A designated business group (DBG) is a group of two or more reporting entities who join together to share the administration of some or all of their anti-money laundering and counter-terrorism financing obligations (such as an AML/CTF program or record-keeping). Any member of the group can fulfil some of the obligations for the other members. However each reporting entity is still ultimately responsible for meeting its own AML/CTF obligations.
Who can form a designated business group
Reporting entities must meet certain criteria to be eligible to form a DBG, and can be asked to prove how they meet this criteria. For example, they may be asked to show evidence of a joint venture agreement, or show how they are related to other group members (as specified in section 50 of the Corporations Act 2001).
Instances where reporting entities can form a DBG are listed below.
Members of a joint venture
A DBG can be formed by reporting entities in a joint venture where there is a legal contract setting out the arrangements of the joint venture.
To form a DBG, each member must provide designated services under that agreement.
A DBG can be formed by reporting entities from related companies. Each member must be one or more of the following:
- a holding company of another member
- a subsidiary of another member
- a subsidiary of a holding company of another member.
A company in a foreign country that would be a reporting entity if it was a resident of Australia can also be part of a DBG made up of related companies.
Registrable remittance service providers
Providers of registrable designated remittance services can form a DBG if they are one of the following:
- a money transfer service provider
- a representative of a money transfer service provider
- a sub-representative of a money transfer service provider (an individual, business or organisation engaged to provide a money transfer service under a sub-representation agreement).
Accounting and legal practices
Accounting and legal practices may also form a DBG if they meet certain conditions. See Part 2.1 of Chapter 2 of the AML/CTF Rules for more information.
Establishing a designated business group
Any two or more reporting entities who want to form a DBG must agree in writing to become members of the group. An entity can only be a member of one DBG at a time.
The group must appoint a nominated contact officer. This individual is responsible for establishing the DBG and notifying AUSTRAC of any changes in the group. A nominated contact officer must be either:
- an officer of one of the DBG members (according to the definition of officer in section 9 of the Corporations Act 2001, such as a director or company secretary)
- the AML/CTF compliance officer of a group member.
To establish the group, the nominated contact officer must submit the appropriate forms via AUSTRAC Online.
- Form 1: Election to be a member of a designated business group – this form is used to elect members to a DBG. A separate form must be submitted for each proposed group member.
- Form 2: Formation of a designated business group – this form is used to establish the DBG.
Templates for these forms are also in chapter 2 of the AML/CTF Rules. These can be submitted in hardcopy, but online submission is preferred.
AML/CTF obligations members of a DBG can share
Members of a DBG can use a joint AML/CTF program instead of an individual program to meet their obligations under the AML/CTF Act. The joint program must include both Part A and Part B requirements. Any DBG member can also choose to administer their own AML/CTF program, separate from the group.
Other AML/CTF obligations that any member can carry out for other members of the group include:
- keeping verification information about requests to credit reporting agencies
- conducting ongoing customer due diligence
- lodging AML/CTF compliance reports with AUSTRAC
- recording designated services
- keeping transaction records and customer transaction documents
- making and retaining records of customer identification procedures
- providing and retaining copies of customer identification records
- making and keeping records of AML/CTF programs, including any variations.
Notifying AUSTRAC of changes to a DBG
DBG members must keep their information up to date. The nominated contact officer must notify us within 14 days if:
- a member leaves the DBG
- a member joins the DBG
- the DBG is terminated
- the nominated contact officer changes
- there are any other changes to the DBG.
You must submit this information to us using Form 3: Variations which is available in AUSTRAC Online.