Australia's anti-money laundering regime has been strengthened to deal with the increased threat of laundering through remittance dealers.The Senate this week passed amendments to the Anti-Money Laundering and Counter-Terrorism Financing Act aimed at reducing the risk of money transfers by remittance dealers being used to fund drug deals, people smuggling ventures and other serious crimes.Remittance dealers, who often operate outside the formal banking system, are considered within the AML regulatory community to be particularly vulnerable to money laundering.According to the explanatory memorandum issued with the amendment: "Australian law enforcement authorities are aware that some international cash transfer services provided by remittance dealers are used by individuals in Australia to pay the organisers of people smuggling ventures."The most up-to-date figures provided by the AML regulator, Austrac, show that A$7.2 billion passed through more than 100 registered local remittance dealers in the 12 months to May 2010. Austrac has reported cases to the Government of remittance dealers being used by crime syndicates to facilitate money laundering associated with drug importation and people smuggling. In one recent case, the dealer was charged with laundering in excess of $90 millionTransaction volumes have been growing at about 10 per cent a year and reached 20 million in the 2008/09 financial year. Remittance dealers are the only AML reporting entities that must register with Austrac. The amendment tightens the registration requirements. Remittance dealers will have to re-apply for registration every three years. Businesses seeking registration will have to demonstrate their suitability. Regulatory and enforcement options under the original legislation were considered to be inflexible. Now, Austrac will have the power to refuse, suspend or cancel a registration, or impose conditions on a dealer. It will also have greater review and enforcement powers.