Journal of Law, Information and

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JlLawInfoSci 22

International Funds Transfer Instructions :

Australia at the Leading Edge of Financial
Transaction Reporting
by NEIL J JENSEN[*]

Abstract
In this article the Australian legislation dealing with International Fund Transfers is detailed
and examined. The need for this type of regime in an era of complex taxation investigations
and subsequent law enforcement is justified. As explained the most effective and efficient way
to conduct this is by the use of smart technology. The development of this technology so that
better analysis of the information can be made is also considered. The author concludes by
asking whether the costs of the reporting system justify the benefits. He states that this is an
issue that needs to be closely and continually considered and that the benefits must include
the deterrent factor associated with the financial transaction reporting regime.

On 6 December 1992, Commonwealth legislation took effect which requires the reporting of
international funds transfer instructions to the Australian Financial Reports and Analysis
Centre (AUSTRAC). International funds transfer instructions are defined as :

“an instruction for a transfer of funds that is transmitted into or out of

Australia electronically or by telegraph, but does not include an instruction of
a prescribed kind”.[1]

They are most often referred to as international telegraphic transfers or wire transfers.

This was a very important enactment as it placed Australia at the leading edge of financial
transaction reporting for the purposes of revenue and law enforcement use.

In 1988, the Australian Parliament had enacted legislation to assist in the fight against money
laundering, particularly in the areas of major tax evasion and serious and organised crime.
That legislation was the Cash Transaction Reports Act 1988 (which is now the Financial
Transaction Reports Act 1988 [“FTR Act”]) and was predominantly focused on domestic
cash transactions but also included provisions for the reporting of cash movements into, and
out of, Australia.
The theory behind the original cash transaction reporting legislation is that cash is the basic
financial commodity associated with drugs, serious crime, and tax evasion. Although cash is
a major component of the financial activities of those associated with criminal activity, the
Australian Taxation Office and law enforcement agencies consider that the detection of the
major players will involve consideration of non-cash activities in tandem with cash activities,
and a major component of those non-cash activities is found in the use of international funds
transfer instructions.

In mid-1990, enquiries were made by AUSTRAC with the law enforcement and revenue
agencies to assess the likely usage of international funds transfer instructions by criminals
generally and by persons evading tax. The report which resulted from those enquiries
indicated that there was a trend towards internationalisation of criminal activity and the
resultant financial conduct and found that there was an increasing emphasis on international
investigations of criminal activity.[2] The report outlined the difficulties in obtaining relevant
data from the banks because of the law enforcement and revenue agencies lack of necessary
information, such as date, bank, branch, and customer name. Those agencies indicated that
without access to international funds transfer instructions they have some difficulty in
locating and proving overseas transactions. As a consequence, overseas assets obtained from
the profits of criminal activity in Australia were not being discovered, the extent of off-shore
rorts were not being accurately gauged, cases were not being pursued and offenders were
escaping the judicial system. The agencies indicated that early access to information relating
to international funds transfer instructions would facilitate the tracking of off-shore
movements of funds resulting from tax evasion and other crime and would therefore assist in
the process of revenue collection and the collection of proceeds of crime.

A March 1991 report of the House of Representatives Standing Committee on Legal and
Constitutional Affairs into International Profit Shifting activities (the Martin Committee),
considered that revenue loss resulting from withholding tax abuse was somewhere in the
range of $100 million to $943 million per annum.[3]

In looking for ways to overcome this abuse the Martin Committee highlighted the need for
information relating to international funds transfer instructions to be more readily available to
the Australian Taxation Office and noted the deficiency in the cash transaction reporting
system as it then existed. The committee concluded that :

“It is evident that telegraphic or wire transfers are the predominant means by
which funds are channelled from Australia overseas. The cash transaction
reporting system which has been established, though, does not monitor such
transfers. The committee considers this to be a notable deficiency, as it
precludes the ATO from an important source of intelligence in its efforts to
combat international profit shifting. The capture and analysis of telegraphic
transfer data would add a significant dimension to the ability of the ATO and
law enforcement agencies to strike at the major incentive behind international
organised crime - financial gain. In addition, the intelligence provided by this
data should enhance the ATO’s ability to detect and investigate international
profit shifting arrangements ... “[4]

In its report, the committee recommended that :

 “... a system for monitoring and reporting telegraphic/wire transfers of funds
be implemented, with the Cash Transaction Reports Agency responsible for
the establishment and administration of such a system.”[5]

In December 1991, in its report on money laundering, the National Crime Authority also
considered the matter of funds moving off-shore when it stated that :

“Australia has recognised that the geographic isolation that once protected it
from many international trends has lessened. Modern communications have
linked Australia to the world financially and thus to activities such as
international money laundering. As evidenced by the case studies of money
laundering in Australia examined during this inquiry, the proceeds of crime
are regularly transferred overseas.”[6]

A recent investigation into drug related criminal activity highlights the use of international
funds transfer instructions by the criminal element. The investigation was explained at a
public hearing during the Senate Standing Committee on Legal and Constitutional Affairs
review of the Financial Transaction Reports legislation.

“... Operation Elastin ... was an investigation into a well-established and

sophisticated narcotics syndicate engaged in international trafficking of heroin
between Thailand, Japan and Australia. The investigation was initiated as a
result of irregularities detected by the Cash Transaction Reports Agency, as it
was known in early 1991, concerning overseas telegraphic transfers of
Australian currency to various banks in Japan and south-east Asia. As a result
of further enquiries, Operation Elastin subsequently turned the investigation
towards a major narcotics importation syndicate. The investigation resulted in
the Australian Federal Police arresting the principals in this syndicate for their
involvement with importing approximately five kilo’s of heroin. All received
lengthy custodial sentences ... As a result of advice to the Japanese authorities
concerning this investigation, the Japanese police in Osaka arrested the
supplier of heroin ... He presently awaits trial in Japan.”[7]

More recently, in an article in the Australian Financial Review of 3 September 1993 it was
reported that, following an investigation by the National Crime Authority, the Australian
Federal Police had charged two Chinese residents with money laundering offences involving
approximately $57 million. It was noted that funds had been transferred between bank
accounts in Melbourne and then transferred to an account in the United States.[8] There are
many other recorded instances of criminal activity or tax evasion where the principals in the
criminal activity have utilised international funds transfer instructions in the money
laundering process.

