Season 7, Episode 8: Governance failure at the Perth Mint
The world's largest primary bullion producer, Australia's Perth Mint, has found itself at the centre of one of the country's biggest risk and compliance failures following a six-month investigation led by Thomson Reuters Regulatory Intelligence. The government-owned entity has found itself defending regulatory spot fires on a range of fronts. These include a major money laundering audit, answering parliamentary questions about sub-standard gold deliveries to Shanghai, defending a failure to register as a remitter in breach of criminal laws, and explaining a 25-year failure to comply with U.S. commodities laws.The internationally renowned mint has also come under scrutiny from the world's largest gold market, following allegations that the Perth Mint failed to prevent money laundering and terrorism financing through its precious metals supply chain. The London Bullion Market Association's review into Perth Mint will look at a range of "responsible sourcing" concerns, including compliance with international anti-money laundering, terrorism financing and sanctions laws. The state-owned Perth Mint has exposed taxpayers to a potential billion-dollar penalty for systemic anti-money laundering compliance breaches of federal law on thousands of occasions. This includes at least 5,000 strict liability cross-border funds transfer reporting offences. The penalty for the international funds transfer instruction (otherwise known as IFTI) reporting breaches carries a theoretical A$105 billion upper limit if AUSTRAC, the Australian Transaction Reports and Analysis Centre, chooses to litigate. AUSTRAC has ordered an independent expert to examine a raft of other breaches of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006. The case has now become a major political issue, with Opposition politicians and media commentators calling for an urgent royal commission into the mint's governance failures.From Regulatory Intelligence (behind paywall):Perth Mint in breach of U.S. commodities laws for 25 years, says internal report: http://go-ri.tr.com/kUtsCpPerth Mint's woes deepen as London Bullion Market Association investigates supply chains, laundering: http://go-ri.tr.com/BrpH9eOUTLOOK 2023-Australian regulators begin year with huge enforcement case load: http://go-ri.tr.com/sJ1aR3EXCLUSIVE: Perth Mint knew about AML problems in March 2021 -internal documents: http://go-ri.tr.com/gRjcODPerth Mint in AUSTRAC's crosshairs over suspected money laundering breaches: http://go-ri.tr.com/gqGstxANALYSIS: How a government became embroiled in a billion-dollar criminal gold laundromat: http://go-ri.tr.com/CPkOrZPerth Mint may have exploited registration loophole in AML/CTF Act, says WA government: http://go-ri.tr.com/W4Kw6JPremier speaks out on WA government's gold laundering scandal: http://go-ri.tr.com/sLwEEXGovernment taking gold laundromat allegations "very seriously", says WA Premier: http://go-ri.tr.com/sLwEEX Compliance Clarified is a podcast from Thomson Reuters Regulatory Intelligence.Listen to wide-ranging, insightful discussions on all things compliance for financial services firms. We delve into the hot topics of the day, the challenges faced and offer up practical ideas for emerging good practice. We de-mystify regulation and explore the art, as well as the science, of the ever-expanding role of the compliance officer. Enforcements, digital transformation, regulatory change, governance, culture, conduct risk – anything and everything impacting the compliance function is up for discussion.