After concluding its investigation into the Australian BNPL service Afterpay, The Australian Transaction Reports and Analysis Centre (Austrac) has decided to not pursue any further regulatory action against it. In June 2019, the Austrac had requested the appointment of an external auditor into Australian operations of buy now pay later company Afterpay. The Australian regulator specifically asked to look into Afterpay’s compliance with the “Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act).”
Details of Afterpay Austrac investigation
Austrac said, in response to the recommendations and findings found in the external audit report, BNPL darling Afterpay uplifted its financial crime function and AML/CTF compliance framework and finished all remediation required for compliance.
Austrac also said that it has reiterated the importance for BNPL Afterpay to be in alignment with its compliance obligations from now on and that it will continue to work together to make sure it understands the obligations of compliance it has and its role in fighting financial crime.
After analyzing and considering the response and the report by Afterpay, the regulatory agency has decided to not undertake any further action against it. Austrac also took this as an opportunity to remind the new and emerging fintech service businesses about the obligations they have under the AML/CTF Act.
Other financial investigations by Austrac
In September, Austrac requested a similar investigation of online payments system PayPal, with the investigation to primarily focus on ‘ongoing concerns’ with regards to the Australian compliance with the AML/CTF Act arm. The concerns related to compliance of PayPal Australia with the company’s International Funds Transfer Instruction (IFTI) reporting obligations. However, in March, the regulatory announced that an extension has been granted to the auditors while ‘taking into consideration the size, scope, and complexity’ of the business operations of PayPal Australia and its overlap with the international operations of PayPal.
Austrac said that the extension will enable PayPal Australia (and the external auditor) to completely examine their compliance with the AML/CTF Act. In September, Austrac also reached an agreement with Australian bank Westpac to settle its AML/CTF financing allegations raised by the watchdog in November 2019.
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