Table of Contents
Money Laundering Key Insights
- In simple terms: Money laundering is turning proceeds of crime into funds or assets that appear legitimate.
- Why Tranche 2 should care: property, corporate structures, and professional services are commonly used to disguise beneficial ownership and the origin of funds.
What Is Money Laundering?
AUSTRAC defines money laundering as turning the proceeds of crime into funds or assets that seem legitimate.
Examples Relevant to Tranche 2 Sectors
- A criminal buying property through layered companies and nominee arrangements.
- Funds routed through multiple accounts then used as “clean” deposits for a property settlement.
- Use of an accountant, lawyer, or TCSP to create structures that obscure the true controller.
- Converting criminal cash into assets that can be sold later with an apparently lawful origin.
Legal and Regulatory References
- AML/CTF Act 2006, section 5, referenced in AUSTRAC’s glossary entry for money laundering.
- Criminal Code 1995, Division 400, referenced by AUSTRAC for money laundering offences.
Best Practice Controls
- Map where your business can be abused across client onboarding, payments, trust accounts, and third party arrangements.
- Use KYC information to understand ownership, control, and expected activity.
- Apply enhanced due diligence where the risk warrants it and document your rationale.
- Ensure staff know how to identify suspicion and escalate internally.
Key Challenges in Detecting Money Laundering
- Over focusing on identity checks while ignoring behavioural risk such as unusual payment patterns.
- Commercial pressure to complete transactions quickly, particularly in property.
- Poor documentation of why a risk decision was made.
Final Thoughts on Money Laundering
If your controls only address who the customer is, and not how the transaction behaves, you will miss the laundering story. Good AML control design ties identity, ownership, purpose, and payment flows together.
How Tranche 2 Consultants can help: build a sector fit risk assessment, policies, onboarding playbooks, and staff training that target the real laundering pathways.
“Bookmakers sit at a natural convergence point for cash, speed and anonymity. AUSTRAC’s focus reflects the reality that wagering platforms can be misused as value transfer mechanisms if risk controls are not actively applied.”
FAQs on Money Laundering
Is money laundering only about cash?
No. It can involve bank transfers, corporate vehicles, digital assets, and trade based movements, as long as the goal is to disguise criminal origin.
Why is it a Tranche 2 priority?
Because criminals actively seek gatekeeper services to legitimise assets and reduce detection risk.
