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These rules amend the Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (No. 1) to amend chapters 27, 51, 56, 57 and 63 and add a new chapter 68.
Administered by: Attorney-General's
Made 04 Sep 2012
Registered 06 Sep 2012
Tabled HR 10 Sep 2012
Tabled Senate 10 Sep 2012
Date of repeal 09 Apr 2013
Repealed by

 

 

 

                                                                                                                                          

 

 

 

 

 

 

 

 

Explanatory Statement – Anti-Money Laundering and Counter-Terrorism Financing Rules Amendment Instrument 2012 (No. 4) amending the Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (No. 1)

 

 

1.         Purpose and operation of Anti-Money Laundering and Counter‑Terrorism Financing Rules (AML/CTF Rules) amending Chapters 27, 51, 56, 57 and 63 and adding Chapter 68

 

1.                  Section 229 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) provides that the AUSTRAC Chief Executive Officer (AUSTRAC CEO) may, by writing, make AML/CTF Rules prescribing matters required or permitted by any other provision of the AML/CTF Act.

Amendments to Chapter 27

 

2.                  Section 75A (Information to be entered on the Remittance Sector Register) of the AML/CTF Act specifies the information that the AUSTRAC CEO must enter on the Remittance Sector Register if the AUSTRAC CEO decides to register a person as a remittance network provider, an independent remittance dealer or a remittance affiliate of a registered network provider.  Under paragraph 75A(1)(f) the registrable details in relation to a person are required to be entered on the Remittance Sector Register.  Registrable details are defined in section 5 of the AML/CTF Act as such information relating to the person as is specified in the AML/CTF Rules.  Chapter 27 of the AML/CTF Rules lists the registrable details.

 

3.                  In 2011, the Combating the Financing of People Smuggling and Other Measures Act 2011 (CFPSOM Act) amended the AML/CTF Act.  As a result of the amendments, section 75 of the AML/CTF Act requires the AUSTRAC CEO to maintain a register known as the Remittance Sector Register.  Prior to the amendment the AUSTRAC CEO was required to maintain a Register of Providers of Designated Remittance Services.  Under the transitional provisions contained in Schedule 1 to the CFPSOM Act the Register of Providers of Designated Remittance Services continues in operation as the ‘old Register’ until specified circumstances occur.

 

4.                  These amendments to Chapter 27 specify the registrable details for the Remittance Sector Register in addition to the details currently contained in the chapter relating to the old Register.

 

Amendments to Chapter 51

 

5.         The amendments to Chapter 51 delete erroneous references to ‘Travelex Limited ABN 36 004 179 953’ and insert the correct reference of ‘Travelex GBP Australia Pty Limited ABN 24 150 129 749’.

 

Amendments to Chapter 56

6.                  Section 75B (Applications for registration) of the AML/CTF Act specifies the information and requirements regarding applications for registration on the Remittance Sector Register. Paragraph 75B(3)(b) specifies that applications for registration must contain the information required by the AML/CTF Rules.

7.                  Chapter 56 of the AML/CTF Rules specifies the information to be included in an application for registration as a remittance network provider (RNP), a remittance affiliate of the RNP or an independent remittance dealer.  Schedule 1 of the chapter specifies the obligations for RNPs, Schedule 2 relates to remittance affiliates of RNPs and Schedule 3 relates to independent remittance dealers.  Part A of the Schedules specifies the information which a person must include in their applications for registration on the Remittance Sector Register, while Part B of the Schedules specifies the information which a person must obtain and retain in relation to registration.

8.                  The amendments to Chapter 56 make consistent the requirements for persons that are trusts to include the full name, business address and any business registration numbers of each trustee in their applications for registration on the Remittance Sector Register.  Part A of the Schedules to Chapter 56 previously required persons which are trusts registering as RNPs, to provide the full name, business address and any business registration numbers of the trustee in their applications.  In contrast, persons which are trusts registering as either remittance affiliates of RNPs or independent remittance dealers are required to provide the full name, business address and any business registration numbers of each trustee.  These amendments make the obligations for all three classes of persons consistent by requiring that the details of each trustee be included in an application for registration.

