Due to “systematic contraventions of Australia’s anti-money laundering and counter terrorism financing laws”, the Australian Transaction Reports and Analysis Centre (AUSTRAC) has issued a £167,389 fine – its largest to date.
MoneyGram Payment Systems, one of the world’s biggest remittance network providers, was alleged to have made 33 unspecified contraventions. It has paid a record AUD 336,600 (£167,389) infringement notice for providing services through remittance businesses that weren’t registered.
This is not, however, the first time that MoneyGram has had to pay a fine for a contravention under the Anti-Money Laundering and Counter Terrorism Financing Act (AML/CTF).
In January 2015 it paid a AUD 122,400 penalty after informing AUSTRAC that it had provided remittance services through six unregistered partner businesses.
The multibillion dollar global remittance industry is infamous for being at high risk of money laundering and terrorist activity.
As a result, countries with large numbers of remittance operations, such as Australia, are enforcing stricter licensing requirements in a number of jurisdictions.
You can view the official report here.
This move highlights the need for people and their businesses to make sure they are using a registered and fully regulated remittance service provider.
Within the UK this means that the provider should be registered with HM Revenue & Customs as well as with the Financial Conduct Authority. In Australia the remittance provider should hold an Australian Financial Services Licence (issued by ASIC) in order to deal in foreign exchange.
In South Africa it should hold an FSB licence and in the USA it means being registered as a Money Services Business with FinCEN.
The number of clients a provider handles, as well as the number of years they have been in business, are also good indicators. However, you should always do a background check to make sure they have not incurred any penalties.