Internationally it is recognised that telegraphic or wire transfers are being used in the money
laundering process. Evan Thompson in an article in the Canadian Banker says that :

“The enemy in this war: the high-volume launderers, headquartered in centres

such as Miami or South and Central America, have perfected the electronic
wire transfer to shift huge blocks of drug money in seconds”.[9]
Government representatives in the United States have also made many comments on the use
of wire transfers in laundering the finances of criminal activity. In August of this year, in its
proposed amendment to the Bank Secrecy Act Regulations relating to funds transfers, the US
Department of Treasury and the Board of Governors of the Federal Reserve System
published the following in the Federal Register:

“Money laundering is a vital component of drug trafficking and other criminal

activity throughout the world, and federal law enforcement agencies believe
that a significant amount of the money laundered involves wire transfers.
Proceeds from illegal activities may be processed through money laundering
schemes involving domestic and/or international payments by wire transfers.
Such activity has been documented in several recent investigations conducted
by Treasury and other federal law enforcement agencies.”[10]

In his article “Investigating Criminal and Corporate Money Trails”, David Chaikin also
considers the use of wire transfers in the laundering of money in the US context. He states :

“In the modern world electronic transfers of money constitute the bulk of, and
the highest value transactions in, national and international payments. In the
United States more than US $1 trillion and over 400,000 transactions pass
through the nations clearing houses every day. Billions of dollars are wire
transferred into and out of the United States, with little government
monitoring. Since wire transfers are the fastest and most efficient way to move
funds from one bank to another they have a high potential for abuse. For
example, United States bank investigators estimate that over US $100 billion
of cocaine money is exported out of the United States by wire transfer each
year. The American Bankers’ Association stated in 1989 that ‘wire transfers
which are essentially unregulated, have emerged as the primary method by
which high volume launderers ply their trade’. Senator John Kerry has called
for ‘wire transfer accountability’. ... Once illicit money is deposited into the
banking system, it becomes anonymous and its character obscured by the
millions of banking transactions that occur daily. Banks do not generally
question wire transfers of millions of dollars by established customers.
Traditionally they have considered that it is none of their business to examine
the use of their customers’ funds, apart from the case where it is patently
fraudulent.”[11]

In October 1991 a Bill[12] was introduced into parliament which sought to put into effect the
recommendations of the Martin Committee through amendment to the Financial Transaction
Reports Act. Debate in the Australian Parliament during the course of the Second Reading
speech on the Bill provided what appeared to be a bi-partisan acceptance that the availability
of reports of international funds transfer instructions, to the Australian Taxation Office and
the law enforcement agencies, was of major importance in combating both tax evasion and
the laundering of profits from serious crime. The Commonwealth Attorney General of the
time, Mr Michael Duffy, said :

“In conclusion, I stress that the country cannot afford to continue to suffer the
vast revenue losses through tax and customs evasion or tolerate the removal
offshore of the proceeds of some of our most serious crimes. The average
Australian is tired of seeing the high fliers rort the system. The shareholders of
 this country are tired of seeing their investments moved offshore, seemingly
without trace and certainly beyond their reach, often for the personal gain of
unscrupulous manipulators. Lack of means to detect and trace such
movements is a serious weakness in the system which now must be
remedied.”[13]

In response, the shadow Attorney General, Mr Andrew Peacock, commented that :

“In conclusion, it is - bluntly put - an outrage that the withholding tax system
has been a source for tax evasion for so long. It is scandalous that the
Government has not faced up to the problem. Provision for the reporting of
international telegraphic transfers should have been brought in over a year
ago, at the time the former tax screening arrangements and foreign currency
controls were brought to an end.”[14]

The Benefits of the Consultative Process in the Development

of New Legislation
From the time that AUSTRAC was asked to consider the issue of international funds transfer
instructions, it had consulted with the Australian Bankers Association, major banks and the
revenue and law enforcement agencies.

In its first report on international funds transfer instructions in January 1990[15], AUSTRAC
had considered a number of issues as a result of its consultation with bank representatives.
The issues outlined in the report included - the type of transfers involved in international
funds transfer instructions, information being recorded and stored by the banks, volumes of
likely transactions, extent of criminal usage of international funds transfer instructions, Tax
Screening, and, the inadequacy of the reports to AUSTRAC of suspicious transactions and
significant cash transactions with regard to reporting of international transactions. The report
indicated that the international funds transfer instructions are generally transmitted
electronically through SWIFT[16], by the use of telex[17], by other proprietary systems[18], or
by internal banking systems[19]. It indicated that as the bulk of the data is in an electronic
format, that data can be captured, duplicated and reported to AUSTRAC. It was noted that the
data is already captured by the cash dealers and would be capable of being reported in its
entirety. The banks also considered that electronic reporting of international funds transfer
instructions, at least by the major banks, would be possible should reporting of international
funds transfer instructions be required by the government.

Further enquiries were also undertaken with a number of the banks and with United States
authorities. As a result, AUSTRAC provided a report to the then Australian Attorney
General, Mr Michael Duffy recommending the establishment of a working group comprising
bank and law enforcement and revenue agency representatives, to consider the methodology
of capturing data. That methodology was to include - technical methods of reporting, paper
based telexes difficulties, exemptions, parameters for reporting, the necessity for reporting
foreign exchange and money market transactions, whether the reporting of international funds
transfer instructions would have the desired law enforcement result considering other forms
of off-shore movement, and, a timetable for implementation of international funds transfer
instructions reporting.
The working group was convened by AUSTRAC and met in November 1990. All
representatives who attended the working group indicated that they had a general
philosophical agreement with reporting of international funds transfer instructions. At that
meeting, a balance was struck between the needs of the law enforcement and revenue
agencies and the ability of the cash dealers to provide adequate data to meet those needs. The
consensus reached at that meeting was that as the law enforcement and revenue agencies only
have access to data which is contained within the records of the cash dealer, or which is
actually transmitted by means of the international funds transfer instructions, and that data
should be reported.

The discussions also concluded that the types of transactions which are most commonly
sought by the law enforcement and revenue agencies are customer related international funds
transfer instructions. It was also determined that reporting of international funds transfer
instructions would not generally include commercial foreign exchange transactions or bank
drafts because of the volumes and complexities of reporting those transactions. The law
enforcement and revenue agencies concluded that if they were to be able to review reports of
international funds transfer instructions information in their premises, international funds
transfer instructions information which was previously only available to them after lengthy
searching when they were aware that the transactions had occurred, that would be of such an
advantage to override the need for any additional data. The time and resource savings,
together with the location of financial transactions resulting from criminal activity which
would not otherwise be available, were important factors in reaching the consensus.