9.                  As a result of these amendments, there is now no longer a requirement for relevant persons to obtain and retain the full name and address of each trustee under Part B of the Schedules, as this information is now fully provided to AUSTRAC in applications for registration due to the changes to Part A of the Schedules. These requirements are therefore deleted from Part B of the Schedules as a consequential amendment.

10.              The amendments also delete a redundant requirement to obtain and retain the full name and address (not being a post box address) of each partner under Part B of the Schedules, as this information is fully provided to AUSTRAC under Part A of the Schedules.

11.              In addition, minor amendments have been made to the chapter in regard to paragraph numbering and also the privacy notice has been updated.

Amendments to Chapter 57

12.              Subsection 75C(2) of the AML/CTF Act sets out the matters the AUSTRAC CEO must have regard to in determining whether it is appropriate to register a person on the Remittance Sector Register.  Paragraph 75C(2)(b) provides that the AML/CTF Rules may specify other matters which the AUSTRAC CEO must have regard to.

13.              Chapter 57 lists the matters referred to in paragraph 75C(2)(b).  The amendments to Chapter 57 add to the list those matters set out in paragraphs 75C(3)(a) to 75C(3)(e).  These matters were not previously specified in Chapter 57 as they are listed in the AML/CTF Act.  However, for completeness, they have now been included in the chapter.

Amendments to Chapter 63

14.              Section 51E (Applications for enrolment) of the AML/CTF Act specifies the information and requirements for applications for enrolment on the Reporting Entities Roll. Paragraph 51E(2)(b) provides that applications must contain the information required by the AML/CTF Rules.

15.              Chapter 63 of the AML/CTF Rules specifies the enrolment information to be provided or related to a person applying for enrolment. Part A of the Schedule to Chapter 63 specifies the enrolment details to be provided by a person applying for enrolment, while Part B of the Schedule specifies the information to be obtained and retained by a person applying for enrolment.

16.              The amendments to Chapter 63 require persons that are partnerships or trusts to include the full name and business address of ‘each partner’ or ‘each trustee’, as applicable, in their applications for enrolment.  Chapter 63 previously required persons that are partnerships to provide the details of ‘two partners’ of the partnership and persons that are trusts to provide the details of ‘the trustee’ of the trust.

17.              In addition, minor amendments have been made to the alphabetical orderings of the definitions in the chapter and also the privacy statement has been updated.

Addition of Chapter 68

18.              Subsection 112(2) of the AML/CTF Act specifies that reporting entities must make records of the applicable customer identification procedure required to be carried out under the Act and records of information obtained in the course of carrying out the procedure.  Subsection 112(3) provides that the AML/CTF Rules may specify requirements for records made under subsection 112(2) of the AML/CTF Act.

19.              The AML/CTF Act does not contain a provision that requires records of a reporting entity to be kept in a manner that can be audited by AUSTRAC.  This is in contrast to the Financial Transaction Reports Act 1988 (the precursor to the AML/CTF Act) which does specify this requirement (subsection 20(1)).

20.              Chapter 68 requires reporting entities to keep customer identification records in a form that will allow the reporting entity, when required, to provide the record to an AUSTRAC authorised officer within a reasonable time. In addition, the reporting entity must demonstrate that it has complied with subsection 112(2) of the AML/CTF Act.

 

Statement of Compatibility with the Human Rights (Parliamentary Scrutiny) Act 2011

21.              The Human Rights (Parliamentary Scrutiny) Act 2011 was passed on 25 November 2011 and came into effect on 4 January 2012.  It introduced a requirement for Statements of Compatibility to accompany all new Bills and disallowable legislative instruments.

 

22.              The Statement of Compatibility for Anti-Money Laundering and Counter-Terrorism Financing Rules Amendment Instrument 2012 (No.4) is included in this Explanatory Statement at page 13.  The AUSTRAC CEO as the rule-maker of this legislative instrument has stated that it is compatible with the human rights and freedoms recognised or declared in the international instruments lists in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

2.         Notes on sections

 

Section 1

 

This section sets out the name of the instrument, i.e. the Anti-Money Laundering and Counter-Terrorism Financing Rules Amendment Instrument 2012 (No.4).

 

Section 2

 

This section specifies that Schedule 1 commences on the day after it is registered.

