Federal Court warns AUSTRAC it is in danger of being a ‘soft touch’

afr.com:

The nation’s financial crimes agency is in danger of being a “soft touch” because it has always reached an agreement with companies found to have acted inappropriately, the Federal Court has warned.

Reluctantly signing off on a $450 million penalty for Crown Resorts’ “very egregious” breaches of anti-money laundering laws on Tuesday, Federal Court judge Michael Lee suggested AUSTRAC’s track record for settling cases instead of litigating put it at risk of being played by wrongdoers.

Crown’s supposed inability to pay a $450m fine has been questioned by the Federal Court. Wolter Peeters

Justice Lee had previously criticised a payment plan that did not require Crown to pay any interest agreed by regulator for the penalty – after the casino giant claimed it could not afford to pay the full amount upfront – and warned it cheapened the fine by $44 million.

He ultimately accepted the deal but made the parties agree to speed up the repayment schedule if Crown’s cash position allowed, ordering that the company give AUSTRAC its financial reports and an affidavit from its CEO explaining whether it could repay the fine and, if not, why not, annually.

In the two-day hearing, Justice Lee pointed out that AUSTRAC had “never litigated a contested hearing or advocated for orders different to that proposed to contravener on final hearing”.

He said that a “sophisticated contravener” – which Crown is, given its size and the range of legal disputes it has been involved in – would know that “if the proposed penalty falls within the lower end of a permissible range, the court will generally accept the proposed penalty even if the court may have been disposed to select a higher figure”.

This created risked that companies which had breached the