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Cash Transaction Reports Regulations (Amendment)

Authoritative Version
  • - F1996B00920
  • No longer in force
SR 1990 No. 341 Regulations as made
These Regulations amend the Cash Transaction Reports Regulations.
Administered by: Attorney-General's
General Comments: This instrument was backcaptured in accordance with Section 36 of the Legislative Instruments Act 2003
Registered 01 Jan 2005
Tabling HistoryDate
Tabled HR07-Nov-1990
Tabled Senate07-Nov-1990
Gazetted 31 Oct 1990
Date of repeal 09 Apr 2013
Repealed by Attorney-General's (Spent and Redundant Instruments) Repeal Regulation 2013

EXPLANATORY STATEMENT

STATUTORY RULES 1990 No 341

Cash Transaction Reports Act 1988

Cash Transaction Reports Regulations (Amendment)

(Regulations to commence on 1 February 1991)

Section 4 of the Acts Interpretation Act 1901 provides that where a provision of an Act which has not yet come into operation confers a power to make regulations then, unless the contrary intention appears, the power may be exercised before the provision comes into operation as if it had come into operation.

Section 43 of the Cash Transaction Reports Act 1988 (the CTR Act) provides that the Governor-General may make regulations for the purposes of the Act.

Subsection 20(8) of the CTR Act, which has not yet come into operation, provides that where a statement under section 20 of the CTR Act in relation to a signatory to an account with a cash dealer is not accompanied by an identification reference in accordance with section 21 of the CTR Act, then the cash dealer must carry out the prescribed verification procedure for the purpose of identifying the signatory.

The Regulations prescribe the detail of the procedure whereby a signatory may be verified under subsection 20(8) of the CTR Act.

The Regulations:

prescribe a general verification procedure for the purposes of subsection 20(8) of the CTR Act; and

prescribe particular procedures for signatories to accounts of public authorities and public companies; for children under the age of 16; for recent arrivals in Australia; for non-residents? and for isolated area Aborigines.

Details of the proposed Regulations are attached.

By virtue of section 4 of the Acts Interpretation Act 1901 the Regulations will come into operation on the day section 20 of the CTR Act commences, namely I February 1991.

Attorney-General


ATTACHMENT

Details of the Regulations

Cash Transaction Reports Act 1988

Cash Transaction Reports Regulations (Amendment)

Details of the Regulations are:

Regulation 1: Regulation 1 identifies the Cash Transaction Reports Regulations as the principal Regulations amended by the Regulations.

Regulation 2: Regulation 2 omits regulation 2 from the principal Regulations and inserts a new regulation 2 (Interpretation). Subregulation 2(1) defines a number of terms used in the Regulations. Some of the more important definitions are as follows.

Aborigine. The general procedure for verification set out in new regulation 4, which is inserted by regulation 5, contains a number of verification checks which are either documentary or involve the checking of a person’s identity with a source of information by telephone. As many of these checks will not be viable in the case of Aborigines living in remote communities a separate procedure is provided in new regulation 9 for remote area Aborigines. The definition of ‘aborigine’ is modelled upon the definitions of ‘Aboriginal person’ and ‘Torres Strait Islander’ used in the Aboriginal and Torres Strait Islander Commission Act 1989.

Census population. The expression ‘census population’ is used in the definition of ‘isolated area’, which is discussed below.

Financial body. A ‘financial body’ may, under subparagraph 4(1)(j)(i), provide a written reference for a signatory certifying that he or she is a known customer of the financial body. The definition of ‘financial body’ is wider than the definition of ‘financial institution’ which is defined in subsection 3(1) of the Cash Transaction Reports Act 1988 (CTR Act). The latter expression means a bank, a building society or a credit union. However, the definition of ‘financial body’ includes these bodies and financial corporations under the Financial Corporations Act 1974 as well.

Higher education institution. This expression is defined for the purpose of new paragraph 4(1)(f) which provides that certain high integrity secondary identification documents may be used to verify the identity of a proposed signatory. A student card issued by a higher education institution or at a TAFE


 

institution may be used for this purpose provided it contains the photograph or the signature of the signatory.

Isolated area. This expression is used in new regulation 9 which provides for the special difficulties of verifying the identity of isolated area Aborigines.

Known customer. The expression ‘known customer’ is used in new subparagraph 4(1)(j)(i) which provides for the verification of the identity of a person who is a known customer of a financial body.

