2016 17

1 2016 17. AUSTRAC. Annual report Copyright The Commonwealth owns the copyright in all material produced by this agency. All material presented on this website is provided under a Creative Commons Attribution International licence, with the exception of: the AUSTRAC logo content supplied by third parties. The details of the relevant licence conditions are available on the Creative Commons website, as is the full legal code for the CC BY license. You may not reproduce or use this material in any way that suggests the AUSTRAC or the Commonwealth endorses you or any of your services or products. Attribution Material obtained from this publication is to be attributed to: AUSTRAC for the Commonwealth of Australia 2017.

2 Production and design: AUSTRAC Organisational Strategy & Communications team Index: Karen Gillen 4 October 2017. The Hon Michael Keenan MP. Minister for Justice Minister Assisting the Prime Minister for Counter-Terrorism Parliament House CANBERRA ACT 2600. Dear Minister For the purposes of section 226 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006, section 46 of the Public Governance, Performance and Accountability Act 2013, and section 63 of the Public Service Act 1999, I am pleased to submit the annual report on the operations of the Australian Transaction Reports and Analysis Centre for the year ended 30 June 2017. Yours sincerely Peter Clark A cting C HIEF EXECUTIVE OFFICER.

3 3 / 140. Contents CEO's review 08. Agency overview 14. Role and functions 15. Organisational structure 18. Outcome and programme 19. Our capabilities 20. International & Policy division 22. Operations division 24. Corporate division 26. Our performance 28. Annual performance statement 29. Annual performance statement supplementary analysis 56. Report on financial performance 71. / AUSTRAC annual report 2016 -17 / Contents Management and accountability 72. Corporate governance 74. External scrutiny 77. Management of human resources 78. Asset management 80. Purchasing 81. Consultants 81. Australian National Audit Office access clauses 82. Exempt contracts 83. Procurement initiatives to support small business 83.

4 Disability reporting mechanism 84. Freedom of Information 84. Advertising and market research 85. Ecologically sustainable development and environmental performance 85. Financial statements 86. Appendixes 118. Appendix A: APS employee statistics 120. Appendix B: Agency Resource Statements 2016 17 125. Appendix C: Expenses and Resources for Outcome for 2016 17 126. Appendix D: Glossary 127. Appendix E: List of requirements 128. Appendix F: Correction of material errors in previous annual report 133. Index 134. Contact details 140. 5 / 140. Our year $45 MILLION. in review RECORD CIVIL PENALTY ORDERED. AGAINST TABCORP. 12%. INCREASE. OUR DATA CONTRIBUTED TO: IFTI 2016 -17. International funds 2015-16.

5 379 transfer instructions 0 20 million 40 million 60 million 80 million 100 million 120 million Human Services TTR/SCTR 2016 -17. reviews Threshold transaction 2015-16. reports / Significant 17% cash transactions report 0 1 million 2 million 3 million 4 million 5million MORE THAN. TARGET. SMR/SUSTR 2016 -17. Suspicious matter 2015-16. $ reports / Suspect transaction reports 0 20,000 40,000 60,000 80,000. in savings from increased detection of welfare fraud 78% in SMRs submitted by superannuation sector since publication of sector risk assessment INCREASE. 27% 67%. INCREASE INCREASE. 783 20 4. INTELLIGENCE PRODUCTS PARTNER AGENCY SYSTEM METHODOLOGY BRIEFS RISK ASSESSMENTS. 783 intelligence products ACCESS We disseminated 20 We published 3 industry risk shared with law enforcement Partner agencies conducted methodology briefs to reporting assessments and 1 regional risk assessment.

6 / andAUSTRAC. intelligence annual partners. report million searches/ ofOur 2016 -17 our data. entities and partner agencies. year in review COUNTRIES HIGHLIGHTED IN GREEN HAVE SIGNED MOU'S WITH AUSTRAC. MOU'S SIGNED IN 2016 -17 IN BLUE. AAPP. PhilippinesAnti-Money Laundering Council- AUSTRAC Partnership Program PNGCC. Papua New Guinea - Combating Corruption Program 4. NEW MOU'S. SIGNED. IN 2016 -17. PAPP IndoARC. PPATK/AUSTRAC Partnership Program Indonesian Alternative Remittance Cash Courier Program 87. TOTAL MOU'S 80% 120% . growth in information exchanges between growth in exchanges between AUSTRAC and AUSTRAC and its Indonesian counterpart its Malaysian counterpart 3500. 3000 89% 3,255.

7 INCREASE FROM INTERNATIONAL. 2500. 2015-16 INTELLIGENCE. 2000 EXCHANGES. 1500. 1000. 500. 0. 2013-14 2014-15 2015-16 2016 -17. 188%. INCREASE. $36 MILLION. IN DEREGULATORY SAVINGS FOR INDUSTRY. 7 / 140. CEO's review Peter Clark Acting CEO. Peter is the Acting AUSTRAC Chief Executive Officer (CEO). Peter's substantive role is Deputy CEO International and Policy, where he has senior executive leadership of AUSTRAC's Strategic Intelligence & Policy and International Operations branches. Internationally, Peter chairs the Egmont Group's Information Exchange Working Group and is co-chair of the Financial Action Task Force's Risk, Trends and Methods Group..we have continued to support law enforcement and national security partners in our shared objective to protect the Australian community from terrorism and organised.

8 / AUSTRAC annual report 2016 -17 / CEO's review The past 12 months have been a period We have been forging new international of significant change and delivery for relationships. At the same time, we are AUSTRAC. We have harnessed the collective providing technical assistance and training knowledge and experience of industry to Association of South-East Asian Nations and government to deliver new insights partners to counter the threats facing into risks to the financial sector. The countries across the South-East Asia region. breadth of our work has expanded and our organisational tempo has increased. During the year, we farewelled our CEO, Our program to invest in our leadership Paul Jevtovic APM, whose leadership and and build a collaborative culture is yielding strong focus on organisational culture results.

9 Strengthened the foundations for the agency's recognition as a global leader AUSTRAC holds the view that Australians in anti-money laundering and counter- are best protected from the harms of terrorism financing. financial crime when the collective efforts and expertise of the private and public sectors are applied to addressing the Collaboration highest risks to the financial system. with industry Accordingly, we have mobilised our relationship with industry to generate new AUSTRAC's objective to create a public- understandings of sector and product- private partnership committed to based money laundering and terrorism combating serious financial crime and financing (ML/TF) risks.

10 We are working terrorism financing was realised in March with the financial sector to develop an 2017, with the formal launch of Fintel innovative regulatory model that will Alliance by the Minister for Justice and provide better and more tailored support to Minister Assisting the Prime Minister on our 14,000 reporting entities. Counter-Terrorism, the Hon Michael Keenan MP. Through the integrated focus of our intelligence and regulatory functions, Part of this comprised the establishment we have continued to support law of the Operations Hub for representatives enforcement and national security partners of the financial sector and government in our shared objective to protect the to share intelligence and expertise, to Australian community from terrorism and harden the financial sector and support law organised crime.