The International Funds Transfer Instruction Report is an instruction document made in Australia for any property or amount of money to be available in a different country. You can also make it from another country to make money or property available in Australia. It is commonly known as the IFTI reporting. Also, it is sent either out of or into the country after a report is submitted to the AUSTRAC. This takes place within ten business days from the day of submission of the instruction.
In Australia, there are two main types of IFTI reports:
- Any institution that is not a licensed financial institution will deal with IFTI-DRAs, which involve a transfer of money or property. Institutions such as casinos or other service providers will come under this category of IFTIs.
- On the other hand, all financial institutions in the country are liable to make the IFTI-Es which apply to the transfer of money.
It might be beneficial to note that IFTI is part of AUSTRAC’s AML/CTF Act, which applies to all institutions that provide specific services in terms of money lending and credit.
It is through these acts, namely the FTR Act and the AML/CFT Act, that the AUSTRAC keeps money laundering, tax evasion, suspicious transactions and terrorism financing at bay. The FTR act is meant for businesses that deal with insurance services, trustees and individual business owners to screen their customers and keep the number of frauds to a minimum.
What Happens When Institutions Don’t Comply With The IFTI or the AUSTRAC?
Institutions and foreign bodies that don’t comply with the IFTI reporting or the guidelines set forward by the AUSTRAC will face heavy penalties. They will get most of their services revoked by the Australian government.
- You can issue a civil penalty order if the AUSTRAC moves its complaint to the federal court. If the complaint goes through, then the institution is liable to pay a hefty fine to the commonwealth depending upon the severity of the breach in the IFTI.
- If certain parts of the IFTI are violated, the Australian government can send infringement notices to the respective entities.
- The government will urge the entity to appoint an external auditor if the financial data has set forth anything that arises the suspicions of malpractice in monetary transactions. The report will highlight what the institution must look into if they want to contain the breach.
- AUSTRAC also has the authority to order a risk assessment for the whole entity or certain processes involved. A risk assessment can also be issued if AUSTRAC is not satisfied with the way the risk assessment was carried out initially.
Registration applications for the IFTI are rejected if the entity doesn’t meet certain criteria for the application. Some of these criteria can be but are not limited to:
- Improper running of the business or the institutions: This happens when the entity is more likely to be involved in money laundering or terrorism financing.
- If AUSTRAC is suspicious of the Businesses running money laundering schemes.
- If the governing unit is not satisfied with the way, the individual or the managing body runs the business or the institution.
- If the registration details are not filled in completely, or the entity falsifies any information to get the application.
- Lack of valid documents to prove or back up any of the information entered for the registration.
- The entity does not reply to further contact or any part of communication from the financial intelligence unit.
