Austrac beefs up for e-crime fight

[R.A. Hettinga]

<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."



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R. A. Hettinga <mailto: rah at 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,
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experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'