The Australian Government has agreed to reforms to strengthen
Australia’s anti-money laundering (AML) and counter-terrorist financing
(CTF) system, the Minister for Justice and Customs, Senator Chris
Ellison, has announced.

The Government has agreed to progress Australia’s implementation of the FATF recommendations in two tranches:

• The first tranche will cover the financial and gambling sectors and
  bullion dealers. It will also cover lawyers and accountants but only to
  the extent that they provide services in directcompetition with the
  financial sector.
• The second tranche will extend the obligations to real estate agents, jewellers and professionals, such as accountants and lawyers, when they provide non-financial services.

Under the first tranche of reforms, the industry sectors covered will be required to:

• Verify the identity of customers
• Report suspicious matters and high value transactions
• Maintain rigorous internal AML/CTF programs, and
• Keep appropriate records.

Importantly, the legislative framework will include AUSTRAC’s
development of a package of AML/CTF Rules which allow for a risk-based
approach. This means that the legislative package will reflect
commercial reality by recognising low-risk transactions. This will
ensure businesses are not subject to unnecessary compliance costs or a
‘one size fits all’ strategy.

The next step of
the reform process will be the release of an Exposure Draft of a Bill
for public consultation in November 2005 for a period of four months.