The consultative process in respect of this component of the reporting regime was, as has
been the case with all issues relating to the FTR Act, an important aspect of ensuring that the
reporting requirements were not onerous on the cash dealers in terms of the effect on their
commercial activities and in particular in cost and resource usage in reporting. Also, it was of
value in determining the information which was necessary for law enforcement and revenue
purposes as against that which would be merely useful or “nice to have”. In proposing that
international funds transfer instructions be reported to AUSTRAC, the Attorney-General
specifically noted the role of the cash dealers in this consultative process :

“The Australian Bankers’ Association and representatives of other major cash

dealers groups have worked closely with officers of my Department and the
CTRA in the development of this initiative, and I wish to thank them for their
co-operation and support. This co-operation is continuing in the development
of appropriate technology to permit the monitoring of such transfers to ensure
the effectiveness of the scheme and its appropriateness to the practices of the
finance industry.”[20]

The International Funds Transfer Instruction Amendments

to the Financial Transaction Reports Act 1988 : A Brief
Explanation of the Provisions
The amendments provided for new sub-sections 17B, C, D, E, F and G to the FTR Act.
Section 17B(1) establishes the requirement to report international funds transfer instructions :

"If :
 (a) a cash dealer in Australia is :

(i) the sender of an international funds transfer instruction transmitted out of

Australia; or

(ii) the recipient of an international funds transfer instruction transmitted into

Australia; and

(b) at least one of the following applies :

(i) the cash dealer is acting on behalf of, or at the request of, another person
who is not a bank;

(ii) the cash dealer is not a bank;

the dealer must, before the reporting time, prepare a report of the instruction."

The reporting of international funds transfer instructions transmissions will therefore be

required by cash dealers, located in Australia, who are transmitters of international funds
transfer instructions transmitted out of Australia, or, who are receivers of international funds
transfer instructions transmitted into Australia. That is, it is only the cash dealer at the
Australian end of the transaction who must report. There are less than 90 cash dealers in
Australia who are involved in transmissions of international funds transfer instructions and
they generally comprise Retail Banks, Merchant Banks and Financial Corporations.

In the explanatory memorandum which accompanied the Bill, it was noted that international
funds transfer instructions where the bank only acts on its own behalf, such as transfers of
funds to effect bank to bank settlements or foreign exchange transactions which simply
convert one currency to another, have been excluded from the reporting requirements. The
exclusion of banks own transactions and bank to bank settlements was provided as “the banks
within the exemption are those caught by the stringent regulatory and supervisory
requirements of the Banking Act 1959”.[21]

The Director of AUSTRAC has considered exemption of transactions of other cash dealers
where they are of a similar nature to the banks' own transactions.[22] Exemptions were
considered on a case by case basis. Exempted international funds transfer instructions are
required to be retained by the cash dealer for a period of 7 years.

The international funds transfer instructions which are reported to AUSTRAC are therefore
generally those which are customer based for banks and all transactions for other cash
dealers, except where they have been exempted as outlined above.

In general, the report is an electronic copy of the international funds transfer instruction and
is provided to AUSTRAC in an electronic format. The precise details to be contained in the
report are prescribed in regulations[23] which have been determined in consultation with cash
dealers.

Put simply, where international funds transfer instructions are electronically processed by the
cash dealer, the electronic records are duplicated and transmitted to AUSTRAC in an
electronic format. A small number of manually processed international funds transfer
instructions are provided on an AUSTRAC paper report form. Approximately 99% of all
reports of international funds transfer instructions are being provided in electronic format.

The legislation also allows for the exemption of reporting of manually processed telexes by a
cash dealer who conducts large numbers of telex transactions and who will convert to
electronic processing of those telexes within the next five years. A small number of
exemptions have been allowed. Where exemptions from reporting have been granted, the
cash dealer is required to retain those exempted telexes for a period of 7 years.

The development of software to accommodate the reporting of free-format transmissions has

removed the need to exempt a large proportion of the manually processed telexes for which
exemption may otherwise have been sought by cash dealers. That software has been
developed by AUSTRAC and provided to the cash dealers.

Sub-section 17C of the FTR Act has been incorporated in the legislation to ensure that when
a bank is acting on behalf of another bank, a report will be required if the second bank is
actually acting on behalf of a customer. That sub-section has been included to clarify
paragraph 17B(1)(b)(i) which is intended to exclude only those bank to bank settlements
which do not involve customers.

An important safeguard is provided under sub-sections 17D, E, and F, which have been
included in the legislation to restate the existing private international law principles on extra-
territorial enforcement of laws. They are included to ensure that cash dealers have protection
from suits arising out of the requirement to report international funds transfer instructions,
where that may be contrary to the law of a foreign country. It is however considered that suits
should not arise as reporting is only undertaken by the cash dealer located in Australia.

To ensure that all cash dealers comply with the legislation, audit powers have been included
in the legislation. Sub-section 17G empowers the Director, or his representative, to gain
access to the cash dealer's premises to inspect records and systems for the purpose of
monitoring the cash dealers compliance with those provisions.

The International Funds Transfer Instruction Regulations

The regulations made under the FTR Act contain the prescribed details of the data to be
reported to AUSTRAC as international funds transfer instructions.

Discussions with cash dealers indicated that the majority of international funds transfer
instructions are either transmitted through SWIFT or alternatively transmitted in a format
which is similar to the SWIFT format. As a result, the prescribed details contained in the
regulations mirror, where possible, the details which are generally contained in SWIFT
messages. As SWIFT messages contain both mandatory and non-mandatory fields, those
factors have been taken into consideration in developing the regulations. To overcome the
difficulties which would be encountered by the cash dealers if they were required to obtain
data in addition to that contained in the transmission, particularly where the transmission has
been received in Australia from overseas, a number of the fields which have been included in
the regulations will only be reported where that information is actually contained in the
transmission.
Why Australia is at the Leading Edge of Financial
Transaction Reporting
Australia is now at the leading edge of the reporting and use of financial transaction data for
taxation and law enforcement purposes through the FTR Act. The objects of the FTR Act are
to :

• Facilitate the administration and enforcement of taxation laws.

