A group of 9 cashed-up Russian nationals flew in from
Irkutsk, Siberia, ready to celebrate New Year's Eve in
Australia. Their visa application forms stated that they were all
employees of a gemstone mining company in Russia.
During their stay, two of the party visited the ANZ Bank in
Surfers Paradise and opened two debit card accounts. The coming
weeks and months saw the opening of 24 more bank accounts. In the
weeks and months following, hundreds of thousands of dollars were
deposited into the accounts, which, by December 2013, totalled
approximately $30 million.
Transaction records obtained from the bank show that the
Russian nationals liked to shop and had expensive tastes, including
luxury retailers, first class travel and jewellery.
Australia's AML/CTF regime was implemented to address the
threats that money laundering and terrorism financing pose to
national security and the integrity of key sectors of the economy,
and to bring Australia into compliance with international AML/CTF
standards developed by the Financial Action Task Force
Organisations or 'reporting entities' which fall within
the ambit of the AML/CTF regime (such as banks, financial services
providers, the gambling industry and money service providers) are
required to comply with various obligations. Compliance with these
obligations is overseen by the Australian Transaction Reports
and Analysis Centre (AUSTRAC).
Back on the Gold Coast:
Unsurprisingly, the scale of the amounts deposited alerted
the Australian authorities to investigate the Russians and their
transactions. Further, the bank determined that there was no
reasonable explanation as to the source of the funds deposited
– according to their visa applications, the highest-paid of
the group stated that their annual income was $65,000.00.
Investigations found that the money deposited in the Gold Coast
accounts was traced to 8 foreign companies with bank accounts in
Hong Kong and China.
In December 2013, as a result of its investigation, and with
the co-operation of the Surfers Paradise bank, the Australian
Federal Police froze all of the Gold Coast bank accounts. Although
the Russian nationals are no longer in Australia, they have been
ordered by the Queensland District Court to provide sworn
statements explaining the source of the funds. Failure to do so
will lead to their $30 million fortune to be confiscated by the
As well as the reporting of funds transfer instructions and the
identification of customers, an important obligation for reporting
entities is to ensure that Part A of their AML/CTF program is
subject to regular independent reviews.
We conduct AML/CTF reviews for clients in a range of businesses
and we often see the same issues emerging. In our experience,
independent reviews, as well as being a requirement of the
legislation, provide reporting entities with an effective summary
of how their AML/CTF compliance is tracking and how they can
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
There has been a range of recent legal developments that affect privacy, child abuse claims and workers compensation.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).