Orange Light Flashing on AML Bill

20 April 2006

The Credit Union Industry Association (CUIA) has welcomed a Parliamentary Committee’s finding that some fundamental privacy, consumer and civil rights issues may have been overlooked in proposed new anti money laundering laws.[1]

“Extreme caution is required in proceeding with these new laws,” says CUIA General Manager, Adrian Lovney.

The Senate Legal and Constitutional Legislation Committee “strongly suggests” that a Privacy Impact Assessment be conducted into the draft anti-money laundering and counter terrorism financing (AML/CTF) regime.

“These proposed new laws will authorise the financial sector to pry into the personal affairs of members and customers based on subjective judgments about money laundering and terrorism financing risks,” Mr Lovney said.

“If we don’t get this regime right, industry will bear heavy costs and personal privacy will be eroded without a proportionate impact on money launderers and terrorism financing.

“Under the new AML/CTF regime, the entire financial sector will be deputised to gather information on customers and lodge reports that will then be made available to a wide range of federal, state and territory agencies,” Mr Lovney said.

“We note that the Senate Committee ‘considers that the Exposure Bill should contain a clear objective statement that is reflective of the intention to allow federal, state and territory agencies, including welfare and support agencies, to access and utilise AUSTRAC data for their own purposes – purposes which may not be related in any way to AML or CTF’.

“Credit unions strongly oppose money laundering and terrorism financing, but we need a regime that is reasonable and proportionate to the risk, and recognises that the vast majority of members are not money-launderers or terrorism financiers,” he said.

CUIA supports the Senate Committee’s advice to Government to:

• Utilise the expertise and knowledge of industry bodies to ensure the measures in the final AML/CTF package are truly risk based; and
• Adopt a realistic and workable implementation timeframe.

“Both the CUIA and the Senate Committee have underlined the need for a public awareness campaign by Government once the new AML/CTF regime is finalised,” Mr Lovney said.

“CUIA acknowledges the view that people today are more likely to be tolerant of intrusions into their privacy because of concerns about terrorism, but members will need to be informed that potentially intrusive questioning by their financial institution is required by law.

“For example, you would expect to be asked about your income and source of funds when applying for a loan, but it might come as shock to be asked such questions when making a deposit. This is the kind of change proposed in this package.”

Mr Lovney said the CUIA appreciates the commitment by the Justice Minister, Senator Chris Ellison, to provide industry with a new draft of the Exposure Draft Bill and a full package of draft Rules next month.

For more information or a copy of CUIA’s recent submission to the Attorney-General’s Department and AUSTRAC on the Exposure Draft AML/CTF Bill and Draft Rules, contact:

Luke Lawler
0418 213 025

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