contraventions of s 81(1) of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth)
whether respondents provided designated services to customers without compliant program to manage risk of money laundering and terrorism financing
whether ‘purpose’ in s 85(2)(a) requires objective inquiry into whether program is, by its design, capable of identifying, mitigating and managing risk of money laundering or terrorism financing
Quick Take
1'Purpose' in s 85(2)(a) of the AML/CTF Act bears its ordinary meaning: the end sought to be achieved by the Part A program, assessed by reference to the program document. It does not ask whether the program is, by its design, objectively capable of identifying, mitigating and managing ML/TF risk. Deficiencies in effectiveness fall to be addressed through s 85(2)(c) and the AML/CTF Rules, although a manifestly inadequate or formulaic risk assessment process may support an inference that the program lacks the requisite purpose.
2Section 36(1) imposes an obligation to monitor customers, so contraventions are counted per customer failed to be monitored, not per designated service provided. A common systemic cause, such as channel-level failures in risk assessment and transaction monitoring, does not of itself make the failures a single course of conduct, though the common cause may be taken into account in fixing penalty.
3In fixing an AML/CTF civil penalty:
- capacity to pay is relevant to deterrence but is not a cap;
- an asserted inability to pay will not readily discount the penalty, particularly without evidence of available funding;
- prior agreed penalties (such as Crown) provide little or no guidance;
- overlapping State regulatory penalties, licence suspension and enforced remediation may reduce the penalty needed for both specific and general deterrence.
A deliberate circumvention of foreign capital controls is not, without more, a deliberate contravention of the AML/CTF Act.