Public utility. New subparagraph 4(1)(b)(iv) provides that an identifying cash dealer may verify the name and address of a proposed signatory from the sources of a public utility.

Rating authority. New subparagraph 4(1)(a)(ii) will allow an identifying cash dealer to verify the name and address of the signatory from the sources of a rating authority from its records relating to land ownership or occupation.

Urban centre. This expression is used in the definition of ‘isolated area’ which, in turn, is used in new regulation 9 which provides for the verification of the identity of isolated area Aborigines.

Verified signatory. This expression is used in new subparagraph 4(1)(j)(iii) which provides that a signatory may be verified by production of a written reference from a ‘verified signatory’. A verified signatory is a person whose identity has been verified by either the existing verification procedure contained in section 21 of the CTR Act or by the general verification procedure contained in new regulation 4.

Regulation 3. Regulation 3 inserts new regulations 3 to 11 in the principal Regulations. Details of each new regulation are as follows.

New regulation 3 (The verification procedure). The verification procedure contained in the Regulations uses a point scoring method. New subregulation 3(2) provides that a signatory is taken to be identified if the signatory rates at least 100 points by using a combination of the checks provided in the Regulations.

The new regulations contain a wide variety of checks to verify the identity of a signatory. Generally these checks can be used in any combination with a view to a particular signatory scoring the necessary minimum of 100 points. However, new subregulation


3(3) imposes some restrictions upon combination of the various checks. Under new paragraph 3(3)(a) any of the sources mentioned in a particular subparagraph of paragraph 4(1)(a), (b) or (c) may be used only once. For example, subparagraph 4(1)(a)(i) allows an identifying cash dealer to verify a person’s name and address by approaching the person’s employer or a former employer (within the last two years). A positive result from this check will rate 35 points. As a result of the limitation contained in paragraph 3(3)(a) a signatory will rate only 35 points from this check irrespective of the number of employers actually approached under the check. However, the employer check could be combined with any of the checks available under another subparagraph of paragraph 4(1)(a).

New paragraph 3(3)(b) provides that only one telephone service check under paragraph 4(1)(d) may be used. If a particular signatory has more than one telephone service then verification by reference to one only of the telephone services may be counted for the purpose of calculating the signatory’s score.

New paragraph 3(3)(c) provides that only one primary identification document will attract points under the check contained in new paragraph 4(1)(e). Thus, if a signatory has both a passport and a birth certificate only one of the documents would attract the 70 points available under the primary identification check.

New paragraph 4(1)(j) provides that a signatory may be verified by production of a written reference from either a financial body (subparagraph (j)(i)), an acceptable referee (subparagraph (j)(ii)) or from a verified signatory (subparagraph (j)(iii)). New paragraph 3(3)(d) provides that only one reference from each subparagraph of paragraph 4(1)(j) may be used. Thus, for example, only one reference from an acceptable referee may be used but this reference could be combined with a reference from a financial body.

New subregulation 3(4) provides that only one lower integrity secondary identification document issued from a particular source may be used. For example, if a person holds a credit card and a debit card from the same financial institution then only one of those items may attract points under paragraph 4(1)(g). However, secondary identification documents from distinct sources may be used.

New subregulation 3(5) places a gloss upon new subregulation 3(4). It is not uncommon for a bank to have a subsidiary which operates as a finance company. Under the Corporations Act 1939 the finance company and the bank may be regarded as being related to one another. As a result of new subregulation


3(5) the fact that the bank and the finance company may be related to one another under the Corporations Act can be disregarded for the purpose of deciding whether secondary identification documents issued by the two bodies corporate are ‘distinct sources’ for the purposes of new subregulation 3(4).

New regulation 4 (Verification generally). New regulation 4 contains the checks of identity which comprise the general verification procedure.

Paragraph 4(1)(a) contains six separate checks. These checks may be carried out either by telephone inquiry or by personal attendance. Where the check is conducted by telephone, new subregulation 10(2) sets out the particulars which the identifying cash dealer must record. As a result of new paragraph 3(3)(a) each separate check may be counted once only in relation to any particular signatory, although the various separate checks may be combined. Each of the checks requires that the identifying cash dealer verify the name and address of the signatory. Each check in paragraph 4(1)(a) carries a weight of 35 points.

Subparagraph 4(1)(a)(i) contains the employer check under which the identifying cash dealer may contact the signatory’s employer, or a former employer within the previous two years.

