One of the benefits of the AML/CFT mutual evaluation regime is its reiterative nature – the fact that countries are visited, given a report with suggestions for improvement, and then revisited. Between visits, governments submit progress reports to keep the FATF abreast of any changes they are making. We should not make the mistake of thinking that the aim is perfection, not least because the standard against which the countries are measured are constantly evolving – either the FATF Recommendations themselves, or best international AML practice as expressed in other ways (such as the imminent EU Fourth Money Laundering Directive, or indeed criminal activity.
The latest country to have the results of their AML/CFT evaluation published is Australia, and this report is an excellent example of how the system works best: a country with (in the words of the FATF) “a mature regime for combating money laundering and terrorist financing” is praised for the progress it continues to make, but also warned that “certain key areas remain unaddressed”. Summarising like a Trojan, what they have done right:
- the Aussie authorities have a good understanding of their country’s money laundering and terrorist financing risks
- they gather good financial intelligence and share it efficiently and well – both domestically and internationally
- they are very good at sanctions.
And what they need to improve:
- the number of money laundering prosecutions, as they tend to focus on the predicate crime at the expense of money laundering
- the expansion of the AML/CFT requirements to cover high risk but currently uncovered sectors such as lawyers and estate agents
- their understanding of the risks of money laundering and terrorist financing through charities.
It sounds like something that a rather earnest schoolteacher might say, but I genuinely believe that continuous learning is the best form of education – both for the country concerned and for the rest of us, who can read about what they have done right and what they still need to improve.