AUSTRAC EU - Temporary Relief for Perth Mint on AML/CTF

AUSTRAC has accepted an enforceable undertaking (EU) from Perth Mint, the culmination of a year long audit which identified non-compliance with AML/CTF laws. Under the EU, the Perth Mint undertakes to, amongst other things, complete a remediation program (Remediation Program) by April 2025, under enhanced oversight from AUSTRAC and an independent third-party expert.

The Key Takeaways:

• AUSTRAC and the Perth Mint enter an EU in response to identified instances of AML-CTF non-compliance.
• The EU requires the Perth Mint to complete a Remediation Program addressing the non-compliance issues under supervision of AUSTRAC and an independent expert.
• The Perth Mint has avoided a fine of potentially hundreds of millions, if it successfully completes its Remediation Program by the deadline.
• The taxpayer-owned company has a history of non-compliances with the AML/CTF laws widely reported in the media. 

The Result

AUSTRAC considers the EU is the most appropriate regulatory response, because:

• of Perth Mint’s willingness to cooperate and proactively work to comply with its AML/CTF obligations; and
• it will “ensure that [the Perth Mint] commits sufficient resources to adequately implement its remediation program promptly, or risk further enforcement action”.  

Effectively, the EU brings about a faster, more immediate response to the identified regulatory failures which may not be delivered by litigation, addressing the risk of continuing harm.

Should the Perth Mint fail to comply with the terms of the EU, AUSTRAC may take further action by commencing civil penalty proceedings in the Federal Court of Australia. The prospect of civil penalty proceedings should certainly focus the Perth Mint on compliance with the EU.  For reference, CBA, Westpac and Crown have previously been fined $700 million, $1.3 billion and $450 million respectively for breaches of AML/CTF laws in AUSTRAC civil penalty actions.¹

The Perth Mint has commenced the Remediation Plan which goes as far back as March 2021 to address deficiencies in its AML/CTF framework. Following AUSTRAC’s review, the Perth Mint re-assessed the scope of its framework, and the plan was subsequently developed on 31 August 2022 into the Remediation Program in the EU. The Remediation Program covers the three following work streams, being 1) Customer Process Uplift; 2) Customer Data Remediation; and 3) Customer Lifecycle Technology and Data Uplift.

The Perth Mint’s issues regarding its compliance with AML/CTF laws have previously been widely reported in the media, and included²:

1. An instance in 2022 where a former bikie with multiple prior criminal convictions bought $27,000 worth of gold having been only asked for his drivers’ license.
2. Allowing clients of Euro Pacific Bank, which operated from tax haven Puerto Rico, to buy gold and store it in Perth Mint’s vault. At one point, Perth Mint allowed $25 million of Euro Pacific clients’ funds to be held in a single account, which meant those clients’ identities were kept secret from the mint; and
3. Failure to declare international movements of money to AUSTRAC, of which there were more than 5,000 such transactions in just 9 months.

What makes the Perth Mint’s AML/CTF breaches extraordinary is that it is wholly owned by the Western Australian State Government. That means Western Australian taxpayers would need to foot the bill of any penalties that the Perth Mint is required to pay in the event it does not meet the terms of the EU.

You can read more about this matter with the resources below.

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 ¹ _{https://www.austrac.gov.au/lists-enforcement-actions-taken}

‍² _{https://www.abc.net.au/news/2023-11-23/perth-mint-no-fine-compliance-issues-anti-money-laundering-laws/103141106}

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Read More

The Enforceable Undertaking dated 21 November 2023 below:

https://www.austrac.gov.au/sites/default/files/2023-11/Enforceable%20Undertaking%20%28EU%29%20Gold%20Corporation%20-%20Perth%20Mint%20-%20November%202023.pdf

AUSTRAC’s media release below:

https://www.austrac.gov.au/news-and-media/media-release/austrac-accepts-enforceable-undertaking-gold-corporation

Perth Mint’s response below:

https://www.perthmint.com/news/media-announcements/corporate/the-perth-mint-welcomes-austrac-outcome/

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‍The contents of this article do not constitute legal advice and it is not intended to be a substitute for legal advice and should not be relied upon as such.  It is designed and intended as general information in summary form, current at the time of publication, for general informational purposes only.  You should seek legal advice or other professional advice in relation to any particular legal matters you or your organisation may have.