AUSTRAC: Money Laundering Controls “not optional” – SkyCity Faces Civil Penalties

Australian Transaction Reports and Analysis Centre (AUSTRAC) is the financial crimes intelligence and enforcement agency keeping residents safe from serious financial crimes. The government watchdog has begun proceedings against SkyCity Adelaide in Federal Court alleging systemic and serious non-compliance with anti-money laundering and counter-terrorism financing rules.

The civil case follows the announcement of another last month against Star Entertainment Group for the same types of lapses in corporate responsibility generally.

The action by AUSTRAC wouldn’t appear to come as a surprise to corporate governors as it was warned about in October during Sky’s Annual General Meeting.

SkyCity has been under investigation since mid-2021 when indiscretions were exposed during an industry-wide campaign on compliance launched by authorities in late 2019.

Deputy CEO of AUSTRAC, Peter Soros said in a report on the agency’s website that systemic failures in SkyCity’s approach to AML/CTF obligations had been identified.

Soros said, “AUSTRAC’s investigation identified a range of circumstances where SkyCity failed to carry out appropriate ongoing customer due diligence.

SkyCity also failed to develop and maintain a compliant AML/CTF program, leaving it at risk of criminal exploitation.”

Framework Didn’t Exist for Proper Oversight

A laundry list of offenses is alleged in the announcement including assertions that the company failed to recognize the risk it faces for money laundering and potential terrorist financing as well as the likelihood of risk as well as the potential impact. The company also allegedly failed to identify and respond to those risks changing over time.

Suspicious activity monitoring was not possible to achieve appropriately due to the scale of the problem and the complexity and size of the casino operation.

High-risk customers were not subjected to appropriate enhanced due diligence and additional checks.

Another allegation as the watchdog enters the penalty phase of the enforcement action states that no appropriate framework existed to give senior management and the board appropriate oversight of the AML/CTF that were in place.

Operator Ignored Risks

Additionally, it is alleged that Sky “Did not include in its AML/CTF programs appropriate risk-based systems and controls to mitigate and manage the risks to which SkyCity was reasonably exposed.”

Finally, the agency contends that Sky failed to conduct appropriate due diligence on a variety of customers who presented higher risks for money laundering.

Soros explained, “The requirement for regulated entities to have appropriate AML/CTF controls and systems in place is not optional and should be taken seriously by all businesses regulated by AUSTRAC,” Soros said.

“AUSTRAC continues to work with SkyCity to ensure it complies with its obligations under the AML/CTF Act and to ensure it continues to meet its obligations in the future.

“This is the third civil penalty proceeding AUSTRAC has brought against businesses operating in the casino sector. It should serve as a warning to casinos and all other businesses regulated by AUSTRAC to take their AML/CTF obligations seriously and comply with the AML/CTF Act and AML/CTF Rules.”

Source: Another hit for Australia’s casinos as AUSTRAC launches civil penalty proceedings against SkyCity Adelaide, Inside Asian Gaming, December 7, 2022

The post AUSTRAC: Money Laundering Controls “not optional” – SkyCity Faces Civil Penalties appeared first on Casino News Daily.

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