I had no idea this is what the Perth Mint actually did…
So this story opened up my eyes to a piece of the Australian financial landscape I had no idea about:
The Perth Mint.
And the reason why the Perth Mint caught my attention is because we learnt last week that the Perth Mint is being investigated by Australia's financial crimes authority, AUSTRAC.
Austrac is the body who prosecuted CBA and Westpac for failing to meet their anti-money laundering operations.
So at first I was like, what?!? Why are they going after the mint? What does a mint even do? Who even uses mints these days.
I thought it was just a fancy and museum and gift shop, like the Oonadatta Farm Machinery Museum.
But nope. The mint is actually massive.
In fact, it is the world’s largest producer of newly minted gold!
The Perth Mint alone accounts for 10% of annual global gold production!
WTF?
It turned over $26 billion last year alone.
Not only that, it also acts as a vault. It holds $6 billion worth of gold on behalf of its clients – clients that include central banks and individuals from 130 different countries.
Massive.
But know what the weird thing is?
Guess who owns the Perth Mint…
You do.
If you live in WA.
The Perth Mint is owned by the West Australian Government.
But what does that mean?
Well, what it means that if someone breaks into the bank (in some kind of elaborate heist orchestrated by George Cluney and Brad Pitt and a number of other minor characters) and steals some of the $6 billion it holds in custody, guess who’s on the hook…
West Australian tax payers.
It’s a very strange situation. And true enough, when it was set up, the mint wasn't running a massive, commercial safe deposit box. It’s just something that’s evolved.
But its something that probably needs revisiting.
And especially now that Austrac are getting involved.
Austrac reckon the Mint breached one of the criminal provisions of the Anti-Money Laundering and Counter-Terrorism Financing Act, by running an “unregistered remittance business.”
That is, shady characters were able to wash money through the Mint.
That’s not what mints are for.
Anyway, not sure how this one will play out. Austrac have given the Mint 18-months to appoint an auditor, getting fully audited, and improve their practices.
But there you go. Little old Perth. Home to the largest producer of minted gold in the world.
How about that?
JG.