• Facilitate the administration and enforcement of laws of the Commonwealth and of the
Territories

• Make information available to State authorities to facilitate the administration and

enforcement of the laws of the States. [24]

The FTR Act was modelled on the United States Bank Secrecy Act which has been in
operation since 1970. The Bank Secrecy Act was enacted to:

‘require certain reports or records where they have a high degree of usefulness
in criminal, tax, or regulatory investigations or proceedings’ and to assist the
government with tracking monies that are being hidden in tax evasion
schemes. The BSA is a record keeping and reporting statute whose most
frequently cited requirement mandates that financial institutions report all
currency transactions involving more than $10,000, to the Internal Revenue
Service.”[25]

The US Department of Treasury and Board of Governors of the Federal Reserve System have
also stated that the “primary purpose of the Bank Secrecy Act is to identify the source,
volume and movement of funds into and out of the country and through domestic financial
institutions”.[26] It could be considered that the general purpose and function of both the FTR
Act and the Bank Secrecy Act are similar in most respects.

Both the Australian and US statutes also have provisions relating to international funds
transfer instructions or wire transfers and these are the only countries to require that this
information be readily available for law enforcement and revenue purposes. However, the
Financial Action Task Force, which is predominantly focused on money laundering issues
throughout the world, has shown an interest in ensuring that appropriate information flows
with the international funds transfer instructions through SWIFT. The SWIFT organisation
has also acted to ensure that the SWIFT operating instructions are adequately followed by
SWIFT members, particularly with regard to customer and beneficiary information.[27]

Although the Australian and US regimes are very similar, I would suggest that there are two
very important factors which assist to place the Australian legislation a step or two ahead of
the US legislation in their potential effectiveness for law enforcement and revenue usage.
Those factors are the actual reporting of international funds transfer instructions to a central
authority in real-time, as distinct from merely retaining records at the premises of the
financial institutions, and secondly, the technology base of the Australian regime.
Before pursuing these points I will briefly outline the present US position with regard to wire
transfers. It should be noted from the outset that the availability of detailed wire transfer
information for revenue and law enforcement purposes has been considered by the US
authorities since at least 1987. In 1992, the Bank Secrecy Act was amended in the Annunzio-
Wylie Anti-Money Laundering Act[28] to authorise the Treasury and the Board of Governors
of the Federal Reserve System, to jointly prescribe regulations to be effective by 1 January
1994, which will require financial institutions, as defined, to keep on their premises specific
records relating to domestic and international funds transfers. The Bank Secrecy Act, at
section 103.33, presently requires the recording of information relating to wire transfers,
however a noted deficiency is that it does not specify the actual information to be recorded.
The regulations which will result from the Anunzio-Wiley amendments will rectify this
deficiency by specifying the information to be recorded. Section 103.33 of the Bank Secrecy
Act presently requires that :

“Each financial institution shall retain either the original or a microfilm or

other copy or reproduction of each of the following :

• A record of each advice, request, or instruction received or given regarding any transaction
resulting ... in the transfer of currency or other monetary instruments, funds, checks,
investment securities, or credit, of more than $10,000 to or from any person, account, or place
outside the United States.

• A record of each advice, request, or instrument given to another financial institution or other
person located within or outside the United States, regarding a transaction intended to result
in the transfer of funds, currency, other monetary instrument, checks, investment securities,
or credit, of more than $10,000 to a person, account or place outside the United States.” [29]

The US legislation therefore will require that specified information in respect of wire
transfers would, for example, be recorded by a transmitting or receiving bank in the US and
be retained within its records for use by the Internal Revenue Service, US customs or one of
the many law enforcement agencies.

The US legislation also relates to both international and domestic transactions, whereas the
Australian legislation only relates to international transactions. It is important to note that, at
present the US does not have a system of national banks operating throughout the country;
most banks operate in one state only and messages are sent between states through domestic
systems. The structure and operation of the financial market in Australia is such that the
revenue and law enforcement agencies have less difficulty in pursuing reports of domestic
movements of funds than they do in chasing international movements of funds.

As outlined previously, in Australia there are approximately 90 organisations reporting

international funds transfer instructions to AUSTRAC, whereas in the US it has been
estimated that there will be approximately 60,000 organisations maintaining records in
respect of both domestic and international wire transfers.[30]

The inclusion of both the domestic and international wire transfers in the US legislation is of
interest both in terms of the reporting/recording argument and the use of technology. I believe
that electronic reporting of transactions to a central authority is more beneficial to the law
enforcement and revenue agencies than recording and record retention at the premises of the
financial institutions themselves.
One difficulty with a system of merely recording the information relating to wire transfers
and retaining it at the bank’s premises without any notification to the revenue or law
enforcement agencies, as is the case with the US legislation, is that it can only be useful to the
revenue or law enforcement agencies in a reactive sense. That is, they need information that a
transaction has occurred on a particular day, through a particular bank, otherwise they may
never know that the transaction has been undertaken. Even then it is likely that knowledge
will come quite some time after the event, thus making it extremely difficult to make
effective use of the information. With the Australian legislation, the data is quite often
available within 24 hours of the transaction, it is provided on-line to the revenue and law
enforcement agencies, and, it can therefore be assessed in a pro-active way to locate
transactions of interest to those agencies.

The Australian FTR system is predominantly technology reliant, that is, it seeks to have
reports made in electronic format where possible, and to allow computer access to those
reports by specified law enforcement and revenue agencies. The US system however, is
predominantly paper based, although more emphasis is now being placed on electronic
reporting of significant cash transactions. John Byrne, Senior Federal Counsel, American
Bankers’ Association, has recognised the benefits of electronic reporting and access. He has
commented that :

“the Australian system of money laundering deterrence ... is an ‘on-line’

system which is more effective and efficient than the US paper-based
system.”[31]

A possible argument which could be raised in favour of recording over paper based or
electronic reporting in the US context, is that relating to the volume of transactions which
would need to be reported in respect of domestic and international wire transfers. The
numbers of wire transfers in the US, both domestic and international, would likely be in the
100’s millions per year and would no doubt test the abilities of any computer facility.
International wire transfers alone would likely be in the 10’s millions. Australia does not
have this problem because of its focus only on international transfers and with a much
smaller volume to work with than the US authorities. AUSTRAC is finding that the 4 million
per year international funds transfer instructions will be easily manageable through the use of
its information technology. Also, trying to manage electronic reporting by 60,000 US
financial institutions would no doubt create enormous difficulties for the US authorities.
Electronic reporting by about 90 Australian cash dealers has been manageable, but not
without some difficulties.

I would suggest that the Australian financial environment is therefore much more conducive
to electronic reporting and as a consequence provides a much more timely and effective
product for law enforcement and revenue use than would the US system.

