AUSTRAC Reporting Entity Forum — Remittance Service Providers
AUSTRAC's recent supervision findings specific to remittance service providers and exchanges — including findings from the 2024 Compliance Report.
About this webinar
In May and June 2025, AUSTRAC hosted the Reporting Entity Forum. The remittance session covered both Remittance Network Providers (RNPs) and independent remittance dealers. AUSTRAC noted the findings are relevant to all reporting entities in the remittance network space.
AUSTRAC's regulatory activities in the sector
Enhanced Customer Due Diligence (ECDD) campaign — Remittance Network Providers
AUSTRAC issued a questionnaire to selected RNPs to understand how they were meeting their enhanced CDD obligations. Some entities were required to provide supporting documentation. Individual feedback was then provided.
Non-reporting campaign — independent remittance dealers
AUSTRAC identified dealers who had completed their compliance report stating they provided a designated service, but had submitted no reports for extensive periods. The campaign involved phone interviews with tailored questionnaires. Responses triggered tailored actions ranging from letters to site visits.
Key areas for improvement — Remittance Network Providers
Suspicious Matter Reporting
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AUSTRAC said SMR reporting by the remittance sector remains low. Some entities do not understand their SMR obligations, there is limited understanding of triggers and flags, and there are inadequate processes to identify and investigate suspicious activity. AUSTRAC said: "Submitting poor quality reports, or failing to submit reports, is a breach of your compliance obligations." There is no dollar threshold for SMRs.
Suspicious activity indicators for remittance:
- •Inconsistent information across identification documents
- •Sudden and significant increases or decreases in account activity with little to no logical explanation
- •Frequent transactions made just below the $10,000 reporting threshold (structuring)
- •Transactions inconsistent with established patterns of behaviour
- •Remittance of funds to high-risk jurisdictions or countries where formal banking channels may not operate
Know Your Customer (KYC) Verification
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AUSTRAC observed instances where entities relied on personal or social connections — community association or word-of-mouth — for KYC and ECDD processes. AUSTRAC said: "This practice does not meet the requirements under the AML/CTF Act. Customer identity must be verified using reliable independent documentation or electronic data sources." AUSTRAC acknowledged it can be uncomfortable to ask customers for certain personal details, but said collecting this information is essential.
ECDD Program
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AUSTRAC found: failure to document the ECDD program within the AML/CTF program (meaning the entity could not demonstrate when ECDD would trigger), and inconsistent collection of source of wealth information. From 2024 data: 84% reported conducting ECDD, but only 36% sought senior management approval to provide a designated service, and only 43% sought approval to continue a high-risk relationship.
International Funds Transfer Instruction (IFTI) reporting quality issues — independent remittance dealers
AUSTRAC identified common quality issues with International Funds Transfer Instruction (IFTI) reports:
Missing address details
Full address required for both transferor and transferee. Must be a residential or business address — not a PO Box.
Missing ID issuer details
In addition to ID type and number, you must report who issued the ID. E.g. a NSW driver's licence issuer is "Transport for New South Wales".
Missing electronic data source
You must state which electronic source was used to verify the customer's ID online — e.g. "World Check".
Incorrect country details
Source and destination country must not be reported as the same location. For an outgoing IFTI, Australia cannot be both source and destination.
Missing beneficiary institution details
Outgoing reports were found missing details of the beneficiary institution or dispersing entity — name and/or address.
Missing or repeated TRNs
Each transaction must have a different Transaction Reference Number. Different information is required depending on whether the IFTI is outgoing or incoming.
2024 Compliance Report data — remittance sector
76%
reviewed or updated money laundering & terrorism financing (ML/TF) risk assessment
23%
did so in response to AUSTRAC feedback
84%
reported conducting ECDD
36%
sought SM approval to provide a designated service
43%
sought SM approval to continue a high-risk relationship
38%
outsource one or more AML/CTF functions
Disclaimer: Published by GetPost Labs Pty Ltd for educational purposes only. Not legal, financial, or compliance advice. Summary of publicly available AUSTRAC content — original: AUSTRAC Reporting Entity Forum — Remittance Service Providers, 17 July 2025. Refer to austrac.gov.au. Errors: sumit@getpostlabs.io