 

Section 3

 

This section contains the details of the amendment:

 

Schedule 1 amends the Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (No.1).

 

Schedule 1

 

This schedule amends Chapters 27, 51, 56, 57 and 63 and adds Chapter 68.

 

 

3.         Notes on Items

Chapter 27

Item 1

This item inserts a new title for the chapter.

Item 2

This item amends the ‘registrable details’ specified for the purpose of section 5 of the AML/CTF Act so that there are now ‘registrable details’ for both the Register of Providers of Designated Remittance Services (old Register) and the Remittance Sector Register.

Item 3

This item adds the following definitions to the chapter: ‘authorised individual’, ‘beneficial owner’, ‘control’, ‘enforcement action’, ‘entity’, ‘fraud’, ‘key personnel’, ‘old Register’, ‘people smuggling’, ‘person’, ‘serious offence’, ‘subsidiary’ and ‘terrorism’.

Item 4

This item adds a notation regarding the privacy obligations of reporting entities under the Privacy Act 1988.

 

Chapter 51

Item 5

This item removes the commencement date and associated notation for the chapter as they are now redundant.

Item 6

This item renumbers subparagraph 51.1.2 as subparagraph 51.1.1 due to the repeal detailed under item 5.

Item 7

This item amends the erroneous heading of the Part by changing ‘Travelex Limited’ to ‘Travelex GBP Australia Pty Limited’.

Item 8

This item changes the erroneous specification of ‘Travelex Limited ABN 36 004 179 953’ to the correct specification of ‘Travelex GBP Australia Pty Limited ABN 24 150 129 749’.

 

Item 9

This item amends the reference from paragraph ‘51.1’ to subparagraph ‘51.2.1’.

Item 10

This item amends the notation regarding the privacy obligations of reporting entities under the Privacy Act 1988 so that the notation refers to the current website for the Office of the Australian Information Commissioner (http://www.oaic.gov.au) rather than the old website (http://www.privacy.gov.au).

 

Chapter 56

Item 11

This item removes subparagraph 14(c) which refers to ‘the trustee’.

Item 12

This item inserts a revised subparagraph 14(c), which replaces ‘the trustee with ‘the name of each trustee’.

Item 13

This item amends the grammar in the subparagraph by replacing a full stop with a semicolon.

Item 14

This item amends the form of the paragraph numbering to be consistent with the numbering convention used in the chapter.

Item 15

This item removes paragraph 8.

Item 16

This item inserts a revised paragraph 8, which does not include the requirement to obtain and retain ‘the full name and address (not being a post box address) of each trustee of the trust (if applicable)’.

Item 17

This item deletes a paragraph which duplicates a requirement in Part A of Schedule 1.

Items 18 to 21

These items renumber respective paragraphs as a result of Item 17.

 

Item 22

This item amends the grammar in the subparagraph by replacing a full stop with a semicolon.

Item 23

This item amends the form of the paragraph numbering to be consistent with the numbering convention used in the chapter.

Item 24

This item removes paragraph 10.

Item 25

This item inserts a revised paragraph 10, which does not include the requirement to obtain and retain ‘the full name and address (not being a post box address) of each trustee of the trust (if applicable)’.

Item 26

This item deletes a paragraph which duplicates a requirement in Part A of Schedule 2.

Items 27 to 30

These items renumber respective paragraphs as a result of Item 26.

Item 31

This item amends the grammar in the subparagraph by replacing a full stop with a semicolon.

Item 32

This item amends the form of the paragraph numbering to be consistent with the numbering convention used in the chapter.

Item 33

This item removes paragraph 9.

Item 34

This item inserts a revised paragraph 9, which does not include the requirement to obtain and retain ‘the full name and address (not being a post box address) of each trustee of the trust (if applicable)’.

Item 35

This item deletes a paragraph which duplicates a requirement in Part A of Schedule 3.

 

Items 36 to 39

These items renumber respective paragraphs as a result of Item 35.

Item 40

This item amends the notation regarding the privacy obligations of reporting entities under the Privacy Act 1988 so that it refers to the current website for the Office of the Australian Information Commissioner (http://www.oaic.gov.au) rather than the old website (http://www.privacy.gov.au).