The use of Information Technology in Reporting and usage

of International Funds Transfer Instructions in Australia
Shortly after the commencement of the agency in January 1989, it became apparent that the
most efficient and effective means of making the financial transaction reporting system work
in Australia was to rely heavily on the use of information technology. This became even more
apparent with the introduction of the reporting of international funds transfer instructions
which will increase the database fourfold. The need to use advanced technology for the
system arose out of a number of discussions with senior representatives of the major cash
dealers, revenue and law enforcement agencies and senior government representatives in the
US. In the US, the paper based reporting system and the large number of reporting
organisations has contributed to substantial time delays in getting the data to users. That
system also requires substantial human resource to make the data available. It appears that as
a consequence of these difficulties, the data has not been readily available and may not
therefore be used to its fullest potential.

As briefly outlined above, the characteristics of the financial system in Australia are quite
different to the US. For example, the financial institutions in Australia are of small number
compared to those in the US, they are predominantly technology dependant and reasonably
up to date, with current technology being employed within their organisations. Also in
contrast to the situation in the US, Australia’s financial system, particularly the banks and
building societies, is largely branch based across the country, therefore out of necessity
relying on information technology to co-ordinate customer transactions. In the case of the
credit unions, although they are generally industry or regionally based, they have membership
of a national association, with the result that technology advances are co-ordinated and are
generally available to them.

The revenue and law enforcement agencies have also become more dependant on information
technology particularly in their efforts against revenue evasion and crime. The Australian
Taxation Office is in the process of undertaking a substantial modernisation program with
much greater emphasis on information technology. Similarly the law enforcement agencies
are becoming more technology reliant in pursuing their investigations. At the more serious
levels of criminality, such as with organised crime and major revenue evasion, it is likely that
the sophistication of the activities is such that it may only be possible through the use of
advanced technology to detect those activities.

The whole program of AUSTRAC is directed towards the use of smart technology which
must be effective in delivering networked searching capabilities and be able to link to
complex AUSTRAC programs for data analysis. An important link in that development has
been the consultative process with the cash dealers, as outlined earlier, not only in respect of
what was to be reported, but also in terms of determining the most efficient way of reporting
that information.

AUSTRAC's Information Technology (IT) facilities are located in Sydney's central North
Shore. Those facilities have been upgraded over the past 18 months to accommodate the
substantial increase in data which commenced on 6 December 1992 with the reporting of
international funds transfer instructions. The IT facility is oversighted by an AUSTRAC
appointed IT manager and Computer Power has operated as the prime contractor for IT
facilities management.

Development of the system, both in terms of hardware and software, commenced in January
1990 and by September 1990, the basic programs had been set in place and AUSTRAC had
commenced on-line networking of its data with the law enforcement and revenue agencies.
Refinement of the searching capabilities of the system and a program to remove problem
issues, principally associated with the need to enhance scrubbing of data from the banks,
were undertaken, and by August 1991 standardised, aggregated searching packages were
being developed.
From December 1991 to late 1992 detailed planning and analysis of the redevelopment of the
computer system was undertaken to accommodate the reporting of the international funds
transfer instructions. AUSTRAC's computing site was relocated in June 1992 and since that
time the computing infrastructure has been enhanced and new software has been developed.
The database systems have been redeveloped to enhance the capacity of the system to link
transactions; to better enable AUSTRAC to prepare summary reports of data; to monitor and
screen the data on a regular basis; and, to provide new analytical tools for use by AUSTRAC
and representatives of the law enforcement and revenue agencies who specialise in
intelligence work.

With the commencement of the reporting of international funds transfer instructions further
development took place to accommodate a substantial increase in the volume of data and to
obtain that data in an electronic format. As SWIFT and most telex and other computer based
transactions are already in an electronic format it was logical to obtain that information in an
electronic format. The legislation had been specifically drafted to accommodate electronic
reporting and to lessen the difficulties associated with a large paper based reporting system.

To assist cash dealers with electronic reporting of international funds transfer instructions,
AUSTRAC developed a software application which enables the direct input of data to the
AUSTRAC facility via an IBM PC (or equivalent) and modem. That application referred to
as the Electronic Data Delivery System (EDDS) also assists in the ability to create a direct
link between the mainframes of the cash dealers and the AUSTRAC facility. AUSTRAC has
provided information technology support and consultancy support in the development of
software to assist the cash dealers in linking their systems to the EDDS. The EDDS is run by
the cash dealers on their equipment at their own premises. AUSTRAC undertook
responsibility for the development, distribution and maintenance of the EDDS, and has
provided copies of the software without cost to all cash dealers required to report
international funds transfer instructions. AUSTRAC has also supplied each cash dealer with a
modem. The cash dealer has provided the appropriate PC hardware and a printer. The cash
dealer will incur no more than the cost of a local telephone call per transmission of a batch of
international funds transfer instructions data to AUSTRAC. This call will include the referral
of data by AUSTRAC back to the cash dealer for further action, where necessary. AUSTRAC
has therefore provided an incentive to transmit electronically.

The EDDS ensures that the reports are provided in the appropriate format and as a
consequence reduces the likelihood of "bad" data being received by AUSTRAC from the
cash dealer. It should also therefore eliminate the need to refer reports back to the cash
dealers where the data has not been formatted in the appropriate way.

It is possible for cash dealers to report electronically via EDDS even where they do not
capture the data electronically. The facility has a manual input into which can be keyed
international funds transfer instructions reports, particularly telexes, which are unformatted
when they are received from overseas. Those reports will also be capable of being retrieved
in a similar way to all other FTR information, by AUSTRAC and the law enforcement and
revenue agencies.

As a direct result of its continuing consultation with cash dealers, FTR information has
largely been provided to AUSTRAC in an electronic format. By June 1993, AUSTRAC had
received in excess of 3 million reports of financial transactions of which more than 95% have
been reported in an electronic format. Approximately 90% of the cash transaction reports,
which include significant cash transactions (more than $10,000) and international currency
transfer reports (more than $5,000) are reported electronically. This comprises about 1.8
million reports. As previously mentioned, more than 99% of all international funds transfer
instructions have been reported electronically, comprising 1.2 million reports which have
been reported through EDDS.

The technology developments undertaken by AUSTRAC also assist law enforcement and
revenue agencies in the way in which they access the data. Until recently, law enforcement
and revenue agencies were able to access the data base in a number of ways, for example,
directly on-line at their own premises through their own on-site terminals which are linked to
the AUSTRAC database, by request to AUSTRAC to undertake enquiries of the database on
their behalf, and through provision of summary or macro reports of data, such as reports
concerning particular industries or areas.

