- Remittance firms face closure as banks set to close accounts
- By Elysse Morgan and Peter Lloyd
- 19/11/2014 Make a Comment
- Contributed by: JohnnyBGood ( 9 articles in 2014 )
Money transfer firms get funds from Australia to people overseas who often do not have bank accounts.
The international money transfer sector is uniting to try to stop Australian banks from shutting down the industry this month.
Remittance businesses in Australia help customers send $30 billion a year to recipients in 157 countries in largely small amounts to families.
The banks say the closure of the companies' accounts is in line with international laws to combat terrorism funding and money laundering.
However, Dianne Nguyen from the Remittance and Currency Providers Association said the industry is currently highly regulated by AUSTRAC and the Australian Crime Commission and the account closures will drive it underground.
"As a result of bank account closures and business closures are going underground, and going underground to operators who don't do the reporting and because they're not registered and slowing the intelligence associated with the reports," she said.
Remittance firms help people transfer cash, often to family members in developing countries who do not have bank accounts.
"I'll give you my example - we remit to Vietnam. Customers will come into our office and send $200, and the fee for that is $4, and we will remit those funds overseas and then have one of our service providers in Vietnam hand-deliver that," explained Ms Nguyen.
She said the closure of the last accounts for companies of her kind by Westpac on November 24 will kill the legimate and regulated part of the remittance industry.
AUDIO: Thousands of small business operators have bank accounts terminated (PM)
"It's going to hurt the community and businesses like mine personally will be forced to shut down as a result because without a banking facility, even to pay tax, pay rent in Australia, let alone do the money transfer piece of it, we won't be able to operate," she told the ABC's PM program.
"Lots of people will be unemployed. It's a sector that will ultimately find private arrangements underground, so there will be no transparency and visibility of where the money's going and how it's moving."
However, Australian banks say they have no choice but to stop transacting with money transfer businesses.
The Australian Bankers Association's Steven Münchenberg says local institutions have no choice but to comply.
"These are global rules, banks have no choice about these rules and we have to comply now," he responded.
"The problem with remittance agents is for us to comply with these rules we have to know every customer that the agent is dealing with and where all the money is going and that's just a level of burden that we can't sustain."
He argued that the banks can face fines and other legal recriminations if these rules are violated and money ends up in criminal hands.
Remittance businesses in Australia help customers send $30 billion a year to recipients in 157 countries in largely small amounts to families.
The banks say the closure of the companies' accounts is in line with international laws to combat terrorism funding and money laundering.
However, Dianne Nguyen from the Remittance and Currency Providers Association said the industry is currently highly regulated by AUSTRAC and the Australian Crime Commission and the account closures will drive it underground.
"As a result of bank account closures and business closures are going underground, and going underground to operators who don't do the reporting and because they're not registered and slowing the intelligence associated with the reports," she said.
Remittance firms help people transfer cash, often to family members in developing countries who do not have bank accounts.
"I'll give you my example - we remit to Vietnam. Customers will come into our office and send $200, and the fee for that is $4, and we will remit those funds overseas and then have one of our service providers in Vietnam hand-deliver that," explained Ms Nguyen.
She said the closure of the last accounts for companies of her kind by Westpac on November 24 will kill the legimate and regulated part of the remittance industry.
AUDIO: Thousands of small business operators have bank accounts terminated (PM)
"It's going to hurt the community and businesses like mine personally will be forced to shut down as a result because without a banking facility, even to pay tax, pay rent in Australia, let alone do the money transfer piece of it, we won't be able to operate," she told the ABC's PM program.
"Lots of people will be unemployed. It's a sector that will ultimately find private arrangements underground, so there will be no transparency and visibility of where the money's going and how it's moving."
However, Australian banks say they have no choice but to stop transacting with money transfer businesses.
The Australian Bankers Association's Steven Münchenberg says local institutions have no choice but to comply.
"These are global rules, banks have no choice about these rules and we have to comply now," he responded.
"The problem with remittance agents is for us to comply with these rules we have to know every customer that the agent is dealing with and where all the money is going and that's just a level of burden that we can't sustain."
He argued that the banks can face fines and other legal recriminations if these rules are violated and money ends up in criminal hands.
Source: https://www.abc.net.au/news/2014-11-19/remittance-firms-face-closure-as-banks-set-to-close-accounts/5902826
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