AUSTRAC says that in response to the findings and recommendations identified in the external audit report, Afterpay has improved its anti-money laundering and counter-terrorism financing compliance framework and financial crime function.

The Buy Now Pay Later vendor came under scrutiny from AUSTRAC, the Australian Government agency responsible for detecting, deterring, and disrupting criminal abuse of the financial system, early this year. The regulator says Afterpay has now completed all remediation necessary to ensure compliance.

According to a statement from Austrac, “On 12 June 2019, AUSTRAC ordered the appointment of an external auditor to Afterpay Australia Pty Ltd (Afterpay) to examine its compliance with the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (the AML/CTF Act).

“After considering the report and the response by Afterpay, AUSTRAC has decided not to undertake further regulatory action.”

At the time the auditor was announced, AUSTRAC said it would examine issues including:

  • Governance and oversight of decisions related to its AML/CTF framework
  • Identification and verification of customers
  • Suspicious matter reporting obligations
  • AML/CTF program, including the development of its money laundering and terrorism financing risk assessment

AUSTRAC states that it has reiterated the importance for Afterpay to meet its compliance obligations in the future, and will continue to work with the company to ensure it understands its compliance obligations and role in fighting financial crime to protect the Australian community from harm.

It is also a reminder to new and emerging financial services businesses that they may have obligations under the AML/CTF Act, according to the statement.

“Start-up ventures and technology-based financial businesses must consider whether they have AML/CTF obligations, and if they do, put in place systems and controls that identify and mitigate money laundering and terrorism financing risks.”

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