The prevention and management of financial crime is a fundamental responsibility of superannuation trustees, to safeguard members entitlements and assist the Federal Government agency AUSTRAC (Australian Transactions and Analysis Centre) with the detection and management of money laundering and terrorism financing.

The National Financial Crime Discussion group meets 4 times per year and organised by the Association of Superannuation Funds of Australia (ASFA). Joe Strati and I recently attended the first meeting for 2020. Due to the new social distancing measures to prevent coronavirus, attendees were given the opportunity to attend this meeting online.

Over the last few years, Joe and I have been helping the NAB (National Australia Bank) with their financial crime management program. The discussion group provides industry participants the opportunity to discuss all things financial crime, and includes expert speakers from the industry.

The group highlighted that two of Australia’s big banks have recently had potential contraventions of the Anti-Money Laundering and Counter-Terrorism Financing Act (AML/CTF Act). One of the issues involved the international transfer of money that was used for child slavery – a significant issue throughout the world and one that we would like to see stopped.

Coronavirus pandemic – compliance with AML/CTF Act

The importance of compliance with the AML/CTF Act cannot be understated. This is going to become even more important with the increased early release of super as a result of the coronavirus pandemic, and associated economic and social uncertainty.

The group noted some key activities that superannuation funds should be doing all the time, not just some of the time.

These include:

· AML/CTF Program should be up to date and relevant;

· Risk Assessments including Control Effectiveness should be updated as processes or circumstances change;

· Enhanced Customer Due Diligence and Ongoing Customer Due Diligence should be aligned;

· Record-Keeping should be in accordance with the law (very easy for AUSTRAC to verify whether this is the case);

· Funds should be aware what to do if they have an issue with AUSTRAC;

· Section 47 compliance report should be considered throughout the year and not just before it is due;

· Board reporting should ensure that the Board is aware of AML/CTF activities within the organistaion and any changes to the AML Program; and

· Board Management Oversight should be a standing agenda item.

The general theme of these recommendations is that documentation is up to date, relevant, considered, and that the Board is aware of the AML/CTF activities and any issues within their organisation.

If you need help understanding financial crime and the compliance standards, and particularly now with the new early release of superannuation, please email IQ Group at:

David Hodges

Senior Consultant