FAAA calls for third-party whistleblower protections

The Financial Advice Association Australia said it could be exposed by a loophole in the law governing whistleblower protections when it needs to refer information to ASIC.

In a submission to the review of tax and corporate whistleblowing in Australia, the FAAA said professional bodies that receive information from whistleblowers in good faith and pass the information on to a relevant legal authority or government agency should be afforded protection.

The association recommended that individuals and entities who disclose information to professional bodies should have access to whistleblower protections.

The submission said that the association investigates reports it receives to determine whether a breach of professional standards has occurred and whether that should be required to be referred to ASIC.

In those referrals, ASIC would seek information about the person reporting the complaint, creating legal risk for the association.

“As professional bodies are not included in the whistleblowing regimes, we are concerned that disclosing information about the whistleblower to ASIC could put us at risk of breaching the whistleblowing laws and incurring a penalty,” the submission, signed by FAAA chief executive Sarah Abood, said.

The whistleblower review was launched by Treasury at the start of June, which aimed to strengthen existing corporate and financial sector protections, consolidate those protections into the Corporations Act, and add a tax whistleblowing regime to the Taxation Administration Act 1953.

The review was focused on the tax and corporate sector whistleblowing regimes and didn’t include other whistleblowing frameworks involving the public or private sector.

The association also said it is unclear how the new provisions in the whistleblowing regimes interact with the Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) suspicious matter report (SMR) obligations.

The AML/CTF regime requires AUSTRAC reporting entities to submit an SMR if they suspect that a potential customer or a transaction involving a customer is linked to a crime.

“This is important given the definitions in the tax whistleblower regimes would capture individuals, trusts and companies as consumers of services,” the submission said.

“These same consumers are also captured by the AML/CTF regime, meaning both regimes would apply inconsistently to the same consumers in relation to the same matter.”

The FAAA also recommended that the whistleblower regimes should permit regulators and government agencies to share information with Tax Practitioners Board recognised professional bodies, which includes the FAAA, and ASIC-prescribed associations.