Designated non-financial businesses and professions: The weak link in Australia’s AML/CTF regime

Abstract

Purpose

The purpose of this paper is to highlight vulnerabilities in Australia’s anti-money laundering/counter-terrorism financing (AML/CTF) regime through Australia’s non-compliance with the Financial Action Task Force (FATF) recommendations on the regulation of designated non-financial businesses and professions (DNFBPs). It is intended that through examination of the justifications for and against AML/CTF regulation of DNFBPs, the paper will provide support for the position that Australia’s AML/CTF regime should incorporate regulation of DNFBPs.

Design/methodology/approach

The paper presents findings from research conducted in 2015 that focused on some of the principal arguments for and against the extension of Australia’s AML/CTF regime to DNFBPs. Review and consideration of the merits of these arguments is undertaken to support the conclusion that AML/CTF regulation should be extended to DNFBPs, in line with the FATF recommendations.

Findings

The current exemption of many DNFBPs from AML/CTF regulation perpetuates vulnerabilities within Australia’s AML/CTF regime; until this is addressed, criminals will continue to exploit these vulnerabilities and the regulated AML/CTF sector will continue to shoulder an unfair burden of Australia’s AML/CTF response.

Practical implications

This paper provides an objective assessment of factors for and against the regulation of DNFBPs in Australia. It may be of value to government policymakers, regulators, financial institutions and DNFBPs.

Originality/value

This paper complements existing research on this subject and provides a specific focus on some of the main arguments for and against the extension of Australia’s AML/CTF regime to specific DNFBPs.

Citation

Newbury, M. (2017), "Designated non-financial businesses and professions: The weak link in Australia’s AML/CTF regime", Journal of Money Laundering Control, Vol. 20 No. 3, pp. 247-261. https://doi.org/10.1108/JMLC-08-2016-0038