FILE PHOTO: A logo for the company Afterpay is seen in a store window in Sydney, Australia, July 9, 2020. REUTERS/Stephen Coates
October 14, 2020
(Reuters) – Afterpay Ltd said on Wednesday that Australia’s financial crime watchdog will not take further action against the buy-now-pay-later firm after considering an external auditor report that found it was a low risk for money laundering.
Afterpay shares climbed as much as 4.5% in early trade to hit a record high of A$98.68.
The decision by AUSTRAC, the regulator, formally ends an audit process it ordered https://reut.rs/3lK4kSh more than a year ago to look into whether Afterpay was breaching anti-money laundering and counter-terrorism financing (AML/CTF) laws.
“After considering the report and the response by Afterpay, AUSTRAC has decided not to undertake further regulatory action,” the regulator said in a statement on its website.
The external audit report was handed over in November last year, which Afterpay said found that it was a “low-risk business” for money laundering.
“In our view, this outcome for Afterpay effectively removes this risk from the business in the near term, and significantly reduces the likelihood of any material change to its business model,” Goldman Sachs said in a note.
Based on the report’s recommendations, AUSTRAC and Afterpay said compliance frameworks have since been beefed up.
Afterpay Chairwoman Elana Rubin said the decision “provides the Company and its stakeholders with certainty and acknowledges the work the Company has undertaken to strengthen its AML/CTF compliance.”
“The external audit provided Afterpay with the opportunity to better understand our obligations and to improve the way we manage our AML/CTF risks,” she added.
(Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Sam Holmes and Rashmi Aich)
