Australia remains rated Partially Compliant with Recommendation 16 of the FATF Standards, which addresses the need for accurate originator and beneficiary information to accompany wire transfers. This measure ensures traceability of funds and helps combat money laundering and terrorist financing. Despite earlier evaluations and some legislative progress, critical aspects of Recommendation 16 have not been fully brought into alignment with FATF requirements.

Key Deficiencies

Australia has not yet implemented updated requirements for intermediary and beneficiary institutions to verify and retain information related to wire transfers. The FATF highlighted that obligations under Recommendation 16 for verification, monitoring, and follow-up actions are still lacking. These gaps extend to money services businesses (MSBs), which are not yet required to implement key wire transfer protocols in line with international standards.

The application of the travel rule is not yet comprehensive. Although customer due diligence is conducted without a monetary threshold, this alone does not meet the full scope of FATF’s expectations under Recommendation 16, particularly where intermediary compliance and suspicious transaction detection are concerned.

Australia also lacks detailed guidance or enforceable measures that compel financial institutions to halt or reject non-compliant transactions. Furthermore, virtual asset service providers (VASPs) are not currently subject to the same wire transfer requirements, which is a growing concern as digital assets become increasingly prominent in cross-border payments.

Conclusion

Australia has made strides in other areas of its anti-money laundering framework but continues to fall short of full compliance with Recommendation 16. The absence of updated rules for intermediary and beneficiary institutions, coupled with limited implementation among MSBs and VASPs, significantly weakens the integrity of the wire transfer regime. As a result, the FATF maintains Australia’s rating as Partially Compliant, underscoring the need for legislative reforms and enhanced supervisory enforcement to meet global AML/CFT standards.