CLOSURE OF MUCH NEEDED REMITTANCE PROVIDERS

We welcome announcement of progress from The Australian Remittance and Currency Providers Association (ARCPA) has made in recent weeks towards an industry model that allows Money Transfer Operators (MTOs) to continue operating.

Australian banks (big 4 and regional banks) and branches of foreign banks have closed bank accounts of remittance providers.  

 

One by one, banks have been closing accounts by informing remittance providers by letter. These letters have been sent to remittance providers with no prior warning that accounts would be closed.

 

Westpac is the last of the big 4 banks to close its doors to remittance providers, however the federal court will hear next week an application from a group of MTOs to block Westpac’s decision.

 

Labor supports a strong regulatory framework to ensure that remittance providers are not involved in money laundering or financing illegal activities. However, we do not believe a blanket closure of all accounts is either justified or a proportionate response.

 

Many communities without established banking networks or modern electronic transfer capabilities rely on remittance services particularly at this time of year to send money back to their families in developing nations.

 

Remittance services play a vital role in many migrant communities in Australia. They are the lifeblood of many communities right around the world.

 

Remittance services are in many cases the only way for many communities to support their families still living in their country of origin.

 

These include Pacific Islanders working in Australia that will be looking to send their hard earned money back to families at Christmas time.

 

A recent report by the Centre for International Finance and Regulation found that “community members working abroad who remit money home promote economic development and provide informal, family-based social protection. Remittances play a particularly important role in stabilising the [Pacific Islands] region.”

 

 

Without citing reasons for closure, banks have closed accounts and not provided more than one or two months’ notice even after requests for extension.

 

The Australian Remittance and Currency Providers Association (ARCPA) maintain that the remittance providers they represent have complied with all legislation and regulation relating to anti-money laundering and combatting terrorist financing.

 

The ARCPA has continued to provide reporting under the Anti-Money Laundering (AML) and the Counter-Terrorism Financing (CTF) compliance reporting to the Australian Transaction Reports and Analysis Centre (AUSTRAC) of over 84 million transactions per annum.

 

We welcome the statement from AUSTRAC;

 

“AUSTRAC encourages banks to continue to assess the particular risks relating to their customers in line with the risk-based approach. Further, AUSTRAC encourages banks to engage with alternative remitters on measures that the sector could take both immediately and in the longer term to meet banks' internal risk standards.”

STATEMENT MADE BY AUSTRAC

NOVEMBER 25, 2014

 

The payment of remittances goes to the core fundamental of people looking after their families, and why they go to work every day. To close all services in the manner in which has been done is not justified.

 

Australian banks should take note of the deep community concern on this matter and act accordingly.

 

We urge the Government to take action to ensure it is doing all it can to help the affected communities.

 

MONDAY, 22 DECEMBER 2014