Experience gained over the past three years has shown that it is not sufficient to only provide
a passive database, supplemented by the referral of suspect transaction reports, to law
enforcement and revenue agencies as they do not have appropriate resources to maximise the
assessment and usage of that data. On-line searching of individual reports is time consuming
and automated techniques, such as the summary reports referred to above, have been
developed to counter those difficulties. With the introduction of the reporting of international
funds transfer instructions and the consequent substantial expansion in the number of reports
which are in the financial database, special processing efforts are required to allow activity of
interest to be effectively detected.

As a consequence, in consultation with Commonwealth law enforcement and revenue

agencies, AUSTRAC has developed a software product referred to as ScreenIT. That product
incorporates the investigative and analytical functions of the financial analyst in a software
application, to follow the links between international funds transfer instructions reports and
other financial transaction reports. By use of a knowledge based application it highlights
networks of data worthy of further enquiry. Those networks are then automatically weighted
as to their investigative interest. The resultant reports will be provided on-line to selected
areas within the law enforcement and revenue agencies on a regular basis.

Given that the bulk of the international funds transfer instructions data are provided on the
day of transmission or the day following transmission, the reports are available electronically
to the law enforcement and revenue agencies at their premises, shortly after the transmission
of the international funds transfer instructions out of, or into, Australia. AUSTRAC considers
that there is a need to look quickly at the international funds transfer instructions reports and
to react in real time to any information which has been produced by ScreenIT and the linking
process. The ability of AUSTRAC to provide that degree of service greatly enhances the
benefits which will accrue to the law enforcement and revenue agencies through access to
international funds transfer instructions. Those reports will be of value to the law
enforcement and revenue agencies in terms of intelligence gathering and as a case selection
tool.

AUSTRAC will continue to develop new products and analytical techniques to assist in the
most effective usage of FTR information.
Should Australia be at the Leading Edge - The Issue of Cost
Justification for International Funds Transfer Instruction
Reporting
It is clear that not everyone supports the view that the progression of Australia’s legislation in
support of detecting tax evasion and serious criminal activity, to a position where Australia is
seen as a world leader, is as clear cut and necessary as some would think. In the Australian
Bankers’ Association submission to the review of the FTR Act conducted by the Senate
Standing Committee on Legal and Constitutional Affairs, it was stated that :

“Australia is a leader in implementing the recommendations from the

Financial Action Task Force but there is a question of whether Australia is
doing more than it should to meet its international obligations. The Committee
should compare the costs and benefits of the Australian system with systems
overseas.”[32]

This raises the very valid point of cost justification for the reporting regime which is in place
in Australia. Others have also raised the issue of cost, both in Australia and in respect of the
US legislation.

In an article by John Byrne of the American Bankers Association published in 1992 [33], the
Association had indicated their commitment to “any workable policy that would hinder the
flow of money’s derived from illicit activity”. They considered that it was possible “to
establish effective monitoring and controls on international wire transfers originated in the
United States” but also added that “an international wire transfer policy may have the side
effects of slowing the global payments system, hindering legitimate world trade, and
penalising the international competitiveness of United States financial institutions” ...and ...
“that international wire transfers regulations must be measured against the industry’s ability
‘to comply with minimal service disruption and costs while addressing the need to stop the
flow of illegal moneys’”.

The US authorities have considered the overall effect of the proposed amendments and have
in August 1993 commented that :

“Today’s proposed rule would allow many financial institutions to rely upon
information systems already in place without diminishing the nature and
quality of the information required to be maintained. This modification
significantly reduces the resources and effort required of financial institutions
to comply with the terms of today’s proposed rule. ... [The proposal] will not
have an annual effect on the economy of $100 million or more. Nor will it
result in a major increase in costs or prices for consumers; individual
industries; federal, state or local government agencies; or geographic regions.
It will not have any significant adverse effect on competition, employment,
investment, productivity, innovation, or on the ability of United States-based
enterprises to compete with foreign-based enterprises in domestic or foreign
markets.”[34]
In terms of the possible effect on the payments system the Board of Governors of the Federal
Reserve System and the Department of Treasury indicated that they “must take into
consideration the usefulness of these records in criminal, tax, or regulatory investigations or
proceedings and the effect the record keeping will have on the cost and efficiency of the
payment system.”[35].

They considered those issues and issued a joint statement indicating that :

“the records to be retained under this proposed rulemaking will be particularly

useful in tracing the proceeds of illegal activities and will assist in the
identification and prosecution of individuals involved in such illegal activities.
Accordingly, Treasury and the Board believe that maintenance of these
records will have a high degree of usefulness in criminal, tax or regulatory
investigations of money laundering operations. Further, the Treasury and the
Board believe that these record keeping requirements will not have a
significant adverse impact on the cost or the efficiency of the payments
system.”[36]

David Chaikin has outlined his concerns in the Australian context, in stating that “the
usefulness of the reports to law enforcement should be balanced against the effect of any
ensuing requirement on the cost and efficiency of the payments system.”[37]

AUSTRAC considers that the benefits resulting from the system clearly outweigh the costs of
the reporting component of the Australian financial transaction reporting legislation. The
cost/benefit issue is one matter which is presently being considered by the Senate Standing
Committee on Legal and Constitutional Affairs which is reviewing the financial transaction
reporting regime in Australia.[38]

In its submission to that Senate committee, the Australian Bankers’ Association outlined the
results of a survey of its member banks which was conducted in January 1993. The survey
provided, inter alia, costings for complying with the requirement to report international funds
transfer instructions. The Australian Bankers’ Association estimated that the 1993 Annual
Operating costs for the reporting of international funds transfer instructions, aggregated for
its thirty members, totalled $0.4 million. It also noted that the aggregated establishment costs
of its members for the reporting of international funds transfer instructions amounted to $0.8
million.[39] Thus, the Australian Bankers’ Association estimate that the total cost of the
international funds transfer reporting requirements to the banks, who provide more than 90%
of all of the international funds transfer reports to AUSTRAC, for the establishment period
and the first year of operation, is $1.2 million.

