AUSTRAC has responded to enquiries by the Finance Brokers Association of Australia (FBAA) seeking clarity around whether new Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) laws may have unintentionally captured finance brokers and intermediaries.

Following the updated regulations that took effect from July 1, FBAA CEO Leo Gagic contacted AUSTRAC over concerns that certain finance broking activities, including commercial asset finance broking, could fall within the definition of ‘debt financing’ as a designated service under the act.

Following high level discussions between the association and regulator, AUSTRAC has now acknowledged the validity of the FBAA’s concerns, confirming that item 4 of table 6 may be worded broadly enough to potentially include commercial asset finance broking, while also recognising its current guidance does not explain its interpretation of the scope of ‘debt financing’.

Mr Gagic said the association acted quickly to seek clarity for brokers and he is pleased with the response. 

“AUSTRAC has acknowledged our valid concerns and advised it is actively considering the issue before clarifying its position.”

AUSTRAC has also advised that it does not expect finance brokers to begin working towards compliance until it publishes its position on the scope of ‘debt financing’ under the legislation.

“If the outcome is that finance brokering activities are within scope of the AML/CTF Act, we recognise that affected businesses will need time to work towards compliance, including establishing AML/CTF programs and training staff,” the regulator said.

“Brokers do not need to do anything now, and we will update the industry when we know more,” Mr Gagic said.