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The Australian Law Council revealed a report that shows loopholes in attorneys’ compliance with authorities’ regulations and deficiencies in combating money laundering and terrorist financing.
Law Council reports disclosed that Australian professional solicitors adequately uphold the international AML screening and risk assessment procedure to conclude threats associated with clients. The Law Council also emphasised that money laundering and terrorist financing are severe crimes with destructive outcomes. The Australian Criminal Intelligence stressed that serious and organised crime groups had become a profession and now exploit financial institutes and regulatory authorities to launder money. They know how to search the loopholes in the complex and digital financial system.
The Law Council also hired an independent AML derivatives expert to examine the vulnerabilities in the Australian legal profession to combat money laundering. The independent professional revealed that Australian lawyers are conducting additional AML checks to mitigate the money laundering risk through the existing regulations and professional measures. Exceptionally, these rigid measures include the limited charges of cash, compliance with all obligations, conducting KYC, especially before onboarding overseas clients and preventing from holding assets for clients. The president of the Law Council of Australia, Luke Murphy, stated, “To our knowledge, the examination of vulnerabilities Associates were engaged to undertake is a world first. We believe this highlights the commitment the Australian legal profession brings to understanding and minimising AML/CTF risks and provides a strong evidence base upon which effective decisions and changes can be made.”
This survey also identified the vulnerabilities in lawyers’ AML measures, such as risk assessments, finding the source of the wealth, and challenges in corporate verification, including understanding the shareholders of the business. The Australian Law Council can overcome these risks through adequate training and education, partnership with the banking industry to increase transparency, and modern technologies such as electronic customer and business verification. The survey also disclosed that most Australian law firms operate through the practices of AML laws, but they comply with four principles. Implementing the latest rigid regulations and expensive compliance procedures are a concern for law firms to extend anti-money laundering and terrorist financing measures.
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