Afterpay Touch (ASX: APT) has announced that its final audit report has been received and given to AUSTRAC, which is causing the share price to go nuts. The Afterpay share price is up 7.5% in early trading.
Afterpay is the owner of the popular “buy now, pay later” app. As of 2019, Afterpay had over 4 million registered users worldwide, making it one of Australia’s true technology success stories. Afterpay is trying to emulate its outstanding success in Australia by expanding its reach into the UK, using the ‘Clearpay’ brand name, and into the USA, where it has signed major social influencers to endorse its service.
Afterpay’s AUSTRAC Report
A few months ago, AUSTRAC instructed Afterpay to appoint an independent auditor to look at its anti money laundering / counter terrorism financing (AML/CTF) compliance.
Today, the company announced auditor Mr Neil Jeans had given the report to Afterpay and sent it to AUSTRAC.
The auditor’s report said that there was historic non-compliance and made recommendations about Afterpay’s ongoing AML/CTF compliance. But, the report states that a majority of these matters have been addressed with the remainder covered in the recommendations – Afterpay said it fully accepts them and is actioning all recommendations.
Within the auditor’s letter it was stated that the non-compliance was due to “being provided with incorrect legal advice”.
Afterpay said the auditor has confirmed Afterpay’s current program is aligned with the AML/CTF Act and that the buy now, pay later business is low risk in regards to its vulnerability to be used for money laundering or terrorist financing. But on this point, the auditor wrote:
“Notwithstanding this, the risk controls in place must remain commensurate with business growth. Afterpay must enhance its existing controls to identify Politically Exposed Persons (PEPs) and the risk they may pose. It is noted that Afterpay have commenced a project to address this issue.”
AUSTRAC will now consider the report and decide if it will take any further action.
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At the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.