<http://australianit.news.com.au/common/print/0,7208,11969712%5E15342%5E%5Enbv%5E15306%2D15319,00.html> Australian IT Austrac beefs up for e-crime fight Simon Hayes JANUARY 18, 2005 INTERNET payment systems such as PayPal and e-gold face extra regulation as part of a legislative package designed to stop terrorists and criminals laundering cash through offshore bank accounts. Proprietary payments systems - which escape Australian transactions reporting requirements because the actual transactions take place overseas - are a prime target of laws being drafted by the Federal Attorney-General's Department. The laws follow a parliamentary inquiry into cybercrime last year, which was told that the internet had made it easier for criminal and terrorist money launderers to avoid surveillance. In a submission to the Joint Committee on the Australian Crime Commission, Austrac warned some cyber-transactions were beyond its reach. "It's essential that Australia's regulatory and law enforcement, revenue and national security programs are adequately supported by appropriate legislation, and to ensure that Australia's anti-money-laundering and counter-terrorist financing systems are not compromised," the organisation said. Austrac keeps an eagle eye on traditional funds transfers, scanning some nine million telegraphic transactions in and out of Australia each year, but those using internet-based systems escape the net. While Australian banks are required to report transactions to Austrac, the agency has warned of "uncertainty" about whether internet payments were reportable, as the bank transaction often took place overseas. Austrac acting director Liz Atkins said she hoped the new legislation - to be released in draft form soon - would plug those gaps. "It's a grey area as to whether internet payments systems are caught as cash dealers," she said. "Currently the answer is no, they don't have to report. "The question is whether the new legislation should cover them." Ms Atkins said Austrac was concerned criminals could operate internet payment systems in conjunction with offshore bank accounts and credit cards, purchasing goods and services in Australia, but settling the bills overseas, beyond the reach of Austrac. A spokesman for Attorney-General Philip Ruddock said the draft bill would be released early this year. "Officers from the Attorney-General's Department and Treasury have been exploring the extent to which these services operate in the Australian financial system and what further regulation, if any, may be required to comply with the Financial Action Taskforce recommendations" he said. PayPal managing director Andrew Pipolo said the organisation - owned by internet auction giant eBay - was committed to working with law enforcement agencies. "PayPal is obliged under the Financial Transactions Reporting Act to report suspicious transactions," he said. "Both eBay and PayPal work closely with law enforcement agencies to assist them in investigating and capturing online criminals. "We have zero tolerance to any wrongdoing on PayPal. "There are more than 1000 employees at eBay and PayPal dedicated to making eBay one of the safest places in the world to trade." -- ----------------- R. A. Hettinga <mailto: rah@ibuc.com> The Internet Bearer Underwriting Corporation <http://www.ibuc.com/> 44 Farquhar Street, Boston, MA 02131 USA "... however it may deserve respect for its usefulness and antiquity, [predicting the end of the world] has not been found agreeable to experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'