Subparagraph 4(1)(a)(ii) contains the rating authority check under which the identifying cash dealer may contact a rating authority (which is defined in new subregulation 2(1)) for an area in which the signatory has an interest in land.

Subparagraph 4(1)(a)(iii) enables the identifying cash dealer to verify the signatory’s name and address by reference to an instrument of security which the cash dealer may already hold over property of the signatory. As the security would have been granted in connection with the granting of credit by the cash dealer the cash dealer will have carried out its own checks of identity for prudential reasons at the time the credit was provided.

Subparagraph 4(1)(a)(iv) is an extension of the previous check. It enables the identifying cash dealer to contact another financial body (which is a defined term) to verify the signatory’s name and address from a mortgage or other instrument of security given to it by the signatory. Again, as such an instrument of security would have been given in connection with the provision of credit, the name and address of the borrower-signatory would have been checked at the time by the creditor-financial body.


Subparagraph 4(1)(a)(v) provides that the identifying cash dealer may check the records of the Credit Reference Association of Australia (CRAA) to the extent permitted by the Privacy Act 1988. At present there are no direct restrictions upon access to the CRAA data base imposed by the Privacy Act but the Government has indicated that the Act will be amended such that the data base may be accessed only in connection with the provision of credit by a credit provider. Subparagraph 4(1)(a)(v) is drafted in a form which anticipates such an amendment to the Privacy Act.

Subparagraph 4(1)(a)(vi) is the Land Titles Office check under which the identifying cash dealer may verify the signatory’s identity by reference to the Land Titles Office records of a State or Territory.

Paragraph 4(1)(b) contains a further six checks, each of which attracts a weighting of 25 points. These checks are weighted lower than those in the previous paragraph because the reliability of these checks is somewhat less. Again each individual check may be counted once only in relation to a particular signatory, but the separate checks may be combined together. (This is the effect of new paragraph 3(3)(a)).

Subparagraph 4(1)(b)(i) is the electoral roll check. The electoral roll may be searched at any electoral office and the roll for a particular Division is available for search at all official Post Offices within that Division.

Subparagraph 4(1)(b)(ii) is an acceptable referee check. The expression ‘acceptable referee’ is defined in subsection 3(1) of the CTR Act to mean ‘a person in a class of persons declared by the Minister, by notice in the Gazette, to be acceptable referees for the purposes of this definition.’ Section 21 of the CTR Act provides that a signatory may be verified by producing an identification reference, which is a written reference from an acceptable referee stating that the referee has known the signatory for a specified period by the name used by the signatory and that the referee has examined specified combinations of primary and secondary identification documents. The Declaration by the Attorney-General concerning ‘acceptable referees’ will specify a minimum period, 12 months, for a person to qualify as an acceptable referee. However, for the purposes of the acceptable referee check in subparagraph 4(1)(b)(ii) this minimum period will not apply (but the check will attract a weight of only 25 points).

Subparagraph 4(1)(b)(iii) allows the identifying cash dealer to check the name and address or the signatory


with the owner, landlord or managing agent of premises rented by the signatory.

Subparagraph 4(1)(b)(iv) allows the identifying cash dealer to carry out a public utility check. (‘Public utility’ is defined in new subregulation 2(1).)

Subparagraph 4(1)(b)(v) is an extension of the check in subparagraph 4(1)(a)(iv). Under the latter check the name and address of the signatory may be verified from the records of a financial body relating to an instrument of security. This attracts a weight of 35 points. However, the check in subparagraph 4(1)(b)(v) extends more widely and allows the name and address of the signatory to be verified from the records of a financial body (whether in relation to an instrument of security or otherwise) if the signatory is a ‘known customer’ of the financial body. ‘Known customer’ is defined to mean a natural person who has been a signatory of an account with the financial body for not less than 12 months.

Subparagraph 4(1)(b)(vi) extends the Lands Titles Office check in subparagraph 4(1)(a)(vi) by allowing the identifying cash dealer to check the name and address of a signatory with any other public register maintained under law.

Paragraph 4(1)(c) contains two checks, each worth 25 points. Again, each check may be combined with the other (or with any of the checks available under other paragraphs of regulation 4) but each separate check may be counted once only in relation to a particular signatory. Subparagraph (c)(i) enables the cash dealer to verify the name and date of birth of the signatory from the records of an educational institution attended by the signatory within the last 10 years. Subparagraph (c)(ii) enables the identifying cash dealer to verify the same details from the records”of a professional or trade association of which the signatory is a member.

