AUSTRAC has published an information sheet on its interpretation of the AML obligations of finance brokers.

Comments include:

• Finance brokers who are holders of an Australian financial services (AFS) licence and only provide the designated service specified in item 54 of table 1 in section 6 of the AML/CTF Act, will have suspicious matter reporting (SMR) obligations from 12 December 2008.
• Finance brokers who provide one or more other designated services and are not merely acting as agents of another reporting entity, will be obliged to report suspicious matters to AUSTRAC when the relevant provisions come into effect.
• Finance brokers acting as agents for lenders are not reporting entities under the AML/CTF Act, unless they are providing one or more of the designated services specified in that Act, outside their agency agreement.

• Finance brokers who are not agents but are providing services to lenders under a contractual agreement do not have any SMR obligations under the AML/CTF Act, unless they themselves are providing one or more of the designated services specified in that Act.

• There is no provision in the AML/CTF Act which exposes agents or service providers who are not reporting entities to the ‘tipping off’ offence in section 123 of that Act when they notify the lender of any suspicion they may have formed. Section 123 specifically applies to disclosure of information by a reporting entity.