AUSTRAC v Tabcorp: A case study in enforcement action by Australia’s financial crime regulator

Abstract

The Australian case Chief Executive of the Australian Transaction Reports and Analysis Centre v Tabcorp (AUSTRAC v Tabcorp), which settled in 2017, was an important case in Australian regulatory history. At the time AUSTRAC v Tabcorp commenced, it was highly unusual for Australia’s financial crime regulator, AUSTRAC, to take major reporting entities to court over breaches of anti-money laundering and counter-terrorism financing (AML/CTF) legislation. This paper uses AUSTRAC v Tabcorp as a case study through which to examine how Australian reporting entities investigate and report on financial crime activity, and AUSTRAC’s expectations of AML/CTF programmes. The paper explains the background and context to AUSTRAC v Tabcorp, describes the main financial crime issues identified in AUSTRAC’s pleadings, summarises the key legal issues in the judgment and analyses the significance of AUSTRAC v Tabcorp from a financial crime risk perspective. Australia’s financial crime compliance framework is the subject of extensive analysis by industry and government bodies; however, the underlying criminal activity which the framework is designed to prevent is less well understood. This paper addresses both the legal issues raised by AUSTRAC v Tabcorp, and the financial crime activity disclosed in AUSTRAC’s pleadings. In this way, it provides a practical understanding of Australian financial crime compliance obligations, and the real-world consequences when these obligations are not met.