New AML/CTF obligations came into effect from 1 November 2011 for all reporting entities and remitters
Following the passage of the Australian Transaction Reports and Analysis Centre Supervisory Cost Recovery Levy (Consequential Amendments) Act 2011 and the Combating the Financing of People Smuggling and Other Measures Act 2011, changes to the AML/CTF Act came into effect from 1 November 2011. As a result:
- reporting entities are required to enrol with AUSTRAC and to keep enrolment details up to date
- providers of remittance services (remitters) must apply to be registered with AUSTRAC, which includes a requirement to demonstrate suitability for registration.
For more information please visit the Enrolment and registration page of the AUSTRAC website.
About the AML/CTF Act
The Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) received Royal Assent on 12 December 2006.
The AML/CTF Act forms part of a legislative package which implemented the first tranche of reforms to strengthen Australia's AML/CTF regulatory regime and bring it into line with international standards including standards set by the Financial Action Task Force (FATF).
The AML/CTF Act covers the financial sector, gambling sector, bullion dealers and other professionals or businesses ('reporting entities') that provide particular 'designated services'.
The AML/CTF Act was implemented in a staggered manner from 2006 to allow industry to develop necessary systems in the most cost efficient way. All provisions of the AML/CTF Act became fully operational from 12 December 2008.
The AML/CTF Act imposes a number of obligations on reporting entities when they provide designated services, which include:
- customer identification and verification of identity
- record keeping
- establishing and maintaining an AML/CTF program
- ongoing customer due diligence and reporting (suspicious matters, threshold transactions and international funds transfer instructions).
The AML/CTF Act and the supporting AML/CTF Rules together implement a principles-based and risk-based approach to regulation. Reporting entities determine the way in which they meet their obligations based on their assessment of the risk of whether providing a designated service to a customer may facilitate money laundering or terrorism financing.
Under the AML/CTF Act, AUSTRAC is Australia's AML/CTF regulator with supervisory, monitoring and enforcement functions. AUSTRAC is also Australia's specialist financial intelligence unit.
Expansion of designated services (second tranche of the AML/CTF Act)
Draft legislative provisions to amend the AML/CTF Act to implement the second tranche of reforms were publicly released in August 2007. These draft legislative provisions proposed amending section 6 of the AML/CTF Act to specify what new 'designated services' will trigger obligations under the AML/CTF Act.
The draft provisions indicated that the following business sectors would be covered by the second tranche legislation:
- real estate agents in relation to buying and selling of real estate
- dealers in precious metals and stones engaged in transactions above a designated threshold
- lawyers, notaries, other independent legal professionals and accountants when preparing for or carrying out certain transactions
- trust and company service providers when they prepare for or carry out for a client the transactions listed in the Glossary to the Financial Action Task Force recommendations.
Update on the second tranche of AML/CTF reforms
The Government is committed to developing a workable legislative framework for the second tranche of AML/CTF reforms that strikes a balance between efficient conduct of business and effective regulation to combat money laundering and terrorism financing.
The Government is currently considering the implementation process for the second tranche of reforms. The implementation process will include further consultation with the representatives of affected businesses.