Anti-Money Laundering

Written by: Institute Certified Bookkeepers

What is it?

Anti-Money Laundering and Counter Terrorism Financing

The AML/CTF Act provides the means to help detect and deter money laundering and terrorism financing.

Why?

The objects of the AML/CTF Act include fulfilling Australia’s international obligations, and addressing matters of concern in combating money laundering and the financing of terrorism.

What it is Not?

AML in Australia is not the same as overseas.

Both the UK and NZ have far different system that imposes a greater impact on every bookkeeper.

The Future

The work of the Black Economy Task Force (Treasury), as well as ATO Cash Economy work, may lead to further developments around the impact on all professionals.

Who?

“Reporting Entities” – providers of designated “Financial Services”, “Bullion services”, “Gambling Services” and any other “prescribed services”.

Services include those provided by an ADI, bank, building society, credit union or a person specified in the AML/CTF Rules. It specifically includes the buying and selling of bullion as a designated service, where the buying or selling is in the course of carrying on a business. Also included are persons ‘in the capacity of’ controllers of eligible gaming machine venues.

Reporting entities determine how 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.

Specifically: If you were to hold money on behalf of a client in your bank account (or trust account) or a business of being a Lender, Financial Lease provider, Hire Purchase provider, Provider of a Store Card, Foreign Currency trans-action service provider, Gambling service provider, or otherwise a Provider of a service prescribed in the regulations”

Other items in Table 1 which use the term ‘carrying on a business’ are:

Items 12 and 13 (carrying on a business of supplying goods)
Item 33 (carrying on a business of acquiring or disposing of securities, derivatives or foreign exchange contracts in the capacity of agent)
Item 34 ( in the capacity of agent)
Item 35 (carrying on a business of issuing or selling securities or derivatives)
Item 40 (carrying on a business of providing pensions or annuities)
Item 46 (carrying on a business of providing custodial or depository services)
Item 47 (carrying on a business of providing safe deposit boxes or similar facilities)
Items 48 and 49 (carrying on a business of guaranteeing loans)
Item 50 (carrying on a business of a currency exchange business)
Item 51 (carrying on a business of collecting or holding physical currency)
Item 52 (carrying on a business of preparing payrolls)
Item 53 (carrying on a business of delivering physical currency)

When?

Already.

What?

“Reporting Entities” must:

adopt and maintain an anti-money laundering and counter-terrorism financing “program” (Part 7 of the AML/CTF Act)
report on compliance with the obligations under the AML/CTF Act (Part 3 of the AML/CTF Act)
register as a provider of a ‘registrable designated remittance service’ (Part 6 of the AML/CTF Act)
carry out applicable customer identification procedures (Part 2 of the AML/CTF Act)
carry out of ongoing customer due diligence (Part 2, Division 6 of the AML/CTF Act from 12 December 2008)
report suspicious matters (Part 3, Division 2 of the AML/CTF Act, from 12 December 2008)
report transactions involving amounts over a set monetary value (Part 3, Division 3 of the AML/CTF Act, from 12 December 2008)
report international funds transfer instructions (IFTIs) (Part 3, Division 4 of the AML/CTF Act, from 12 December 2008)
include information within electronic funds transfer instructions (EFTIs) and obtaining and providing that information when requested by the AUSTRAC Chief Executive Officer (CEO) (Part 5 of the AML/CTF Act, from 12 December 2008).

Who to Tell

AUSTRAC (Australian Transaction Reports and Analysis Centre) is the regulator.

What You Must Do

It imposes five key obligations on regulated businesses:

Enrolment – all regulated businesses need to enrol with AUSTRAC and provide prescribed enrolment details.
Establishing and maintaining an AML/CTF program – to help identify, mitigate and manage the money laundering and terrorism financing risks a business faces.
Customer due diligence – identifying and verifying the customer’s identity, and ongoing monitoring of transactions.
Reporting – notifying authorities of suspicious matters, threshold transactions and international funds transfer instructions
Record keeping – businesses are required to keep records of transactions, customer identification, electronic funds transfer instructions and details of AML/CTF programs.

How?

Annual Compliance report: