Oversight and legal action
AML supervision is oversight of how regulated businesses meet their duties. AUSTRAC provides guidance and monitors compliance. Enforcement uses legal powers to address breaches. These activities can overlap.
AUSTRAC also operates Australia’s financial intelligence unit. That intelligence function is distinct from a court’s decision that a business has contravened the law.
Source: AUSTRAC: About AUSTRAC: regulatory and financial intelligence roles.
Three examples of enforcement powers
Under section 191, the AUSTRAC CEO can give a remedial direction after being satisfied that a reporting entity contravened a relevant civil penalty provision. The direction can require specified action to prevent future contraventions.
Under section 197, the CEO can accept a written undertaking to take, stop or avoid specified conduct for compliance. Section 198 provides for court enforcement of a breached undertaking.
Under sections 175 and 176, the CEO can seek a civil penalty order. The Federal Court decides whether the contravention is established and whether to order a penalty.
Sources: Federal Register of Legislation: Sections 175, 176, 191, 197 and 198; AUSTRAC: Remedial directions, enforceable undertakings and civil penalty orders.
- Remedial direction
The CEO directs specified action under the Act.
- Undertaking
The CEO accepts a written compliance commitment.
- Civil penalty
The Federal Court decides an application for a penalty.
AML supervision and enforcement
These are examples of separate powers. They are not a mandatory order of action.
Separate evidence questions. An answer to one does not settle the others.
There is no fixed sequence
These powers are not three required steps in an escalation ladder. Each has its own legal conditions. A voluntary correction does not itself prevent AUSTRAC from taking enforcement action.
Read an actual notice, undertaking or order for its scope, actions and dates. Do not infer a penalty from another business’s case.
Sources: Federal Register of Legislation: Sections 175, 176, 191, 197 and 198; AUSTRAC: Remedial directions, enforceable undertakings and civil penalty orders.
Example: evidence of a correction
In a fictional business, a manager finds that staff did not apply an approved customer control. The manager records the affected cases and arranges corrective action. They retain evidence that the correction works.
The record does not claim that the correction settles a regulatory matter. If AUSTRAC has issued a notice or direction, the business must assess that document separately.