Govt acts against terrorist financing

Nov 28, 2006

Australia will start meeting international standards for choking terrorist financing under legislation which passed the House of Representatives.

The Anti-Money Laundering and Counter-Terrorism Financing Bill puts greater burdens on a wide range of financial institutions to check that money they handle isn't destined for terrorists or criminals.

Labor supported the measure, but used the debate to criticise the government for being slow to act.

In introducing the bill, Attorney-General Philip Ruddock said Australia would be brought into line with recommendations by the international Financial Action Task Force.

"Australian business faces reputational risk and financial loss if Australia fails to observe international standards," he said.

However the bill only covers the financial and gambling sectors, bullion dealers and lawyers and accountants who compete with the financial sector.

A further measure, yet to be introduced, will cover real estate agents, jewellers, and other lawyers and accountants.

The businesses covered by the current bill will have customer due diligence, reporting and record-keeping obligations.

The banks must also check on overseas banks they deal with and ensure identifying information is included in international electronic funds transfers.

The Australian Transaction Reports Analysis Centre, which will receive an extra $139 million over four years, will supervise the new system.

Mr Ruddock said the new system would impact on privacy.

"But the impact is a proportionate response to the problems caused by money laundering and terrorism financing in the current climate of heightened organised criminal and terrorist activity," he said.

Labor's homeland security spokesman Arch Bevis said the legislation should have been in place years ago.

If it had, some of the AWB officials involved in the Iraq wheat scandal may have been caught by its provisions, he said.

Mr Bevis said it had taken the "sluggish" government more than five years since the September 11 to start enacting the laws.

Australia now had some of the weakest financial laws in the world, down there with Haiti and the Dominican Republic.

"It is a long overdue step in the right direction," Mr Bevis said.

The bill and another associated bill passed the House of Representatives.


©AAP 2006 - http://news.ninemsn.com.au/article.aspx?id=67607