AUSTRAC eyes Perth Mint
The federal financial crimes watchdog is investigating the state-owned Perth Mint.
The Perth Mint is the world's largest producer of newly mined gold, processing around 10 per cent of annual global gold production, and minting the vast majority of gold mined in Australia.
It has a yearly turnover of more than $26 billion and holds around $6 billion on behalf of its clients, including central banks, sovereign wealth funds and individuals in over 130 countries.
It has been described as a massive commercial safe deposit box, and allows clients around the world to trade gold and silver digital certificates - which are backed by physical Perth Mint gold/silver - through an app called GoldPass.
All deposits are underwritten by the WA government, meaning that if any of the gold or silver goes missing, taxpayers will have to cover it.
The financial crimes watchdog, AUSTRAC, is concerned that the Perth Mint has not kept its compliance standards, and may have breached criminal laws and provisions of transaction reporting laws.
AUSTRAC has ordered a sweeping audit of the processes and records for the owner of the Perth Mint; a company called Gold Corporation.
The financial crime agency says it has “reasonable grounds to suspect” that the Mint breached criminal provisions of the Anti-Money Laundering and Counter-Terrorism Financing Act by running an unregistered remittance business.
The company can be seen as a remitter because it moves money or property on behalf of a client.
Under the anti-money laundering law, Gold Corporation has to have a compliance program in place, undertake risk assessments, do customer due diligence and generally monitor its vulnerabilities.
Without the proper regulatory checks and processes, it is unclear whether clients might be using the Perth Mint's services for illegal means.
The issues were reportedly discovered early last year, and its new CEO, Jason Waters (who was appointed in April this year) says the organisation has been working to rectify the issues, claiming “the Perth Mint is constantly identifying areas of improvement”.
AUSTRAC will soon appoint an external auditor who will have 180 days to report back on its customer due diligence program and compliance with suspicious matter reporting obligations.
AUSTRAC chief executive Nicole Rose says the agency “does not hesitate to take action where a business that we regulate is failing to satisfy their responsibility to protect themselves and Australia's financial system from criminal activity”.
WA Premier Mark McGowan initially brushed off the issues as the result of an “administrative” oversight before the March state election.
He has since reversed course, saying “my government is taking this matter very seriously”.