 

Chapter 57

Item 41

This item omits reference to section 4 of the Acts Interpretation Act 1901 and the commencement date of the enabling provision under the AML/CTF Act, as they are now redundant.

Item 42

This item inserts the matters listed in subsection 75C(3) of the AML/CTF Act (Matters that may be specified in the AML/CTF Rules) into the chapter and includes a note specifying that the amendment does not affect the operation of the Crimes Act 1914, whereby those convictions which are spent convictions are not required to be disclosed by the person under the Chapter 57 of the AML/CTF Rules and persons aware of such convictions must disregard them.

Item 43

This item amends the notation regarding the privacy obligations of reporting entities under the Privacy Act 1988 so that the notation refers to the current website for the Office of the Australian Information Commissioner (http://www.oaic.gov.au) rather than the old website (http://www.privacy.gov.au).

 

Chapter 63

Item 44

This item resolves an erroneous alphabetical ordering relating to the definition for ‘ultimate holding company’.

Item 45

This item specifies the correct alphabetical ordering of the ‘ultimate holding company’ definition.

 

Item 46

As a result of the amendments specified in items 44 and 45, renumbering of relevant subparagraphs are specified in items 46 to 52.  This item renumbers subparagraph 63.5(13) as subparagraph 63.5(12).

Item 47

This item renumbers subparagraph 63.5(14) as subparagraph 63.5(13).

Item 48

This item renumbers subparagraph 63.5(15) as subparagraph 63.5(14).

Item 49

This item renumbers subparagraph 63.5(16) as subparagraph 63.5(15).

Item 50

This item renumbers subparagraph 63.5(17) as subparagraph 63.5(16).

Item 51

This item renumbers subparagraph 63.5(18) as subparagraph 63.5(17).

Item 52

This item renumbers subparagraph 63.5(19) as subparagraph 63.5(18).

Item 53

This item substitutes the full stop at the end of the subparagraph with a semicolon as the item no longer concludes the definitions.

Item 54

This item removes paragraph 16.

Item 55

This item inserts a revised paragraph 16 specifying that reporting entities that are partnerships must provide ‘the full name and address (not being a post box address) of each partner of the partnership’ (instead of ‘two partners’) and reporting entities that are trusts must provide ‘the name of each trustee’ (instead of ‘the trustee’).

Item 56

This item removes the requirement for reporting entities that are trusts to obtain and retain the full name and address (not being a post box address) of each trustee of the trust (if applicable) as a result of the amendments specified in item 55.

 

Item 57

This item removes the requirement for reporting entities that are partnerships to obtain and retain the full name and address (not being a post box address) of each partner.

Item 58

As a result of the amendments specified in items 56 and 57, renumbering of relevant subparagraphs are specified in items 58 to 63. This item renumbers paragraph 7 as paragraph 5.

Item 59

This item renumbers paragraph 8 as paragraph 6.

Item 60

This item renumbers paragraph 9 as paragraph 7.

Item 61

This item renumbers paragraph 10 as paragraph 8.

Item 62

This item renumbers paragraph 11 as paragraph 9.

Item 63

This item renumbers paragraph 12 as paragraph 10.

Item 64

This item amends the notation regarding the privacy obligations of reporting entities under the Privacy Act 1988 so that the notation refers to the current website for the Office of the Australian Information Commissioner (http://www.oaic.gov.au) rather than the old website (http://www.privacy.gov.au).

 

Chapter 68

Paragraph 68.1

This paragraph specifies that Chapter 68 is made under section 229 of the AML/CTF Act for subsection 112(3), which relates to the making of records of identification procedures.

Paragraph 68.2

This paragraph specifies that reporting entities required to make records under section 112 of the AML/CTF Act must keep those records in a form which enables the reporting entity to provide the records to an authorised officer of AUSTRAC within a reasonable period to demonstrate to the authorised officer that the reporting entity has complied with its obligation under subsection 112(2) of the AML/CTF Act.

4.         Legislative instruments

These AML/CTF Rules are legislative instruments as defined in section 5 of the Legislative Instruments Act 2003.