In terms of both the US concerns and those raised in Australia as to the effect on the payment
systems resulting from the reporting of international funds transfer instructions, it seems that
any effects would be minimal. In Australia, the process of reporting data in an electronic
form, where it is commercially retained by the cash dealer in that same or similar form, does
not result in substantial costs being imposed on the cash dealers. As the international funds
transfer data that is reported to AUSTRAC is that commercial data which is merely
duplicated and sent off to AUSTRAC, there should be little, if any, effect on the cost or
efficiency of the payments system in Australia or overseas as a result of this legislation. As
outlined previously, the legislation was specifically developed to minimise any such effects.
In its 1992-93 Annual Report, AUSTRAC has provided a break down of the cost which it has
attributed to international funds transfer instructions. The expenditure for 1991-92 was
$3.925 million and for 1992-93 it was $8.76 million. Total cost for the period from 1991 to
1993 has therefore been $12.685 million of which $5.416 million has been for the purchase
of equipment and $2.026 million for computing staff.[40]

In contrasting the benefits of the system with its costs, it should be noted that benefits do not
only accrue in terms of revenue resulting from the use of the FTR information, but also in
terms of making it more difficult for criminals to be active in Australia. The most quantifiable
benefit is the revenue resulting from the usage of the information. In its submission to the
Senate review, the Australian Taxation Office said that “so far, additional tax and penalties
raised as a direct result of AUSTRAC data being used by ATO auditors amount to over $30
million”.[41] The Australian Taxation Office considers the results to be encouraging but say
that they will shortly be implementing plans for even more systematic and extensive use of
AUSTRAC data. It should be noted that those figures are exclusive of the use of reports of
international funds transfer instructions as that data is only now coming on-line to the
Australian Taxation Office. Use of that data should substantially increase the revenue results
for the Australian Taxation Office.

In terms of other revenue results directly attributable to the FTR reporting regime,
AUSTRAC has in its 1992-93 Annual Report briefly outlined Operation QUIT which is a
National Crime Authority Task Force investigation. The report states that “the efforts of the
task force have resulted in serious criminal offences against 21 persons and raised substantial
revenue (approximately $35 million) for both State and Commonwealth Tax Offices”.[42]

In terms of law enforcement results in which FTR information has been of value, there are
many recorded instances where criminals have been fined and imprisoned, where the courts
have issued other orders, and where there have been asset seizures in respect of the proceeds
of crime. All of these results are prior to the introduction and usage of reports of international
funds transfer instructions, which the law enforcement agencies have indicated, as I have
outlined earlier in this paper, will be of substantial added value to their investigations into
serious and organised crime.

One important factor in assessing the value of the reporting regime is the deterrent effect
which the legislation has on criminal conduct. It is very difficult to quantify this in dollar
terms. At the public hearings of the Senate review of the FTR Act in Australia, the issue of
the importance of such financial information being available as a deterrent to overseas money
laundering being directed through Australia, was briefly discussed. In the course of his
evidence before the committee, Mr Tom Sherman, Chairman of the National Crime Authority
and at that time President of the Financial Action Task Force, recounted a comment made at
the Financial Action Task Force meeting in Singapore in early 1993 :

“Firstly, it has a deterrent effect upon money launderers throughout the world.
If people see that Australia is serious in its mechanisms, they are less likely to
use our systems. I am not suggesting for one moment that we live in a perfect
world; we have money laundering problems. But I recall, for example, that a
couple of months ago in Singapore the task force had a meeting of 23 Asian
countries to discuss money laundering with some resultant action being
initiated in that region of the world. The US representative on the task force, a
Mr Rayburn Hess, who I think many would consider to be a world expert in
 the field, was describing to the delegates of that conference an example of
being a West German with $100 million in money to launder throughout the
world, how he would go about it and what areas of the world he would choose
in which to do it. One of the first things Mr Hess said was, ‘I wouldn’t go near
Australia because they’re now monitoring international telegraphic transfers
and that will leave footprints’. That is a very good example of the sort of
deterrent effect that these regimes have. If people in the international
community and money launderers see that Australia does have mechanisms
and is on guard and watching, as Mr Coad describes, it is a very valuable
deterrent. It is not perfect but nevertheless, I believe, still valuable.”[43]

Some Concluding Comments

Australia is at the leading edge of financial transaction reporting for the purposes of revenue
and law enforcement use. We are there because we have identified the need for the use of
financial transaction information in major law enforcement and taxation investigations, and
we have identified that the most efficient and effective way to utilise that information is
through the use of smart technology.

Electronic reporting by cash dealers and on-line access by law enforcement and revenue
agencies to real-time data are the major contributors to the results which they are now
achieving. Reporting of international funds transfer instructions has commenced and
information technology systems have been developed to enable better analysis of that data
together with other FTR information.

The anticipated benefits of opting for the reporting of international funds transfer instructions
to AUSTRAC, rather than record keeping by the cash dealers, are becoming evident. The cost
of reporting international funds transfer instructions is minimal and the potential results will
certainly justify that cost. The ability to minimise those costs, and to readily implement the
reporting requirements electronically, is directly attributable to the consultative process
involving the cash dealers and law enforcement and revenue agencies.

We should not however put our heads in the sand and proceed without further consideration
of the costs of the reporting regime. This is an issue which should be closely and continually
considered. In looking at the cost/benefit issue, the benefits should not only be considered in
terms of the revenue which can be seen to be directly attributable to the use of the
information, but also in terms of other law enforcement results and the deterrent factor
associated with the financial transaction reporting regime.

Neil Jensen is the Director’s Representative at the Australian Transaction Reports and
[*]

Analysis Centre and is located in Melbourne. This article is based on a paper which he
presented to the Financial Action Task Force meeting held in Sydney, Australia, on 9-11
September 1992.
[1]
Financial Transaction Reports Act 1988 - Section 3
[2]
An officer of the Australian Federal Police, Patrick Meyers, was seconded to AUSTRAC
to undertake this work. As a result a report titled “Client Agencies Demands For International
Telegraphic Transfer Information” was prepared in July 1990 .
[3]
Parliament of the Commonwealth of Australia, House of Representatives Standing
Committee on Finance and Public Administration, “Follow the Yellow Brick Road - The
final report of an efficiency Audit of the Australian Taxation Office : International Profit
Shifting”, March 1991, paragraph 2.48
[4]
Ibid, at paragraphs 5.27 and 5.28.
[5]
Ibid, at paragraph 5.30, Recommendation 17

National Crime Authority report “Taken to the Cleaners : Money Laundering in Australia”,
[6]

Vol 1, December 1991

[7]
Commonwealth of Australia, Senate, Standing Committee on Legal and Constitutional
Affairs, (Reference : Financial Transaction Reports Act 1988), Sydney, Tuesday, 8 June
1993, (Official Hansard Report), pages 8 to 9.

See article by Bill Pheasant, “$57 million laundered - police”, in the Australian Financial
[8]

Review, 3 September 1993, page 9

Evan Thompson, “Dirty Money in Canada: our banks’ proactive stand”, Canadian Banker,
[9]

Vol. 97, No. 2 - March-April 1990.

