Costly anti-laundering reforms back on agenda

The financial services industry is one step nearer to having closure on the looming and potentially crippling cost of identifying more than nine million investors under new international anti-money laundering measures, after the Federal Government put the issue back on the agenda last week.

The reforms, which relate to recommendations by the international Financial Action Task Force (FATF), had been relegated to the backburner in the lead up to the Federal election.

However, a spokesperson for the Attorney-General’s Department said the Government was now revisiting its work in developing the Bill.

“The draft legislation is currently being prepared and will form the basis of a further round of public and industry consultation in the new year,” the spokesperson said.

A key element of the reform relates to FATF’s ‘Know Your Customer’ recommendation, but it will also take into account 39 other recommendations by the global inter-governmental body.

The spokesperson confirmed that costs would be incurred by the financial services industry, however, she was reluctant to specify the level of financial burden.

The Attorney-General’s Department released a series of issue papers earlier this year, with consultation with industry taking place via the Minister for Justice and Customs Senator Christopher Ellison’s Ministerial Advisory Group.

The Investment and Financial Services Association (IFSA) has been particularly vociferous in lobbying the Government on the issue.

According to IFSA chief executive Richard Gilbert, the main concerns of those that will be affected by the reforms are the costs of adherence to the new measures and whether the reforms will be retrospective.

However, the Attorney-General’s Department attempted to reassure worried fund managers and product providers by stating that it would look to minimise “the cost and red tape involved in implementing the reforms”.