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Australia: SVC risk and regulation

The Australian Transaction Reports and Analysis Centre (‘AUSTRAC’) has recently published its first ‘Money Laundering and Terrorism Financing Risk Assessment: Stored Value Cards’ (‘SVC Assessment’), which analyses the potential of stored value cards (‘SVCs’) to be used for money laundering or terrorism financing (‘ML/TF’) purposes. In the SVC Assessment, AUSTRAC assesses the ML/TF risk posed by the use of ‘above the threshold’ SVCs1 to be ‘medium’ and the Australian Minister for Justice, Michael Keenan, has stated that “the report serves as yet another tool […] to identify where preventive measures can be strengthened2.” Michael Anastas and Elizabeth Singleton of HWL Ebsworth explain how, while the SVC Assessment highlights certain threats and vulnerabilities on the basis of whether an SVC is ‘above the threshold’ or ‘below the threshold,’ factors such as reloadability, cross-jurisdictional use, ability to load with cash and acceptability all impact on an SVC’s risk rating. With the SVC Assessment identified as a potential catalyst for improvements in measures to combat ML/TF, Michael and Elizabeth ask if an ML/TF risk rating based on the stored value ‘threshold’ test is too broad, and instead whether other SVC features that contribute to the level of risk could serve as the basis for further reform.

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