If you provide designated services that have a geographical link to Australia, you're a reporting entity and have anti-money laundering and counter-terrorism financing (AML/CTF) obligations.
Geographical link requirement criteria
To have a geographical link to Australia, you must meet one of the following criteria:
- You provide a designated service at or through a permanent establishment in Australia.
- You’re a resident of Australia and provide a designated service at or through your permanent establishment in a foreign country.
- You’re a subsidiary of a company that’s a resident of Australia and provide a designated service at or through your permanent establishment in a foreign country.
Definition of a permanent establishment
A permanent establishment is a place at or through which you conduct any activities or business. This also includes conducting activities or business through an agent. You can have more than one permanent establishment.
Mobile services or travelling
If you or your agent provide a designated service while operating on a mobile basis or travelling in another country, the designated service is provided at or through a permanent establishment in that country.
Remittance network providers exception
If you’re a remittance network provider (RNP) who operates a network of remittance affiliates in Australia, you are a reporting entity regardless of whether you meet the geographical link requirement.
This means you have obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006.
This is due to the global nature of remittance services where many RNPs are based in foreign countries with affiliates operating in Australia.
Criterion one: permanent establishment in Australia
You meet the geographical link requirement if you provide a designated service at or through a permanent establishment in Australia. For example:
- any person or entity providing a designated service at physical offices or business premises in Australia
- foreign persons or entities providing a designated service through branches or offices located in Australia
- a person who is travelling to Australia and provides designated services to customers out of a temporary location in Australia.
Providing designated services through a website
If you provide designated services to Australian customers through an online platform or website, it might mean that you don’t meet the geographical link requirement. To be a reporting entity, you or your agent must conduct activities related to your designated service through a permanent establishment in Australia. Examples of this are below.
Servers located in Australia
If the servers that host your website are in Australia and are owned and operated by, or located on premises owned or operated by you, this is a permanent establishment in Australia.
Office address in Australia
To meet the geographical link requirement you or an agent need to conduct activities or business related to the designated services you provide at or through the Australian office address.
Having an office address doesn’t meet the geographical requirement by itself and will depend on the facts of the services being provided.
Australian bank account
To meet the geographical link requirement based on holding an Australian bank account, you must provide the designated service through that Australian bank account. This means payment for your services go into an Australian bank account.
Holding an Australian bank account doesn’t meet the geographical requirement by itself.
Criterion 2: resident of Australia with branches or offices overseas
You meet the geographical link requirement if you’re a resident of Australia providing designated services at or through a permanent establishment in another country.
Use our check Australian residency table to see if you’re a resident of Australia.
Criterion 3: resident of Australia with foreign subsidiaries
You meet the geographical link requirement if you’re both a:
- subsidiary of a company that’s a resident of Australia
- provider of a designated service at or through a permanent establishment in a foreign country.
Use our check Australian residency table below to determine if your company is a resident of Australia.
Check Australian residency
If you’re providing designated services through branches or offices located overseas, you need will need to consider if you’re a resident of Australia.
If you’re a foreign subsidiary, you need to assess if your parent company is a resident of Australia.
Table: residency test overview
| Category | A person is a resident of Australia if: |
|---|---|
| Individual | the individual is ‘ordinarily resident’ in Australia. For an individual to be ordinarily resident in Australia there needs to be a degree of permanence to their residence in Australia. |
| Company |
either:
Refer to section 11 of the Act and our guidance on determining ownership and control structures. |
| Trust |
any of the following apply:
Refer to section 11 of the Act and our guidance on determining ownership and control structures. |
| Partnership | one of the partners in a partnership is a resident of Australia. |
| Corporation sole | the corporation sole was established in Australia. |
| Body politic | a body politic of, or a part of, a particular country is a resident of that country. |
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.