5.         Likely impact

The amendments to Chapters 27 and 57 will not have an impact on reporting entities as the changes in Chapter 27 substantially duplicate the requirements previously published in Chapter 56, while the changes in Chapter 57 duplicate the requirements specified under subsection 75C(2)(b) of the AML/CTF Act.  The amendments to Chapter 51 will not impact on the reporting obligations of Travelex Limited and Travelex GBP Australia Pty Limited as they reinstate the original intention of the amendments.  The amendments to Chapters 56 and 63 will require certain types of entities (trusts under Chapter 56 and partnerships and trusts under Chapter 63) to provide more information to AUSTRAC in their applications for registration on the Remitters Sector Register and the Reporting Entities Roll respectively.  The addition of Chapter 68 will impact on reporting entities that make records of identification procedures under the AML/CTF Act, as they will be required to maintain these records in an auditable format for AUSTRAC.

6.         Assessment of benefits

Amendments to Chapter 27

The amendments to Chapter 27 will provide clarity to reporting entities on what information will constitute ‘registrable details’ in regard to the Remittance Sector Register. 

Amendments to Chapter 51

The amendments to Chapter 51 correct an error in the AML/CTF Rules.

Amendments to Chapter 56

The amendments to Chapters 56 make consistent the information which must be provided by remittance network providers, remittance affiliates and independent remittance dealers who are trusts, in their applications for registration on the Remittance Sector Register.

Amendments to Chapter 57

By incorporating the matters listed in section 75C of the AML/CTF Act into Chapter 57, the amendments provide clarity to reporting entities on the full list of matters that the AUSTRAC CEO may consider in determining whether to register a person on the Remittance Sector Register.

 

Amendments to Chapter 63

The amendments to Chapter 63 align the information required in applications for enrolment on the Reporting Entities Roll with the information required in applications for registration on the Remittance Sector Register under Chapter 56 and thereby provide certainty to reporting entities in respect to the relevant obligations.

Addition of Chapter 68

Chapter 68 requires reporting entities that make records of identification procedures to keep those records in an auditable format.  This obligation is beneficial both to the regulatory regime and reporting entities, as it requires all reporting entities to maintain records at a minimum standard which will enable them to demonstrate to AUSTRAC that they have met their customer identification obligations under the AML/CTF Act.

7.         Consultation

AUSTRAC published Chapters 27, 56, 57, and 63 on its website for public consultation.  Chapter 68 was published on two occasions in response to industry submissions.

AUSTRAC did not consult on the minor amendments to Chapter 51, which reinstate the original intention of the chapter to reduce regulatory burden for relevant reporting entities in relation to International Funds Transfer Instruction reporting requirements.    

8.         Ongoing consultation

AUSTRAC will conduct ongoing consultation with stakeholders on the operation of these AML/CTF Rules.


 

Statement of Compatibility with Human Rights

 

 

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

 

Anti-Money Laundering and Counter-Terrorism Financing Rules Amendment Instrument 2012 (No. 4)

 

 

This Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

 

 

Overview of the legislative instrument

 

This Instrument amends Chapters 27, 51, 56, 57 and 63 of the Anti-Money Laundering and Counter-Terrorism Financing Rules and adds Chapter 68 to those Rules.

 

The amendments define the ‘registrable details’ in regard to the Remittance Sector Register in Chapter 27; correct an error in Chapter 51; make the information provided in applications for registration on the Remittance Sector Register (RSR) consistent for persons who are trusts in Chapter 56; add to the list of matters which may be considered by the AUSTRAC CEO in determining whether to register a person on the RSR in Chapter 57; and aligns the information provided in applications for enrolment on the Reporting Entities Roll in Chapter 63, with the information provided in applications for registration on the RSR in Chapter 56.  Chapter 68 requires reporting entities which make records of identification procedures to keep those records in an auditable format for AUSTRAC.

 

Human rights implications

 

While this Instrument engages with the human rights relating to privacy and reputation (through the amendments to Chapters 56 and 63), it is considered that this Instrument does not restrict or infringe upon those rights as the amendments are substantially the same as other requirements which have been in place since October 2011 and which were assessed by the Office of the Australian Information Commissioner during the consultative process.

 

Conclusion

 

This Instrument is therefore compatible with human rights as it does not raise any human rights issues.

 

John Lance Schmidt

Chief Executive Officer

Australian Transaction Reports and Analysis Centre