Learn what to do if you want an exemption or modification to your obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (the Act).
We’re committed to protecting the financial system and community from serious and organised crime. All reporting entities need to comply with their obligations.
There are limited circumstances where we may grant an exemption or modification to your obligations. It cannot be used to avoid your obligations or reduce the costs of compliance. We cannot give advice or interpret how the Act applies to specific businesses or situations. Our CEO or their delegate makes decisions on these applications.
You should read our guidance to understand your obligations before applying for an exemption or modification. If you’re a newly regulated industry, we’ve developed program starter kits to help you develop an AML/CTF program.
Types of exemptions and modifications
We have 2 types of exemption and modification:
- an exemption made through the AML/CTF Rules under section 247 (General exemptions) of the Act
- an exemption or modification specifically for you, under section 248 (Exemptions and modifications by the AUSTRAC CEO) of the Act.
Our approach to exemptions and modifications
We apply a risk-based approach to achieving our regulatory objects. An application will only be successful if our CEO is satisfied that:
- the exemption or modification is needed
- the associated money laundering, terrorism financing and proliferation financing risks are low (we refer to these as ML/TF risks)
- it’s appropriate in all of the circumstances to grant the exemption or modification.
What we consider when assessing applications
Our CEO or their delegate will consider:
- if the exemption would create a risk to the effective operation of the AML/CTF regime
- if the exemption would affect the financial system’s integrity or effectiveness
- the nature and extent of the exemption. This includes the impact of regulatory objectives of the Act, including reducing any unnecessary burden on the regulated entity
- if granting the exemption would be consistent with the intent and purpose of the Act and Rules
- the risk profile of the applicant and if an exemption would increase risks to the financial system or public interest
- the applicant’s customer types, including any politically exposed persons (PEPs)
- the types of designated services the applicant provides
- how the applicant delivers their services
- any foreign jurisdictions the applicant deals with
- issues of competitive neutrality (if the exemption would create an unfair advantage for the applicant or disadvantage to others)
- relevant Financial Action Task Force (FATF) recommendations and United Nations conventions and resolutions.
We also consult with and consider feedback from:
- reporting entities or their representatives
- partner agencies
- the Privacy Commissioner on matter relating to privacy functions.
We may also consider any ministerial directions or policy principles given under the Act.
Decisions
We can:
- grant the application, with or without conditions (failing to comply with the conditions is a civil penalty offence)
- request more information from the applicant
- stop the application if a request for more information isn’t supplied within a reasonable time
- refuse the application.
We don’t have to provide reasons for our decisions.
If your application under section 247 is successful, we’ll publish draft AML/CTF Rules on our website for comment. They’re subject to parliamentary scrutiny and may be disallowed.
Expectations
You can expect that we’ll:
- exercise the power to grant or refuse an exemption or modification consistent with the intent and purpose of the Act
- assess each application on a case-by-case basis
- acknowledge getting your application
- ask for more information if needed to decide the application
- inform you in writing of the outcome
- comply with the provisions in the Act
- review this policy regularly to make sure it remains current.
We expect you to:
- get legal advice as needed to understand how the Act and Rules apply to you
- submit a completed exemption application form (Word, 163 KB) as early as possible
- understand and plan your business operations to comply with your obligations
- make applications in good faith
- tell us if you have any non-compliance that could affect your application
- know your obligations and plan your business operations on the basis you’ll comply with them, regardless of making an application
- let us know in writing if your circumstances change which may affect any current application to existing exemption or modification.
If you have any questions, you can contact us.
Related pages
This guidance sets out how we interpret certain Australian legislation, along with associated Rules and regulations. Australian courts are ultimately responsible for interpreting these laws and determining if any provisions of these laws are contravened.
The examples and scenarios in this guidance are meant to help explain our interpretation of these laws. They’re not exhaustive or meant to cover every possible scenario.
This guidance provides general information and isn't a substitute for legal advice. This guidance avoids legal language wherever possible and it might include generalisations about the application of the law. Some provisions of the law referred to have exceptions or important qualifications. In most cases your particular circumstances must be taken into account when determining how the law applies to you.