AUSTRAC has released new draft guidance on source of wealth and source of funds for consultation to help reporting entities understand and undertake source of funds and source of wealth checks on relevant customers.
Establishing the source of funds and source of wealth involves collecting information about the customer and their beneficial owners and on a risk basis, verifying it for accuracy by using reliable and independent documents and data.
This can support your assessment of the risks associated with providing designated services to a customer, monitoring customer transactions and reporting suspicious matters to AUSTRAC.
‘Source of funds’ refers to how and where the customer obtained the funds for a specific transaction or designated service you provide to the customer. Verifying your customer’s source of funds will assist you in applying risk-based systems and controls in accordance with your AML/CTF program, and help you meet your transaction monitoring and suspicious matter reporting obligations. This process includes determining if you suspect that the funds could be the proceeds of crime or may be relevant to the investigation of a criminal offence.
‘Source of wealth’ refers to where the customer’s entire body of wealth and assets came from – not just what is involved in a transaction or business relationship. It describes the economic, business, or commercial activities that generated, or significantly contributed to, the customer’s overall net worth.
If you found this article helpful, then subscribe to our news emails to keep up to date and look at our video courses for in-depth training. Use the search box at the top right of this page or the categories list on the right hand side of this page to check for other articles on the same or related matters.
Author: David Jacobson
Principal, Bright Corporate Law
Email:
About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.
