Australia’s counter-terrorism financing and anti-money laundering regulator has set its sights on financial services firm Western Union over concerns regarding the management of high-risk payments made over the platform.
AUSTRAC announced it was investigating Western Union Financial Services Australia Pty Ltd and The Western Union Company on September 1, noting that it was not investigating any of the company’s affiliates.
The regulator’s investigation will focus on Western Union’s ability to “identify, assess and mitigate money laundering and terrorism financing risks” while also looking to the company’s transaction monitoring program to ascertain how well it can identify transactions linked to child sexual exploitation and terrorism financing.
In addition, Austrac will investigate Western Union’s overall governance arrangements.
“Western Union provides important services to customers in Australia and around the world who need to move money across borders, including via cash payments,” AUSTRAC CEO Brendan Thomas said in a statement.
“Payment service providers are internationally recognised as high-risk for criminal exploitation. We have launched this investigation because we have serious concerns that Western Union has failed to adequately manage those risks.”
AUSTRAC had previously identified “significant weaknesses” in how several businesses monitored transactions linked to child sexual abuse material.
"The risks facing this sector include terrorism financing, human trafficking, fraud and child sexual exploitation,” Thomas said.
"Strong compliance systems and timely suspicious matter reporting are critical to detecting and disrupting criminal activity. That's what AUSTRAC expects from every business operating in this sector."
Western Union has committed to addressing any issues raised by AUSTRAC.
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