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TikTok Referred to Australian Regulator Over AML Concerns in Türkiye and Ireland


TikTok, the popular social media platform known for its short video content, is facing increased scrutiny from Australian authorities. The platform has been referred to Australia's anti-money laundering watchdog, AUSTRAC, following allegations that it misled Irish regulators about deficiencies in its financial transactions monitoring.

The concerns originated from a report in Türkiye, where authorities discovered substantial sums being transferred through TikTok to accounts possibly connected to terrorist activities. This revelation led to the closure of several TikTok accounts by HSBC due to inadequate controls over the financial transactions conducted through the platform.

TikTok incorporates a feature that allows users to send digital "gifts" to content creators, which can then be converted into real money. This feature has gained immense popularity, particularly among the younger demographic, with some users reportedly earning significant amounts through this system.

Following the issues identified in Türkiye in 2022, TikTok claimed to have tightened its compliance measures, although specifics regarding the adjustments in Ireland remain undisclosed. In response to the unfolding events, Senator James Paterson, a vocal critic of TikTok's ownership and privacy practices, urged AUSTRAC to initiate an investigation. He expressed concerns over the potential national security and privacy risks if the allegations of TikTok's involvement in financing terrorist activities were substantiated.

Senator Paterson emphasized the gravity of the situation in his communication to AUSTRAC, stating: “TikTok’s national security and privacy risks to our country would be seriously compounded if any allegations are proven that the company’s platform has been implicated in counter-terrorism financing activities of a proscribed terrorist organization under Australian law,” as reported by The Australian Financial Review.

TikTok has consistently denied any ownership or control by the Chinese Communist Party, distinguishing itself from Douyin, its Chinese counterpart. “Australians can be reassured that TikTok takes its legal obligations seriously and has robust controls in place to ensure compliance with those obligations,” said a TikTok spokeswoman. “TikTok has not received any queries from Australia regulators with regards to this issue.” However, the company confirmed that it has not yet been approached by Australian regulators concerning these allegations.

AUSTRAC, which is sharpening its focus on digital businesses involved in financial transactions this year, has acknowledged receiving Senator Paterson's letter but has refrained from commenting further due to the sensitivity of operational matters. The agency emphasized that Australian laws mandate companies to identify and mitigate risks associated with their services being used for money laundering and other criminal activities.

Apart from the money laundering concerns, TikTok is also under investigation by the Office of the Australian Information Commissioner for alleged breaches of privacy rules through unauthorized data collection. TikTok has denied these allegations as well.