Australian Transaction Reports and Analysis Centre

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Australian Transaction Reports and Analysis Centre (AUSTRAC) is an Australian government agency, established in 1989 under the Financial Transaction Reports Act 1988.^[1] Certain classes of financial transactions must be reported to AUSTRAC, in particular bank cash transactions (ie. notes and coins) of $10,000 or more. AUSTRAC passes information on to other government agencies to help them act against tax evasion, organised crime, money laundering, and welfare fraud.

1 Operation
2 Identification
3 Other agencies
4 Enforcement
5 References
6 External links

[edit] Operation

"Cash dealers" must report transactions to AUSTRAC; such dealers include,

Banks and similar financial institutions such as building societies.
Corporations.
Insurance companies and intermediaries.
Securities dealers, such as stock brokers.
Unit trust managers and trustees (but cash management trusts transacting only by cheque or similar are exempt).
Travellers cheque or money order issuers.
Cash carriers and payroll preparation businesses.
Casinos.
Bookmakers, including totaliser agencies.
Bullion dealers.
Solicitors, acting on their own behalf (eg. their trust fund, or originated mortgages).

Transactions which must be reported are,

Currency of $10,000 or more, or foreign currency of that value.
International funds transfer, either into or out of Australia, of any amount.
Suspicious transactions of any kind; being transactions the dealer may reasonably suspect of being part of tax evasion or crime, or might assist in a prosecution.

Members of the public are also obliged to report to AUSTRAC if they carry $10,000 or more (or equivalent in a foreign currency) of cash into or out of Australia, which can be done on forms available from the Australian Customs Service at airports and sea ports. The Customs service attempts to detect evasion of this requirement. Airlines are not held liable for what their passengers carry.

It's an offence under the Act for anyone to split a transaction into two or more parts with a dominant purpose of avoiding the reporting rules and thresholds.

Certain classes of transactions are exempt, or may be exempted on application. For example established customers transacting amounts typical of their lawful business for payroll, or retail or vending machine takings, etc. Motor vehicle traders are specifically not in the retailers exemption, their transactions are not eligible for exemption (likewise boat, farm machinery and aircraft traders).

Under the Freedom of Information Act 1982, any person can access records held by AUSTRAC, subject to certain exemptions.^[2]

[edit] Identification

Cash dealers must identify their customers. Accounts may only be operated by an identified customer, an unidentified customer is blocked. Generally identification can be transferred from one account to another, so that for instance a person once identified does not need to produce documents again when opening a second account at the same institution.

For banks and similar, identification normally takes the form of the "100 points" rule. Various documents each have a points value and a total of 100 must be presented from among certain sets of choices. For example a birth certificate is worth 70 points and a driver's license 40.

It's an offence to open or operate an account with a cash dealer under a false name, punishable by a fine or up to 2 years imprisonment.

[edit] Other agencies

AUSTRAC communicates the information it gathers to a large number of other government agencies, including,

Australian Taxation Office (ATO)
State and territory revenue offices.
Child Support Agency Australia (CSA)
Australian Federal Police (AFP), and which may then communicate information to foreign law enforcement agencies, with appropriate undertakings.
State and territory police services.
Australian Security Intelligence Organisation (ASIO)
Australian Crime Commission
Australian Securities and Investments Commission (ASIC)
Australian Customs Service
Centrelink (added in 2004)
State commissions and royal commissions against corruption,
- Crime and Misconduct Commission of Queensland
- Corruption and Crime Commission of Western Australia (added in 2004)
- Independent Commission Against Corruption (NSW)
- New South Wales Crime Commission
- Police Integrity Commission (NSW)
Foreign countries, with appropriate undertakings.

[edit] Enforcement

One prominent attempted evasion of the AUSTRAC rules took place ahead of the Dutch takeover of TNT (see TNT N.V.) in 1999. Simon Hannes was an executive at Macquarie Bank which was advising TNT, and he bought about $90,000 of TNT call options under the name "Mark Booth" to profit when the bid was announced. He was convicted of insider trading but also of two offences under the Financial Transactions Reports Act since he had made multiple cash withdrawals and deposits each just under the $10,000 threshold, apparently to avoid that reporting. His sentence for those transactions was 4 months jail.^[3]^[4]