Austrac has published for consultation the first draft AML/CTF Rules resulting from the Reform Project Review of the AML/CTF Act which was announced in December 2016.
The proposed changes include:
- as a first step in simplifying customer due diligence, paragraph 4.12.2 (relating to beneficial owners) has been amended, to expand the exemptions for beneficial owners to include subsidiaries of foreign companies;
- a new section (Part 4.15 – Procedure to follow where a customer cannot provide satisfactory evidence of identity) has been inserted into Chapter 4 to aid reporting entities in identifying customers who do not have the usual means of identification. The section provides non-prescriptive suggestions on how customer identification can be undertaken in these circumstances and is based upon the National Identity Proofing Guidelines. It can only be applied in circumstances of low ML/TF risk. ‘Self-attestation’ may only be applied if a customer is unable to be identified using the normal applicable customer identification procedure (ACIP) – it is not a substitute for carrying out the ACIP;
- Part 8.5 has been amended to incorporate a list of the duties of an AML/CTF Compliance Officer. It is intended that the list of duties specified is non-exhaustive and the reporting entity has the discretion to implement those which are relevant to its circumstances;
- The amendment to Rule 8.1.5(a) makes the identification, mitigation and management of ML/TF risk a general requirement in respect to new designated services, new methods of delivering designated services, new technologies and changes arising from the nature of business relationship and control of the customer;
- Rules 8.6.1 and 9.5 (which requires that Part A of an AML/CTF Program must be subject to regular independent review) have been amended to require that the reporting entity must be able to demonstrate the independence of the reviewer (whether internal or external);
- Chapter 15 has been amended to specify that a reporting entity’s Enhanced Customer Due Diligence Program is applied when an item 39 (making a payment under a life policy) designated service is being provided by a reporting entity to a domestic or international politically exposed person in circumstances of high ML/TF risk.
The public consultation period closes on 22 May 2017.
