A Shifting Landscape: The Global AML Challenge
Money laundering is evolving at an unprecedented rate, driven by geopolitical instability, organised crime, technological advances and the increasing sophistication of illicit financial networks. Governments worldwide are intensifying their efforts to disrupt these operations, with financial service providers—including accountants—coming under greater scrutiny.
Key Global Trends Driving AML Enforcement
Geopolitical Tensions and Sanctions Expansion
- The Russian invasion of Ukraine in 2022 triggered sweeping sanctions, with over 11,000 restrictions imposed by 46 countries.
- The Israel-Gaza conflict in 2023 renewed focus on terrorism financing, alongside existing sanctions on Iran, Syria, and North Korea.
- Sanctions lists are expanding rapidly, requiring firms to strengthen due diligence processes to avoid exposure to restricted entities.
Autocratic Regimes and Wealth Migration
Increasing numbers of high-net-worth individuals (HNWIs) are relocating funds from politically unstable or authoritarian-leaning nations.
In 2024, 122,000 HNWIs moved countries, along with their wealth, with Australia ranking among the top destinations.
While not all funds are illicit, the movement of wealth across borders heightens the risk of money laundering through professional services.
Organised Crime Adapts to New Opportunities
INTERPOL has identified organised crime as one of the top global threats, with criminals leveraging new financial instruments and regulatory loopholes.
In Australia, Taskforce Avarus was launched in 2023 to combat large-scale money laundering through real estate and corporate structures.
Accountants remain a primary target for criminals seeking to legitimise illicit funds through professional services.
The Rise of AI and Deepfake Fraud
Synthetic identities and AI-driven fraud techniques are making money laundering harder to detect.
In 2023, deepfake technology was used in an attempt to impersonate a high-profile business executive and authorise fraudulent transactions.
Enhanced biometric and digital verification measures will become critical to preventing sophisticated financial crime.
Cryptocurrency’s Enduring Role in Money Laundering
Despite high-profile scandals, cryptocurrency remains a preferred tool for laundering illicit funds.
In 2022 alone, illicit cryptocurrency transactions surged to $23.8 billion, a 68% increase from 2021.
The decentralised nature of crypto continues to challenge regulators and AML enforcement agencies worldwide.
Implications for Australian Accountants: Expanding AML Obligations
As the global financial crime landscape intensifies, Australia is set to expand its Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Act to capture accountants. This regulatory shift means accountants will need to adopt stronger customer due diligence (CDD), enhanced due diligence (EDD) for high-risk clients, transaction monitoring, and reporting suspicious activity to AUSTRAC.
Although the final rules have not been released yet, below are the typical captured activities that accountants should think about and how they pose an AML risk.
Captured Activities and Key AML Risks for Accountants
Company and Trust Formation
- Criminals use shell companies and trusts to hide illicit ownership.
- AML Risk: Complex structures obscure beneficial ownership, enabling money laundering and terrorism financing.
Nominee Directorships and Trusteeships
- Accountants acting as nominee directors or trustees may unknowingly facilitate financial crime.
- AML Risk: Criminals exploit legitimate professionals to distance themselves from illicit activities.
Providing Business or Registered Addresses
- Fraudulent businesses may use an accountant’s office to appear legitimate.
- AML Risk: Facilitates anonymity and makes tracking illicit transactions difficult.
Managing Client Funds and Assets - Holding or transferring client funds exposes accountants to money laundering risks.
- AML Risk: Criminals use legitimate accounts to integrate illicit funds into the financial system.
Engaging in or Instructing High-Value Transactions
- Property and business transactions can be exploited for money laundering.
- AML Risk: Criminals disguise the true purpose of transactions through professional services.
Cryptocurrency Exposure in Accounting
- Increased use of crypto in financial services raises AML concerns.
- AML Risk: Anonymity and global access make crypto attractive for laundering illicit funds.
Conclusion: The Time to Act is Now
With Australia on the brink of expanding its AML regulations to accountants, the profession must prepare for greater compliance obligations. The evolving global financial crime landscape makes it clear: accountants are a critical frontline defence against money laundering.
Proactive preparation will not only ensure compliance but also protect firms from the reputational and financial risks of inadvertent involvement in illicit activities.
About First AML
This article is not only written from the perspective of a technology provider, but also from the lens of compliance professionals. Prior to releasing Source, First AML’s orchestration platform, we processed over 2,000,000 AML cases ourselves. Understanding the acute problem that faces firms these days as they try to scale their own AML, is in our DNA.
That's why Source now powers thousands of compliance experts around the globe to reduce the time and cost burden of complex and international entity KYC. Source stands out as a leading solution for organisations with complex or international onboarding needs. It provides streamlined collaboration and ensures uniformity in all AML practices.
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