AUSTRAC has issued an infringement notice to State Street, with a fine totalling around $1.2 million for failing to report international funds transfers.
Under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act), financial institutions are required to report international fund transfers instructions (IFTIs) to AUSTRAC within 10 business days of sending or receiving the instruction.
State Street Corporation has confirmed it is working with the regulator to address weaknesses in its IFTI reporting.
A spokesperson for the investment giant said the company had identified and self-reported the insufficiencies in its reporting process.
“We have reviewed our IFTI reporting systems and controls and have worked with an independent consultant to develop a remediation plan to address the issue,” they said.
State Street has stated there is no business or financial impact on any of its clients, with its spokesperson insisting the integrity of the transactions is not in question.
“We take our obligations under anti-money laundering and counter-terrorism financing legislation extremely seriously,” the spokesperson said.
“There is no suggestion that the transactions in question were suspicious, nor that there were deficiencies in State Street’s customer due diligence.”
AUSTRAC chief executive Nicole Rose said law enforcement agencies rely on financial transaction information to track criminals and criminal activity, commenting the timing and accurate reporting of transactions are critical.
“Because the most sophisticated criminal syndicates operate across national borders, information about international funds transfers can provide a key piece of the puzzle for our law enforcement partners,” Ms Rose said.
Last year, regulated businesses reported 155 million international transfers to AUSTRAC.
“Businesses are the first line of defence in protecting the community and our financial system from criminal abuse so it is critical for AML/CTF compliance and risk management to be embedded into everyday business practices to protect customers and businesses from criminals,” Ms Rose said.
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