Paragraph 4(1)(d) contains a telephone check, worth 25 points. Under this check the identifying cash dealer may verify the name and address of the signatory from the records of Telecom and by making telephone contact with the signatory on that service.

Paragraph 4(1)(e) is a primary identification document check, which is worth 70 points. ‘Primary identification document’ is defined by subsection 3(1) of the CTR Act to mean a birth certificate, a citizenship certificate or a passport. Where such a document is produced to the identifying cash dealer, the cash dealer must record the details of the document specified at new subregulation 10(1).


Paragraph 4(1)(f) is another documentary check, involving the use of certain higher integrity secondary identification documents. ‘Secondary identification document’ is defined by the CTR Act to mean ‘a document (other than a primary identification document) which establishes the identity of [a signatory] in that name’. Under paragraph (f) such a document which contains either a photograph or a signature of the signatory and which is a Government employment card, a licence, a Government benefit card or a student card will attract a weight of 40 points.

Paragraph 4(1)(g) provides that any other secondary identification document produced to the cash dealer (ie other than a higher integrity document within paragraph (f)) attracts a weight of 25 points. It should be noted that new subregulation 10(1) specifies the details that the cash dealer must record of documents produced pursuant to either paragraph (e), (f) or (g).

Paragraph 4(1)(h) effectively means that a signatory who is a known customer of the identifying cash dealer is given 40 points on account of the prior knowledge that the cash dealer has of the signatory.

Paragraph 4(1)(j) contains three separate reference checks each of which attracts a weight of 40 points. Under subparagraph (j)(i) the signatory may produce a written reference from a financial body certifying that the signatory is a known customer of the financial body and bearing the signature of the signatory. Unlike the earlier checks involving a reference by a financial body (see subparagraphs 4(1)(a)(iv) and (bi(vij this check involves the production of a formal written reference and therefore attracts a weighting of 40 points, as opposed to the weightings of 35 points and 25 points respectively for the earlier checks.

Subparagraph 4(1)(j)(ii) provides for a written reference from an acceptable referee certifying that the referee has known the signatory by that name for at least 12 months. This check contrasts with the earlier acceptable referee check at subparagraph 4(1)(b)(ii) in that it must oe in writing and there is a requirement that the referee has known the signatory for at least 12 months. Accordingly, this check attracts a weighting of 40 points instead of 25 points.

Subparagraph 4(1)(j)(iii) allows a signatory to produce a written reference from a verified signatory who has known the signatory for at least 12 months. (‘Verified signatory’ is defined to mean a person whose identity has been identified through the identification reference method under section 21 or


the general verification method under new regulation 4.) Again, this check is weighted at 40 points.

New subregulation 4(2) requires that, where the check used is a documentary check under paragraph 4(1)(e), (f), (g) or (j) the cash dealer shall copy the document or record the particulars of the document mentioned in new regulation 10.

New regulation 5 (Verification: public authorities and public companies). The verification requirement imposed by the CTR Act applies to each signatory to an account. Accordingly it is recognized that in the case of accounts with large numbers of signatories, the verification requirement will be onerous. This applies particularly to the case of accounts held by businesses and public authorities which may have hundreds of signatories. In order to minimize the burden of the verification procedure, whilst also maintaining its integrity, clause 5 contains a separate and streamlined verification procedure to be used for verifying the identity of signatories to the accounts of public authorities and public companies. (Both ‘public authority’ and ‘public company’ are defined by new subregulation 2(1).) Essentially the procedure involves the verification in the ordinary way (ie by the identification reference method under section 21 of the CTR Act or by the general procedure under new regulation 4) of a person responsible for the administration of the account and allowing that person to introduce to the cash dealer other subsidiary signatories to the account.

New subregulations 5(1) and (2) provide that the principal executive officer of a public company or public authority, or the person responsible for the administration of its account, may nominate a person (or persons) to be the verifying officer (or officers) for the account. The identifying cash dealer must then verify the identity of the nominated verifying officer by using the identification reference method under section 21 of the CTR Act or the general verification procedure under new regulation 4.

New subregulation 5(4) requires that the public company or public authority must notify the cash dealer as soon as practicable if it revokes the nomination of a verifying officer or the verifying officer ceases to be employed by the public company or public authority.

