Know your customer information

Your AML/CTF program will need to address whether and in what circumstances further KYC information about your customers should be updated or existing KYC information verified. Examples of when this may be necessary include when a significant transaction (for example, in amount, size or volume) takes place, or a material change to how the account has been previously operated by the customer.

Transaction monitoring program

Your AML/CTF program must include a transaction monitoring program to detect suspicious transactions when they occur. A transaction is suspicious if it satisfies one or more of the conditions specified in section 41 of the Act.

To identify apparently suspicious transactions, the transaction monitoring program must have regard to complex or unusual large transactions and all unusual transaction patterns where there is no apparent economic or lawful purpose. Examples of these include:

• significant transactions (in terms of amount or volume) for that customer
• transactions that exceed transaction or amount limits
• very high account turnover inconsistent with the size of the balance
• transactions outside the regular pattern of an account's activity.

Enhanced customer due diligence program

Your AML/CTF program must include an enhanced customer due diligence program. This program must be applied where you assess ML/TF risk is high, or when a suspicious matter reporting obligation arises. In applying enhanced customer due diligence you may consider:

• seeking further information from the customer or third-party sources to clarify, update or obtain the customer's KYC information; clarify the nature of the customer's ongoing business with the reporting entity; or consider any suspicion that may be reportable to AUSTRAC
• undertaking more detailed analysis of their KYC information
• verifying or re-verifying KYC information
• analysing the customer's past transactions and possibly monitoring future transactions
• whether a suspicious matter report ought to be lodged with AUSTRAC.

If you lodge a suspicious matter report in relation to a pre-commencement customer, you are required to verify that customer's identity under section 29 of the AML/CTF Act.