[10]
US Federal Register, Vol. 58, No. 167, Tuesday, August 31, 1993, Proposed Rules,
Proposed Amendment to the Bank Secrecy Act Regulations Relating to Record keeping for
Funds Transfers and Transmittals of Funds by Financial Institutions, at 46015

See the article by David A. Chaikin, “Investigating Criminal and Corporate Money
[11]

Trails” in “The Money Trail - Confiscation of Proceeds of Crime, Money Laundering and
Cash Transaction Reporting”, The Law Book Company Limited, Sydney, 1992, at pages 275
and 281.
[12]
Cash Transaction Reports Amendment Bill 1991
[13]
Commonwealth of Australia, Parliamentary Debates, House of Representatives, Daily
Hansard, Tuesday, 15 October 1991, p 1936.
[14]
Commonwealth of Australia, Parliamentary Debates, House of Representatives, Daily
Hansard, Tuesday, 5 November 1991, p 2330

The AUSTRAC report titled “International Transfer of Funds - Wire Transfers To and
[15]

From Australia”, was presented to a combined meeting of banking and law enforcement and
revenue agency senior executives in February 1990.
[16]
SWIFT is the acronym for the Society For Worldwide Interbank Financial
Telecommunications which is a worldwide communications network linking member banks
and some non-bank institutions into one network. Each interbank message is transmitted over
dedicated lines through a switching centre. The network and its connected services enable
users to transmit between themselves, international payments, statements and other
transactions associated with international finance. The number of member banks and
countries to which SWIFT is transmitted are increasing. SWIFT value messages into and out
of Australia presently total approximately 4 million per year.
[17]
Telex is generally a paper based telegraphic transmission which is increasingly being
processed through the electronic information technology systems of the Cash Dealers in
Australia. The use of telex is decreasing as new members and countries are linked to SWIFT.
[18]
Proprietary systems are similar to the SWIFT networking type system. They are generally
systems developed by major international banks where a customer purchases software and
leases communications lines from the system proprietor to enable transactions to be
transmitted to the head office of the system proprietor overseas, either directly or via the
system proprietor 's office in Australia.
[19]
Some of the Cash Dealers have local area networks which are accessible by their overseas
branches. These dedicated links between a head office and an overseas branch/office operate
in a similar way to SWIFT and proprietary systems.
[20]
Commonwealth of Australia, Parliamentary Debates, House of Representatives, Daily
Hansard, Tuesday, 15 October 1991, p 1936.
[21]
Explanatory Memorandum to the Cash Transaction Reports Amendment Bill 1991 at page
7 ff.
[22]
Authorised Banks have been excluded by the legislation from reporting transactions
conducted on their own behalf. The Australian Prime Minister issued a statement in March
1992 which was referred to as the "One Nation Statement". That statement indicated that
non-authorised organisations could apply to the Reserve Bank to be considered for bank
branch status thus bringing them within the regulatory requirements of the Banking Act 1959.
Those organisations which have indicated an interest in making such application have been
licensed foreign exchange dealers and other Merchant Banks. Approval for bank branch
status would have the effect of including those organisations in the category of financial
institutions for the purposes of the FTR legislation. Some regulatory controls are already in
place for foreign exchange dealers in terms of requirements for licensing. Exemptions have
therefore been granted by the Director of AUSTRAC to those organisations who will likely
apply for such status. Those exemptions have been granted only until 31/12/93 and will be
reviewed prior to that date.
[23]
Cash Transaction Reports Regulations (Amendment), Statutory Rules 1992, No. 320
[24]
Financial Transaction Reports Act 1988 - Section 4

See Alabama Law Review, Vol 44, Spring 1993, No. 3, John J Byrne, “The Bank Secrecy
[25]

Act: Do Reporting Requirements Really Assist the Government?” at page 801. Bank Records
and Foreign Transactions (Bank Secrecy) Act, Pub. L. No. 91-508, 84 Stat. 1114 (1970)
(codified as amended in scattered sections of U.S.C.)
[26]
US Federal Register, op cit, at 46014
[27]
Ibid, at page 46022.
[28]
Ibid, at 46014 which refers to the Annunzio-Wylie Anti-Money Laundering Act 1992,
Title XV of the Housing and Development Act 1992.

Financial Crimes Enforcement Network (FinCEN), “Trends - A Bulletin of Financial

[29]

Crimes and Money Laundering”, Fall 1992, page 2.

[30]
US Federal Register, op cit, at 46018

Alabama Law Review, Vol 44, Spring 1993, No. 3, John J Byrne, “The Bank Secrecy
[31]

Act: Do Reporting Requirements Really Assist the Government?” at page 803.

Australian Bankers’ Association, February 1993, Submission to the Senate Standing

[32]

Committee on legal and Constitutional Affairs Inquiry into the Cash (Financial) Transaction
Reports Act 1988, page 1.

See the article by John J Byrne, “Money Laundering Legislation in the United States - A
[33]

Perspective from The Banking Industry”, in “The Money Trail - Confiscation of Proceeds of
Crime, Money Laundering and Cash Transaction Reporting”, The Law Book Company
Limited, Sydney, 1992, at page 370
[34]
US Federal Register, op cit, at 46017
[35]
US Federal Register, op cit, at 46014
[36]
US Federal Register, op cit, at 46015
[37]
David A. Chaikin, op cit, page 276.
[38]
The terms of reference provided to the Senate Standing Committee on Legal and
Constitutional Affairs by the Parliament of the Commonwealth of Australia included, inter
alia :

“The operation and effectiveness of the Cash Transaction Reports Act 1988 (‘the Act’), with
particular reference to :

(e) the cost-effectiveness of the Act, including the possibility or desirability of cost recovery”

Australian Bankers’ Association, February 1993, Submission to the Senate Standing

[39]

Committee on legal and Constitutional Affairs Inquiry into the Cash (Financial) Transaction
Reports Act 1988, page 14.
[40]
Australian Transaction Reports and Analysis Centre, Annual Report 1992/93, at page 36.

See “AUSTRAC and the ATO - A Submission to the Senate Standing Committee into
[41]

Legal and Constitutional Affairs - A review of the operation and effectiveness of the
Financial Transaction Reports Act 1988”, May 1993, at page 1.
[42]
Australian Transaction Reports and Analysis Centre, Annual Report 1992/93, at page 18.
[43]
Ibid, pages 16 to 17. Mr Sherman is the immediate past-President of the Financial Action
Task Force on Money Laundering - an international group of the top 26 financial countries in
the world formed in 1989 following the G7 Summit in Paris.