The federal government’s $5bn Northern Australia Infrastructure Facility (NAIF), which is understood to be considering a coal railway loan application from Aurizon, has not finalised an anti-money laundering policy, despite being alerted to lenders’ obligations by lawyers more than a year ago.
Under the Anti Money Laundering and Counter-Terrorism Financing Act (AML/CTF Act) lenders like NAIF must report suspicious matters to the financial intelligence agency AUSTRAC if an entity inquires about, applies for or receives a loan and there is a reasonable suspicion such a loan is preparatory to an offence of money laundering, or is related to a money laundering investigation.
Lawyers from Environmental Justice Australia wrote to NAIF in September 2016 citing the AML/CTF Act and asked NAIF to explain how it would implement its obligations. NAIF’s response did not provide the requested information.
In response to questions on notice in Budget Estimates in October 2017 NAIF said it was “in the advanced stages of developing a comprehensive policy and procedures to ensure compliance with AML/CTF”.
AUSTRAC is prosecuting the Commonwealth Bank for offences under the same law.
“From the outset NAIF should have had appropriate systems and controls in order to determine whether loan inquiries might give rise to an obligation to report suspicious activity to AUSTRAC,” said EJA lawyer David Barnden.
“This situation raises questions about whether NAIF, after operating now for more than 18 months, has adequate governance procedures.
“This appears to be a serious governance failure on the part of a public body that is charged with responsibly administering $5 billion of Australian taxpayers’ money.
“If NAIF’s board is not executing its duties appropriately, we would expect the Parliamentary inquiry into the governance and operation of NAIF to take notice and make findings in its report, which is expected to be tabled in the Senate in April 2018.”
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