Let’s Address Some AML/CTF Misconceptions

Misconception: If it’s not in our AML/CTF Program, we don’t have to do it.

The truth: Your AML/CTF Program needs to reflect your risks and AUSTRAC’s expectations.

The legislation requires reporting entities to maintain an AML/CTF Program that adequately identifies, mitigates and manages their money laundering and terrorism financing (ML/TF) risks.

In short, if you were investigated and AUSTRAC determined your risks were not properly identified or mitigated through policies and procedures, your program may be deemed non-compliant, even if you are following what your current program contains.

Misconception: Money laundering doesn’t happen in clubs.

The truth: The recreational spending of illegitimate funds is also money laundering.

The Crime Commission found that cleaning funds through gaming machines is not widespread because it is inefficient compared with other avenues criminals prefer to use. However, it did report that the recreational use of ill-gotten funds does occur, which is still considered money laundering under the Crimes Act.

Aside from our legislative obligations, no club wants to take in illegitimate funds or permit individuals to use their premises for unlawful activity. This is why AML/CTF requirements help protect clubs by supporting the identification and reporting of suspicious activity and, where necessary, the safe exclusion of individuals.

Misconception: Clubs must have an automated transaction monitoring system.

The truth: Not necessarily.

While it is a requirement to review your transactions to identify suspicious activity, this does not mean you need an expensive automated transaction monitoring platform reviewing transactions across machines.

Unfortunately, the data accessible from gaming machines and systems can lack the detail needed to provide highly accurate insights. Many clubs using these systems report high alert numbers but convert very few into SMRs.

Depending on your risks, it may be sufficient to regularly review cheque/EFT payment trends by customer, payout trends by staff member, or even total cash-in, turnover and cash-out figures day to day to identify anomalies from the averages you would expect.

What matters is whether your controls and systems are helping you identify, manage and respond to ML/TF risks. In clubs, this is often best supported through strong policies and procedures, staff training and robust customer due diligence practices.

Misconception: The Board must still approve changes to the AML/CTF Program.

The truth: Post-reform, this responsibility now sits with the senior manager/s.

Boards still play an important governance and oversight role, but responsibility for approving changes to the AML/CTF program now rests with the senior manager/s listed in your AML/CTF program.

This change ensures businesses can remain agile and adapt their approach to mitigating ML/TF risk. Making sure everyone understands their responsibilities helps keep your governance framework clear and compliant.

The takeaway is simple: don’t rely on assumptions. Challenge your understanding, review your controls regularly and make sure your AML/CTF program reflects the risks your club actually faces. Strong AML/CTF compliance starts with understanding the facts.

ClubSAFE provides a number of AML/CTF courses focused on the specific needs of clubs. ClubSAFE Premium members can enrol here, and all other members can enrol here.