AUSTRAC raises concerns over Western Union’s compliance with anti-money laundering laws

International money transfer specialist Western Union is in the sights of Australia’s anti-money laundering regulator AUSTRAC which has raised concerns about the US-based group’s oversight of suspicious transactions.

AUSTRAC has appointed an external auditor to Western Union Financial Services Australia to investigate the company’s compliance with Australia’s anti-money laundering and counter-terrorism finance (AML/CTF) laws after the company previously self-reported issues.

While Western Union has not been accused of any wrongdoing, AUSTRAC says the auditor will determine if there are any failings by Western Union that need to be addressed.

Among the concerns raised by AUSTRAC are core anti-money laundering issues such as poor customer due diligence, delayed or non-reporting of suspicious matters, non-compliant international funds transfer instruction reporting and concerns about whether Western Union’s AML/CTF program is functional.

AUSTRAC CEO Brendan Thomas notes that businesses providing international funds transfers pose a high risk for money laundering.

“The remittance sector is particularly vulnerable to criminal exploitation,” says Thomas.

“Western Union has self-disclosed issues with its systems and consistently committed to remedial action however, AUSTRAC is still not satisfied that Western Union is meeting its AML/CTF obligations.

“The recurrence of these issues raises concerns about the effectiveness of Western Union’s AML/CTF program and internal processes, which is why we are taking this action.”

Thomas points out that if businesses fail to administer their AML/CTF programs properly it has “a knock on effect that creates gaps in the financial system’s defences against criminal misuse”.

“Unfortunately, criminals are always on the lookout for weaknesses and that’s why it is so important to make sure your business has the right defences.”

AUSTRAC says the auditor’s report will provide the regulator with information to help Western Union better meet its compliance obligations and inform whether further regulatory action is required.

“AUSTRAC will then assess if further regulatory action is appropriate,” says Thomas.

“This action should serve as a reminder to the whole remittance sector, whether you are a large multinational operator or a one person business- you are part of the safety net that protects the financial system and the community from serious and organised crime.

“Play your part and lock down your business so that AUSTRAC doesn’t have to come on the scene and take action.”