On Mon 31.10.2016, AUSTRAC published the first money laundering and terrorism financing (ML/TF) risk assessment into Australia’s superannuation sector. The Minister for Justice, Michael Keenan, said the assessment was developed in close partnership with the superannuation industry and identified a range of opportunities for the sector to further harden itself against threats.

AUSTRAC identified higher than anticipated risks of fraud, cybercrime and terrorism financing in the superannuation sector, and has assessed the overall risk of ML/TF activity as medium. The report aims to develop awareness in the sector of these risks and help harden APRA-regulated superannuation funds against criminal activity.

The report identified fraud as by far the most commonly identified crime affecting super funds. Cybercrime in particular was identified as a key growing threat, with some super funds seeing almost daily attempts to hack accounts for information or funds access.

There were also many reported cases of falsified documents and attempted illegal early release of superannuation savings.

A range of other suspicious matters, including potential tax evasion, unusual account activity, unusually large transfers and unauthorised account transactions were also reported.

The Minister said terrorism financing is a limited but emerging threat. Foreign terrorist fighters, who are generally self-funded, have accessed superannuation accounts to finance their activities, he said. In the 2-year sample period, 19 suspicious matter reports (6%) related to potential terrorism financing. These reports were submitted by 9 superannuation funds, in relation to amounts worth $259,790 in total.

While small in number, some of these suspicious matter reports were assessed by AUSTRAC as highly likely to be related to terrorism financing and were referred to law enforcement and national security agencies for further investigation.

[Austrac – Report] [Minister’s Media Release] [LTN 210, 31/10/16]