The Anti-Money Laundering and Counter-Terrorism Financing Rules were amended on 11 January 2018.
The amendments to the Anti-Money Laundering and Counter-Terrorism Financing Rules by the Anti-Money Laundering and Counter-Terrorism Financing Rules Amendment Instrument 2018 (No. 1) include:
When a customer is unable to provide satisfactory evidence of their identity
A new Part 4.15 sets out procedures for reporting entities to follow in certain limited and exceptional circumstances when a customer is unable to provide satisfactory evidence of their identity.
This may include: individuals whose birth was not registered, people who are homeless, undocumented arrivals in Australia, people living in remote areas, people who are transgender or intersex, people affected by natural disasters, people with limited access to identity documents (for example because they were raised in institutional or foster care), people with limited participation in society, and young people or those over 18 who have not established a ‘social footprint’ in the community.
The amendments are in response to the finding of the Statutory Review of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 and Associated Rules and Regulations that “reporting entities are struggling to verify customers’ identities in some circumstances,” and which has been identified as an ongoing issue since the commencement of the AML/CTF Act in 2006. The amendments will also assist the government in meeting its G20 commitment to reduce financial exclusion.
AML/CTF Programs
Amendments are made to Parts 8.1 and 9.1 to make the ‘identification, mitigation, and management’ of money laundering and terrorism financing (ML/TF) risk a general requirement in respect of new designated services, new methods of delivering designated services, new technologies, and changes arising in the nature of the business relationship, control structure, and beneficial ownership of the customer.
Amendments are also made to Parts 8.6 and 9.6 to guarantee the independence of the reviewer of AML/CTF programs.
A new Part 8.6 sets out the required timing and frequency of independent reviews of Part A of an AML/CTF Program, and clarifies that while the review may be carried out by either an internal or external party, the person undertaking the review must not have been involved in undertaking any of the functions or measured being reviewed including:
(1) the design, implementation, or maintenance of Part A of a reporting entity’s AML/CTF program; or
(2) the development of a reporting entity’s risk assessment or related internal controls..
Reporting entities must be able to demonstrate the independence of the reviewer.
The frequency of the review should take into account the nature, size and complexity of a reporting entity’s business, and the type and level of ML/TF risk it might face.
The amendments to Parts 8.7 and 9.7 require reporting entities to incorporate guidance on ML/TF risks provided or disseminated by AUSTRAC in the development or updating of Part A of their AML/CTF Programs.
A consolidated updated Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (No. 1) can be downloaded here.
