The Australian Transaction Reports and Analysis Centre (AUSTRAC) has ordered the appointment of an external auditor to assess whether payment platform Airwallex Designated Business Group (Airwallex DBG) is meeting its anti-money laundering and counter-terrorism financing obligations.

AUSTRAC is Australia’s national financial intelligence unit and AML/CTF regulator, overseeing banks, payment platforms, remittance providers, gambling operators and other designated services. Its supervisory powers include external audit orders, enforceable undertakings and civil penalty proceedings, depending on the circumstances of each case.

The order was issued on 22 January under section 162 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act), which allows the regulator to require a reporting entity to appoint an external auditor to examine its compliance with AML/CTF obligations.

Under the order, an independent auditor will be required to assess Airwallex DBG’s compliance and report its findings directly to AUSTRAC within 180 days, with the review conducted at Airwallex’s expense.

Audit scope under section 162

AUSTRAC said the audit will examine whether Airwallex DBG maintains and complies with an AML/CTF program, conducts ongoing customer due diligence and meets its suspicious matter reporting obligations under the AML/CTF Act. In its media release, the regulator said the audit was ordered due to suspected compliance failures.

AUSTRAC chief executive officer Brendan Thomas said the regulator takes such action where it identifies potential deficiencies, stating that “we take this action where we suspect serious non-compliance, because we expect businesses to be actively managing their AML/CTF obligations.” He said AUSTRAC’s concerns relate in part to the nature of Airwallex’s operations as a global payments provider, adding that “as a global payment platform that facilitates the transfer of funds to multiple jurisdictions, AUSTRAC is concerned that Airwallex’s transaction monitoring program has not been attuned to the full range of risks it faces.” Thomas also marked that the regulator’s concerns extend to how suspicious matters are identified, reported and overseen within the business.

Airwallex Melbourne office. (Source: Airwallex)

Regulatory framework

The audit order applies to Airwallex DBG, which is referenced in the notice as Airwallex Pty Ltd. Under section 162 of the AML/CTF Act, a reporting entity must nominate an external auditor for AUSTRAC’s approval and provide access to systems, records and personnel required to complete the review.

Thomas said effective compliance requires active governance involvement, stating that “AML/CTF compliance must be actively overseen by boards and senior management, and adequately resourced, to ensure money laundering risks are identified and managed.” AUSTRAC said the outcome of the audit will assist the regulator in determining whether further regulatory action is required.

Company position

Airwallex operates a global payments and financial infrastructure platform providing cross-border payment and multi-currency services. As a reporting entity under Australia’s AML/CTF framework, it is required to comply with obligations relating to customer identification, transaction monitoring and suspicious matter reporting.

In a statement issued on 22 January, Airwallex said it would cooperate fully with the audit, stating that “Airwallex will be co-operating fully with AUSTRAC’s requirement that an external auditor review Airwallex’s Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) compliance program.” The company said it welcomed the review as “a transparent opportunity to independently validate our AML/CTF program,” adding that it is “confident that our AML/CTF compliance program is fit for purpose and necessary controls are in place that adequately address all areas of risks facing our business.”

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