Federal Register of Legislation - Australian Government

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SLI 2008 No. 2 Regulations as made
These Regulations amend the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (the Act) resolving an unintended exemption in the Act. The Regulations ensure that managed investment schemes are captured in the legislation.
Administered by: Attorney-General's
Registered 30 Jan 2008
Tabling HistoryDate
Tabled HR12-Feb-2008
Tabled Senate12-Feb-2008
Date of repeal 01 Apr 2014
Repealed by Anti-Money Laundering and Counter-Terrorism Financing (Iran Countermeasures) Regulation 2014

EXPLANATORY STATEMENT

 

Select Legislative Instrument 2008 No. 2

 

Issued by the authority of the Minster for Home Affairs

 

Subject -          Anti-Money Laundering and Counter-Terrorism Financing Act 2006

 

Anti-Money Laundering and Counter-Terrorism Financing Regulations 2008

 

Subsection 252(1) of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (the Act) provides that the Governor-General may make regulations prescribing matters required or permitted to be prescribed by the Act, or necessary or convenient to be prescribed for carrying out or giving effect to the Act. 

 

The Act applies to services provided by the financial services, gambling and bullion dealing industries.  Under the Act businesses that provide certain designated services must comply with a range of obligations designed to minimise the risk of money laundering or terrorism financing.  These businesses are referred to as ‘reporting entities’.

 

Certain key obligations, including customer identification and verification obligations, commenced on 12 December 2007.  The cornerstone of the anti-money laundering and counter-terrorism financing (AML/CTF) regime is a requirement for a reporting entity to know its customer.

 

Section 6 of the Act specifies a number of ‘designated services’, and was drafted with the intention of covering managed investment schemes.  However, the issue of an interest in, or the issue of an option to acquire an interest in, a managed investment scheme is not currently captured as a designated service (as set out in item 35 of Table 1 of section 6 of the Act).  This exclusion is an unintended consequence of the interaction between provisions of the Act and the Corporations Act 2001.

 

The Regulations would ensure that the issue of an interest in, or the issue of an option to acquire an interest in, a managed investment scheme would trigger obligations under the Act.  Subsection 6(7) of the Act provides that regulations may be made to amend items in section 6. 

 

Application of AML/CTF obligations to managed investment schemes is necessary to ensure that Australia’s legislative regime complies with international standards established by the Financial Action Task Force.  A comprehensive regime under the Act is also necessary to help protect Australian businesses from being misused for money laundering and terrorist financing. 


 

The Regulations require those in the business of issuing an interest, or issuing an option to acquire an interest, in a managed investment scheme to comply with relevant obligations under the Act.  These obligations include:

·          verifying a customer’s identity before providing a designated service to the customer;

·          having an AML/CTF program in place;

·          complying with record keeping obligations in respect of customer identification, and their AML/CTF programs;

·          reporting to the Australian Transaction Reports and Analysis Centre (AUSTRAC) suspicious matters, and certain transactions above a threshold;

·          reporting to AUSTRAC certain international funds transfer instructions,
cross-border movements of physical currency above a threshold, and the cross-border movement of bearer negotiable instruments; and

·          ensuring that electronic funds transfer instructions include certain information about the origin of the transferred.

Details of the Regulations are set out in the Attachment

The Act specifies no conditions that need to be met before the power to make the Regulations may be exercised.

The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.

 

The Regulations would commence the day after registration.

Consultation regarding these regulations was undertaken with the Office of the Privacy Commissioner, the Australian Government Solicitor, AUSTRAC and the Department of the Treasury.

 

 

 


ATTACHMENT

 

Details of the proposed Anti-Money Laundering and Counter-Terrorism Financing Regulations 2008

 

Regulation 1 – Name of Regulations

 

This regulation provides that the title of the Regulations is the Anti-Money Laundering and Counter-Terrorism Financing Regulations 2008.

 

Regulation 2 – Commencement

 

This regulation provides for the Regulations to commence the day after they are registered.

 

Regulation 3 – Definition

 

This regulation provides that in these Regulations, Act means the Anti-Money Laundering and Counter-Terrorism Financing Act 2006.

 

Regulation 4 – Amendment of Table 1 in section 6 of the Act

 

This regulation provides that Table 1 in section 6 of the Act is amended as set out in Schedule 1.

 

Schedule 1 – Amendment of section 6 of Act (regulation 4)

 

Item [1]

 

Item [1] removes paragraph (b) in item 35 of table 1 of the Act and replaces it with:

 

“(b) in the case of an issue of a security or derivative – the issue does not consist of the issue by a company of either of the following:

(i)                  a security of the company (other than an interest in a managed investment scheme); or

(ii)                an option to acquire a security of the company (other than an option to acquire an interest in a managed investment scheme); and”

Item [1] clarifies that the issue of an interest in, or the issue of an option to acquire an interest in, a managed investment scheme is not exempt from the definition of a designated service.