“Its deeply concerning that AUSTRACs systems and processes dont appear to be effective and that it has made a $2 billion mistake,” said Dr Mulino, who has a PhD in economics from Yale University.
“Given the key role AUSTRAC plays in enforcing Australias anti-money laundering and counter terror financing laws, its very worrying that mistakes of this magnitude are being made, particularly given that international agencies such as the FATF [Financial Action Task Force] have pointed to weaknesses in Australias regulation.”
Mr Dutton’s spokeswoman was contacted for comment on Thursday.
The Vatican and the Australian Catholic Church had earlier both denied knowledge of more than 40,000 transfers worth $US1.8 billion which AUSTRAC alleged had been wired from Rome to Australia in the past seven years.
AUSTRAC chief executive Nicole Rose wrote to a Senate committee in response to a question on notice from Liberal Senator, Concetta Fierravanti-Wells.
AUSTRAC chief executive Nicole Rose has apologised for the error. Alex Ellinghausen
“AUSTRAC’s subsequent engagement with the Vatican City State Financial Intelligence Unit and our detailed analysis of the extracted data has identified a discrepancy,” Ms Rose wrote.
“The discrepancy in the data occurred due to a range of complexities and inconsistencies in some reporting received by AUSTRAC originating from international institutions, relating to incomplete geo-coding data.
“This led to AUSTRAC’s system attributing a large series of transactions to the Vatican City State. AUSTRAC’s quality assurance processes should have identified this issue.”
“AUSTRAC has subsequently undertaken a detailed review of the data and put immediate additional quality assurance processes in place.
“AUSTRAC has worked with the Vatican City State Financial Intelligence Unit as part of this process. AUSTRAC is also considering what further processes and governance changes should be implemented into the future.”
Separately police investigations are underway into other transfers from the Vatican to Melbourne, to see if they were made by people inside the Catholic Church who were hostile to Cardinal George Pell.
Cardinal Pell, who made enemies inside the Vatican while overseeing tough financial reforms as its treasurer, was last year acquitted by the High Court of historic child sex allegations in Victoria.
He had earlier been sentenced to six years jail and spend more than a year in jail.
Labor has been pressing the government for more than two years to better scrutinise international financial transfers connected to lawyers, accountants and real estate agents.
Australia has been promising to introduce comprehensive “tranche 2” laws, with the support of both major political parties, since 2006.
Dr Mulino said: “This $2 billion error is a red flag in relation to broader AML concerns under Peter Duttons watch.
“The government has sat on its hands for years in relation to tranche 2 regulations after having made multiple assurances that they were imminent.
“And recent mis-steps in relation to high roller casino trips have exposed Australia to the risk of significant AML breaches.
“All of this raises serious questions about the Morrison Governments competence and Peter Duttons handling of Australias defences against international money laundering.”
An AUSTRAC spokesperson said the “statistical data discrepancy” has had no impact on the information received and disclosed to AUSTRACs Australian and international law enforcement partners, or on AUSTRACs financial intelligence and regulatory work.
“AUSTRAC continues to work with Australian and international law enforcement partners on specific operational matters.
“AUSTRAC does not comment on operational matters.”
