AUSTRAC not to take further action regarding Afterpay
The Australian Transaction Reports and Analysis Centre (AUSTRAC) today announced the completion of the external audit of fintech company Afterpay.
Let’s recall that, in June 2019, AUSTRAC ordered the appointment of an external auditor to Afterpay to examine its compliance with the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (the AML/CTF Act).
This action followed a period of ongoing engagement with Afterpay where AUSTRAC has identified concerns with its compliance. The external auditor had to examine Afterpay’s governance and oversight of decisions related to its AML/CTF framework, the procedures for identification and verification of customers, as well as the suspicious matter reporting obligations.
Today, AUSTRAC said that, in response to the findings and recommendations identified in the external audit report, Afterpay has uplifted its AML/CTF compliance framework and financial crime function. The company has also completed all remediation necessary to ensure compliance.
After considering the report and the response by Afterpay, AUSTRAC says it has decided not to undertake further regulatory action.
AUSTRAC has reiterated the importance for Afterpay to meet its compliance obligations in the future, and will continue to work with Afterpay to ensure they understand their compliance obligations and role in fighting financial crime to protect the Australian community from harm.
It is also a reminder to new and emerging financial services businesses that they may have obligations under the AML/CTF Act.
Start-up ventures and technology-based financial businesses must consider whether they have AML/CTF obligations and if they do put in place systems and controls that identify and mitigate money laundering and terrorism financing risks.
Afterpay’s Chair Elana Rubin commented:
“We are pleased to have received AUSTRAC’s decision following the external audit as it provides the Company and its stakeholders with certainty and acknowledges the work the Company has undertaken to strengthen its AML/CTF compliance.”
“The external audit provided Afterpay with the opportunity to better understand our obligations and to improve the way we manage our AML/CTF risks.”
“We will use these learnings and our ongoing engagement with AUSTRAC to continue enhancing our AML/CTF framework as the business continues to grow.”