On Wednesday, December 7, the Australian Transaction Reports and Analysis Centre (AUSTRAC), known as Australian anti-money laundering regulator, will initiate civil penalty proceedings in the Federal Court against SkyCity Adelaide Pty Ltd (SkyCity), a leading South-Australia’s casino based in Adelaide, for alleged “serious and systematic non-compliance with Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) laws.”

The investigation:

The commencement of proceedings by AUSTRAC follows the conclusion of an enforcement investigation, which began in June 2021. SkyCity Adelaide was informed of the ongoing investigation.

Peter Soros, Deputy Chief Executive Officer at AUSTRAC, said: “The investigation was a result of an AUSTRAC proactive, industry wide compliance campaign that began in September 2019. AUSTRAC’s investigations into SkyCity had found systematic failures in its approach to anti-money laundering and counter-terrorism financing obligations.

“AUSTRAC’s investigation identified a range of circumstances where SkyCity failed to carry out appropriate ongoing customer due diligence. SkyCity also failed to develop and maintain a compliant anti-money laundering and counter-terrorism program, leaving it at risk of criminal exploitation.”

AUSTRAC’s lawsuit:

Today, AUSTRAC filed a claim in the Federal Court seeking civil penalties against SkyCity.

The Australian Transaction Reports and Analysis Centre (AUSTRAC) asserts: “SkyCity failed to appropriately assess the money laundering and terrorism financing risks it faced, including the likelihood and impact of those risks, and to identify and respond to changes in risk over time, did not include in its anti-money laundering and counter-terrorism financing programs appropriate risk-based systems and controls to mitigate and manage the risks to which SkyCity was reasonably exposed, Failed to establish an appropriate framework for Board and senior management oversight of the anti-money laundering and counter-terrorism financing programs, did not have a transaction monitoring program to monitor transactions and identify suspicious activity that was appropriately risk-based or appropriate to the nature, size and complexity of SkyCity, did not have an appropriate enhanced customer due diligence program to carry out additional checks on higher risk customers and did not conduct appropriate ongoing customer due diligence on a range of customers who presented higher money laundering risks”

Soros, added: “SkyCity’s ineffective approach to its AML/CTF program had left it vulnerable to criminal exploitation. The requirement for regulated entities to have appropriate AML/CTF controls and systems in place is not optional and should be taken seriously by all businesses regulated by AUSTRAC.

“AUSTRAC continues to work with SkyCity to ensure it complies with its obligations under the AML/CTF Act and to ensure it continues to meet its obligations in the future.

“This is the third civil penalty proceeding AUSTRAC has brought against businesses operating in the casino sector. It should serve as a warning to casinos and all other businesses regulated by AUSTRAC to take their AML/CTF obligations seriously and comply with the AML/CTF Act and AML/CTF Rules.”

The outcome remains to be seen as everything is now before the Federal Court of Australia.