It is the responsibility of the financial services sector, not government, to ensure that criminals do not exploit business for money laundering, according to the Parliamentary Secretary to the Treasurer.

As the corporate sector’s ire continues to be raised by what it sees as overly prescriptive, onerous regulation, Chris Pearce said industry participants could avoid “the need for overly restrictive regulation by sensibly managing their risks”.

He added that when the government finally revealed its hand on AML reform, it would be up to business to develop and implement AML programs “that complement legislative reforms”. He offered no date for the publication of the government’s plans.

Anecdotal evidence suggests the financial services sector is trying to develop frameworks for the new regime, a task that is near impossible while the government continues to stall.

“We’ve had a 12-month risk assessment done on AML, but what’s the point? We have very little idea what the government is planning,” said one senior risk management head in a financial services firm.

While much can be interpolated from the Financial Action Task Force’s 40 recommendations on money laundering, which Australia is attempting to comply with, there are fears that the process will be stalled by regulatory and enforcement confusion. Austrac, at present a financial intelligence unit, will be responsible for enforcing the new regime.

While the banking and financial markets communities have been subject to AML rules both here – under the Financial Transactions Reporting Act– and internationally for some time, the new regime will represent a marked change.

“In Australia there is a very strong culture around the narrow FTRA regime,” said one AML expert. “It has created a dominant culture around what AML is and what you are required to do. But the new law will take Australia away from that interpretation to a broader base.”

But despite AML being the responsibility of business, Pearce said the government was moving to protect Australia’s “enviable” reputation through its reforms, despite the delay resulting in the country being placed on some money laundering watch lists.