New subregulation 5(5) contains the alternative procedure. A signatory to the account is taken to be identified if the the verifying officer certifies that the proposed signatory is authorised by the company or authority to be a signatory and the


certificate is signed both by the verifying officer and the proposed signatory.

New regulation 6 (Verification: children). There are particular problems involved in the verification of the identity of children. For example, most children will have few, if any, secondary identification documents. There are also special difficulties of a different kind in relation to school banking, where many thousands of accounts are opened in the first few months of each year. Accordingly, a special procedure is included in new regulation 6 which provides for the verification of the identity of a signatory who is a child under the age of 16.

New subregulation 8(1) provides that the identity of a child who is a signatory is taken to be verified if there is produced to the cash dealer a primary identification document or a statement issued on behalf of an educational institution attended by the child, specifying the name of the child and confirming that the child attends the institution. The written statement must be authenticated by the school (either by being on its letterhead or bearing its stamp or seal) and signed by the principal, head teacher or chief administrator of the school.

New subregulation 6(2) provides that the cash dealer must copy each of the documents produced or record the particulars required by regulation 10.

New regulation 7 (Verification: recent arrivals in Australia). Another category of signatories who will have special difficulty in verifying their identity will be persons who have only recently arrived in Australia. New regulation 7 provides that a person who has arrived in Australia within the immediately preceding 6 weeks may verify his or her identity upon production of his or her passport to the identifying cash dealer. ‘Passport’ is defined (for the purposes of new regulation 7) to include an official travel document or a passport which has expired within the past 2 years.

Again the cash dealer is required by new subregulation 7(3) to copy the document produced or to record the details of the documents specified by regulation 10.

New regulation 8 (Verification: non-residents). Section 6 of the CTR Act provides that it applies throughout the whole of Australia and also applies outside Australia. As a result, the Act applies to branches of Australian financial institutions whether within Australia or overseas. In any event it will occasionally be necessary lov a non-resident to be appointed as a signatory to an account, for example


in the case of foreign financial bodies carrying on business in Australia. Of course there will be particular problems for a non-resident seeking to have his or her identity verified in accordance with the CTR Act.

Accordingly, new regulation 8 makes special provision for such a circumstance. The procedure is similar to that for public companies and public authorities contained in new regulation 5. A financial body that carries on business in Australia will be able to notify the cash dealer of the nomination of a person resident overseas to be a foreign verifying officer (new subregulation 8(2)). The identity of that foreign verifying officer must then be verified by means of the identification reference procedure in section 21 of the CTR Act or by the general verification procedure in new regulation 4 (new subregulation 8(3)). If the appointment is revoked or if the person ceases to be employed by the financial body it must notify the cash dealer of this change of circumstances as soon as possible (new subregulation 8(4)).

New subregulation 8(5) contains the procedure. A person resident outside Australia is taken to be verified if the foreign verifying officer provides a certificate that the proposed signatory is authorised by the financial body to be a signatory, that he or she is known by the name cited in the reference and resides at a particular address, and is signed by both the foreign verifying officer and the proposed signatory.

New regulation 9 (Verification: isolated area aborigines). An aborigine resident in an isolated community will also have difficulty in establishing his or her identity under the identification reference procedure in section 21 of the CTR Act or under the general procedure in new regulation 4. Accordingly new regulation 9 contains a modified procedure for use in such circumstances.

The procedure will be applicable to an aborigine who is ordinarily resident in an isolated area. ‘Isolated area’ is defined by new subregulation 2(1) to mean a place situated not less than 100 kilometres from the nearest town with a population of 2,500 or more.

Under new regulation 9 a ‘community elder’ for a particular community may be an acceptable referee in relation to aborigines resident in that community. Further, each verification by a community elder is weighted at 50 points.

New regulation 10 (Particulars to be recorded). New regulation 10 specifies the particulars that are to


be recorded in relation to any of the checks conducted by the identifying cash dealer. New subregulation 10(2) applies to the documentary checks under the new regulations (ie those checks which involve the scrutiny of documents produced by or on behalf of the signatory). New subregulation 10(2) applies where the check involves the obtaining of information by telephone from, or by personal attendance upon, a particular source of information.

New regulation 11 (Public employee). New regulation 11 is a definitional provision. It interprets references to ‘public employee’ where used in the new regulations. Thus where new subparagraph 4(1)(f)(ii) (the higher integrity secondary identification document check) speaks of a ‘public employee’ this is interpreted as provided by new regulation 11.