Austrac Public Legal Interpretation No. 11 – Electronic funds transfer instructions

AUSTRAC has released Public Legal Interpretation (PLI) 11 which covers electronic funds transfer instructions (EFTIs) and international funds transfer instructions (IFTIs), as detailed in the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act).

The AML/CTF Act requires:

  • persons involved in an electronic funds transfer instruction to record, obtain, include and/or pass on specific information about an EFTI and, in certain circumstances, report this information to AUSTRAC
  • a person who sends or receives an IFTI, transmitted into or out of Australia, to report specific information about the transaction to AUSTRAC.

The PLI sets out AUSTRAC's views on the relevant EFTI and IFTI provisions of the AML/CTF Act, their application to particular scenarios (such as when funds transfer instructions are given using a debit or credit card), and when reporting to AUSTRAC is required.

This PLI does not cover instructions made under a designated remittance arrangement.

September 2, 2009 in Anti-money laundering | Permalink | Comments (0) | TrackBack

New AML/CTF Rules

The Anti-Money Laundering and Counter-Terrorism Financing Rules Amendment Instrument 2009 (No.4) has been registered.

The rule covers

  • definition of 'certified copy' and 'certified extract';
  • corporate treasuries;
  • threshold transaction reporting for authorised deposit-taking institutions;
  • sale of shares for charitable purposes; and
  • premium funding loans for general insurance policies.

    • August 27, 2009 in Anti-money laundering | Permalink | Comments (0) | TrackBack

    Draft AML/CTF Rules relating to cashing out of low balance superannuation

    Austrac has released draft AML/CTF Rules exempting superannuation funds from carrying out the customer identification requirements of the AML/CTF Act on customers where the superannuation account balance is not greater than $1,000, the whole of the interest of the customer in the superannuation fund has been cashed out and the customer's account is closed as soon as practicable after the cashing out.

    A public consultation period is open from 20 August 2009 to 3 September 2009.

    August 21, 2009 in Anti-money laundering, Superannuation | Permalink | Comments (0) | TrackBack

    Austrac changes supervisory strategy

    AUSTRAC has released its supervision strategy for 2009-10 outlining its approach to supervising compliance across the different industry sectors it regulates under Australia's anti-money laundering and counter-terrorism financing laws as it moves from a start-up stage to "business as usual."

    AUSTRAC has changed its approach because the staggered implementation of the AML/CTF Act is now complete and all its obligations are now in effect and the Minister's Policy (Civil Penalty Orders) Principles 2006, which placed conditions on the circumstances in which AUSTRAC would take enforcement action, no longer apply to many obligations.

    AUSTRAC describes its new approach to supervision as a spectrum:

    At a lower end are activities such as mailouts, e-newsletters and articles in industry magazines. These activities can achieve a high level of coverage across a large number of reporting entities, but are not tailored to individual entities. They are designed to improve entities’ general understanding of their obligations but are less effective at improving levels of compliance than more intensive forms of supervision.

    In the middle of the spectrum are themed reviews and monitoring of transaction and compliance reports. These activities are more resource intensive but still apply to a broad range of reporting entities.

    On-site assessments are the highest level of supervisory intervention. These activities are tailored to individual reporting entities and consequently have a more direct impact on improving compliance. Where these activities do not result in improved compliance, they are likely to result in direct enforcement action.

    The strategy outlines the different approaches AUSTRAC will take to:

    • Banks and other lenders
    • Non-banking financial services
    • Gambling and bullion
    • Money service businesses

    August 3, 2009 in Anti-money laundering | Permalink | Comments (0) | TrackBack

    AML/CTF Rules updated

    The Anti-Money Laundering and Counter-Terrorism Financing Rules Amendment Instrument 2009 (No.3)updates the AML/CTF Rules as follows:

    • inserts definition of 'accredited translator'
    • minor amendment to Chapter 19
    • extends designated business groups to accountancy and law practices
    • exemption of correspondent banking relationships

    The explanatory statement is here.

    July 16, 2009 in Anti-money laundering | Permalink | Comments (0) | TrackBack

    Austrac enforceable undertakings

    AUSTRAC has commenced a new enforceable undertakings regime.

    An enforceable undertaking is a written undertaking that is enforceable in a court, given to and accepted by the AUSTRAC CEO. They are generally an alternative to civil or administrative action where there has been a contravention of the AML/CTF Act, the regulations or the AML/CTF Rules.

    Austrac's first acceptance of enforceable undertakings are from Barclays Bank PLC and Mega International Commercial Bank Co,. Ltd , following a number of deficiencies and breaches, including reporting breaches,of Australia's anti-money laundering and counter-terrorism financing (AML/CTF) laws.

    Barclay's breaches were identified following an on-site assessment.

    The undertakings require the companies to:

    • review transactions for a period of seven years and provide AUSTRAC any outstanding reports required by law;
    • develop and implement proper systems and controls to ensure that the company complies in the future with its reporting and AML/CTF program obligations;
    • submit to AUSTRAC an independent expert report detailing the company's compliance with the AML/CTF laws. The companies will also be required to submit similar reports in 2010 and 2011.

    July 2, 2009 in Anti-money laundering | Permalink | Comments (0) | TrackBack

    AUSTRAC Typologies and Case Studies Report 2009

    AUSTRAC has issued a new typologies report which outlines some of the latest money laundering methods and other financial crimes in Australia.

    The AUSTRAC Typologies and Case Studies Report 2009 presents a range of case studies that highlight illicit activities.

    The report also features many 'red flag' indicators of suspicious customer behaviour, and crimes including card skimming, early release super schemes, Ponzi schemes, 'boiler room scams', and internet, lottery and sweepstake scams.

    June 26, 2009 in Anti-money laundering | Permalink | Comments (0) | TrackBack

    Austrac: when will it issue a "no action" letter?

    Austrac has issued a draft amended guidance note 08/01 giving more details of when it will issue a no action letter rather than grant an exemption request for a breach or anticipated breach of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 .

    In revised section 4 of the draft amended guidance note it discusses 3 scenarios and whether a no action letter or an exemption request would be more appropriate:

    • A reporting entity experienced an impractical outcome resulting from an interaction between the FTR Act and the AML/CTF Act.

    • During an audit in July 2008, a reporting entity became aware of deficiencies in the customer identification process it had applied to customers of about 200 transactions (from a total of several thousand transactions).

    • A reporting entity was winding down its business in December 2007 when the AML/CTF program obligations came into effect.

    June 9, 2009 in Anti-money laundering | Permalink | Comments (0) | TrackBack

    Draft AML/CTF Rules for 'exempt legal practitioner service'

    Austrac has issued draft AML/CTF Rules to define the term 'exempt legal practitioner service' under section 5 of the AML/CTF Act. It will apply to legal practitioners who provide designated services relating to 'a custodial or depository service' (item 46) and 'a safe deposit box or similar facility' (item 47), when undertaken in the ordinary course of legal practice, but do not apply when those designated services are provided by a legal practitioner who supplies financial services under the Act.

    A public consultation period is open from 22 May 2009 to 5 June 2009.

    May 24, 2009 in Anti-money laundering | Permalink | Comments (0) | TrackBack

    Austrac Public Legal Interpretation No. 3 of 2008 – remittance services providers

    PLI 3 of 2008 discusses who is a provider of a ‘registrable designated remittance service’ and the obligation to register as a provider of ‘registrable designated remittance services’.

    May 16, 2009 in Anti-money laundering | Permalink | Comments (0) | TrackBack

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