Australian Regulatory Compliance Review

Draft AML/CTF Rules on the Register of Providers of Designated Remittance Services

Austrac has released draft rules which allow the AUSTRAC Chief Executive Officer (CEO) to remove from or refuse to enter onto the Register of Providers of Designated Remittance Services, a person's name and registrable details, if the AUSTRAC CEO considers that those details would constitute an unacceptable money laundering or terrorism financing risk. They cover individuals, body corporates, trusts and partnerships and representatives of such persons.

A public consultation period is open from 18 December 2009 to 22 January 2010.

AML draft rules released for comment

Austrac has released the following draft rules for comment until 15 January 2010:

• amending the definition of 'designated business group' to allow reporting entities that are either a representative or sub-representative of a money transfer service provider, and who provide a registrable designated remittance service through that provider, to form a designated business group.
• amending the rules in regard to customers who are not individuals. AUSTRAC currently requires that reporting entities should report both the 'holder of the account' and 'each other signatory to the account', when they relate to non-individual customers making threshold transaction reports. The amendments specify that in regard to non-individual accounts, reporting entities now need only supply details about the holder of the account, and the signatory to the account who is conducting the transaction.
• exempting reporting entities who provide risk only life policy interests in a superannuation fund. These draft AML/CTF Rules ensure that superannuation funds providing risk-only life policies are treated in the same manner under the AML/CTF Act as life insurers.

Austrac 2009 AML/CTF compliance reporting dates

Austrac has announced that compliance reports for 2009 business activities must be lodged between 1 January and 31 March 2010. These reports will reflect business activities from 1 January to 31 December 2009 and should be lodged through AUSTRAC's internet-based system, AUSTRAC Online.

The 2009 AML/CTF compliance report asks reporting entities to answer questions relating to four broad topics:

• AML/CTF programs – Part A (the identification, management and reduction of the risk of money laundering and terrorism financing faced by a reporting entity)
• AML/CTF programs – Part B (customer identification procedures)
• ongoing customer due diligence and reporting requirements
• correspondent banking relationships and electronic funds transfer instructions.

Banks and other lenders, non-banking financial service providers, and gambling, bullion and money service businesses covered by the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 are required to submit these reports.

PayPal Australia gives AUSTRAC enforceable undertaking

AUSTRAC has accepted an enforceable undertaking from PayPal Australia Pty Ltd after an assessment of PayPal revealed deficiencies in the systems PayPal had in place to assess and manage its money laundering and terrorism financing risk in relation to its online payments business.

In the undertaking which ends 31 December 2011 PayPal has agreed to:

• strengthen its existing systems and controls to comply with risk assessment requirements;
• submit to AUSTRAC an independent expert report detailing PayPal Australia's compliance with AML/CTF laws and a plan to remedy identified deficiencies.

Austrac issues first remedial direction

AUSTRAC has issued its first remedial direction for non-compliance with the AML/CTF Act.

The direction was issued to Ms Mojgan Zojaji, trading as Little Persia, a remittance service provider, for failure to adopt and maintain an AML/CTF program.

The direction stipulates that Little Persia has 28 days to submit to AUSTRAC a written AML/CTF program that addresses specified matters.

Draft AML/CTF Rules for the exemption of salary packaging administration

Austrac has released draft AML/CTF Rules exempting providers of administration services relating to salary packaging from the Act where their activities relate solely to the item 6, item 7 and item 48 designated services.

A public consultation period is open from 27 October 2009 to 10 November 2009.

Austrac draft AML/CTF rule on warrants

Austrac has released draft AML/CTF Rules relating to warrants.

These draft AML/CTF Rules exempt reporting entities that are warrant issuers, subject to specific circumstances, from the applicable customer identification procedure of the AML/CTF Act, if they provide the item 33, item 35 and item 46 designated services. As a result of these AML/CTF Rules, duplication of the applicable customer identification procedure by relevant reporting entities will be avoided.

A public consultation period is open until 29 October 2009.

Draft AML/CTF Rules for debt collectors

Austrac has issued draft AML/CTF Rules which exempt from specified provisions of the AML/CTF Act, those persons who in the capacity of a debt collector, provide certain designated services. These draft AML/CTF Rules do not remove, when appropriate, the obligation on debt collectors to make suspicious matter reports under section 41 of the AML/CTF Act.

A public consultation period is open from 8 October 2009 to 22 October 2009.

Austrac PLI – notices to reporting entities

Public Legal Interpretation 12 sets out AUSTRAC’s views on its powers to serve notices on reporting entities under the AML/CTF Act. The PLI does not cover the giving of infringement notices.

Failure to comply with a notice may be either a criminal offence or result in a civil penalty. The PLI sets out the requirements for the different notices, including contents and methods of service.

Draft AML/CTF Rules relating to friendly society closed funds and grain warehousing

Austrac has released 2 new draft Rules for public consultation until 18 September 2009:

• Friendly society closed funds: These draft AML/CTF Rules exempt from the AML/CTF Act, reporting entities who provide item 37 (issuing a life policy), item 38 (accepting a premium in relation to a policy) and item 39 (making a payment to a person under a policy) designated services, where they relate to approved benefit funds which are closed to new members and to which new policies cannot be written.
• Commodity warehousing of grain: These draft AML/CTF Rules exempt from the AML/CTF Act, reporting entities who provide item 6 (making a loan) and item 7 (allowing a transaction on a loan) designated services, where they relate to the storing of grain for the purposes of a grain pool.