist as customers;
and
− It will reduce administrative costs, which are high relative to the profit made (if any) on a
short-term customer. Such a customer would be a low ML/TF risk.
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AUSTRALIAN WAGERING COUNCIL SUBMISSION: REVIEW OF THE ANTI-MONEY LAUNDERING
AND COUNTER-TERRORISM FINANCING ACT 2006
The AWC recommends that a new Rule should be made under Sections 30 and 31 of
the Act (low-risk simplified customer identification) to remove customer ID and
verification requirements where customer funds come from a debit or credit card with
the exact name match with the account name and the daily maximum bet limit is
$10,000 or less.
The reasons for this recommendation are as follows:
− The card issuer will have done the appropriate customer identification and verification
procedures and the payment process can ensure that the wagering customer is the
same person.
− Bets of $10,000 or less, particularly in these circumstances are a relatively low ML/TF
risk in an online environment.
− Such a change will substantially increase the ease of new account opening and go
closer to competitive neutrality with offshore wagering operators thus keeping more
funds within the overview of AUSTRAC onshore.
4. MINIMISING REGULATORY BURDEN ON REPORTING ENTITIES
Pursuant to Section 45 of the legislation, the requirement to register on the Remittance
Sector Register is of marginal intelligence value if a reporting entity receives occasional
requests (low volume) requests from customers to remit funds offshore, and the reporting
entity submits international funds transfers via one of the major Australian banks, these
reporting entities also being required to submit an IFTI report for the same transaction. This
has led to unnecessary duplication.
The AWC recommends that:
A. The strict interpretation for a reporting entity to register on the Remittance
Sector Register if the reporting entity receives less than a nominated threshold
requests per annum be waived. Australian licensed online wagering and
sportsbetting operators should be added along with casinos to the new
Chapter 69 of the AML/CTF rules as entities exempt from the need to register
as remittance providers.
B. The Act should be clarified to the effect that online wagering and sportsbetting
operators do not need to lodge IFTI reports. The AML/CTF Rules could be
amended to compel reporting entities to ensure full originator information is
included in IFTIs. Alternatively the Rules should be changed so that if a
reporting entity submits an IFTI on behalf of a customer, the Rules should
require that the original customer details be provided in the IFTI.
Paragraph 1.2.1 of the AML/CTF Rules instrument 2007(No.1) (AML/CTF Rules) contains a
definition of “certified copy” which sets out a list of persons who may certifiy a document as
a true copy of an original.
The AWC recommends that the Rules should be amended to include the overseas
equivalent to the list of persons who may certify a document as a true copy of an
original.
The reason for this recommendation is that “List of Persons” does not have any overseas
equivalent, which makes it difficult to verify potential clients who are outside of Australia (e.g.
expatriate Australians living overseas).
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