The Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) received Royal Assent on 12 December 2006.
The AML/CTF Act forms part of a legislative package that will implement the first tranche of reforms to Australia's AML/CTF regulatory regime.
Background
The reforms are a major step towards:
- enabling Australia's financial sector to maintain international business relationships
- preventing and detecting money laundering and terrorism financing by meeting the needs of law enforcement agencies for targeted information about possible criminal activity and
- bringing Australia into line with international standards, including standards set by the Financial Action Task Force (FATF).
About the AML/CTF Act
The AML/CTF Act covers the financial sector, gambling sector, bullion dealers and other professionals or businesses ('reporting entities') that provide particular 'designated services'.
The AML/CTF Act will be implemented in stages. The commencement dates of some obligations are a day, 6 months, 12 months and 24 months after Royal Assent. This will allow industry to develop necessary systems in the most cost efficient way.
The AML/CTF Act imposes a number of obligations on reporting entities when they provide designated services. These obligations, and the dates on which they come into effect, include:
- customer identification and verification of identity - 12 months after Royal Assent
- record-keeping - in various stages, a day, 6 months and 12 months after Royal Assent and
- establishing and maintaining an AML/CTF program - 12 months after Royal Assent
- ongoing customer due diligence and reporting (suspicious matters, threshold transactions and international funds transfer instructions) - 24 months after Royal Assent
The AML/CTF Act will implement a risk-based approach to regulation. Reporting entities will determine the way in which they meet their obligations based on their assessment of the risk of whether providing a designated service to a customer may facilitate money laundering or terrorism financing.
Under the AML/CTF Act, AUSTRAC will continue its role as Australia's financial intelligence unit. Importantly, AUSTRAC will have an expanded role as the national AML/CTF regulator with supervisory, monitoring and enforcement functions over a diverse range of business sectors.
Background to the AML/CTF review
Background information on the AML/CTF reform process.
Expansion of designated services (second tranche of the AML/CTF Act)
On 13 July 2007, the Attorney-General's Department released draft provisions setting out designated services which will be covered by the second tranche of the AML/CTF legislation.
Sectors which will be affected by the second tranche legislation are:
- real estate agents in relation to buying and selling of real estate
- dealers in precious metals and stones engaged in transactions above a designated threshold
- lawyers, notaries, other independent legal professionals and accountants when preparing for or carrying out certain transactions
- trust and company service providers when they prepare for or carry out for a client the transactions listed in the Glossary to the FATF Recommendations.
The draft provisions (as per document below) were released for public comment by 7 September 2007 (the original closing date of 10 August 2007 was changed).
Second Tranche Designated Services Tables
File size 31kb
Further information is available via the Attorney-General's Department website.
Public submissions should be emailed to aml.reform@ag.gov.au or posted to:
Assistant Secretary
Strategic Policy Coordination Branch
Attorney-General's Department
Robert Garran Offices
National Circuit
Barton ACT 2600
AML/CTF Regulations
On 30 January 2008, the Anti-Money Laundering and Counter-Terrorism Financing Regulations 2008 were registered. These Regulations amend the AML/CTF Act, resolving an unintended exemption in the Act by ensuring that managed investment schemes are captured in the legislation.