Anti-Money Laundering and Counter-Terrorism Financing Rules Amendment Instrument 2011 (No. 8) (Cth)

Anti-Money Laundering and Counter-Terrorism Financing Rules Amendment Instrument 2011 (No. 8)

Anti-Money Laundering and Counter-Terrorism Financing Act 2006

I, John Lance Schmidt, Chief Executive Officer, Australian Transaction Reports and Analysis Centre, make this Instrument under section 229 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006.

Dated 16 December 2011

[Signed]

John Lance Schmidt

Chief Executive Officer

Australian Transaction Reports and Analysis Centre

1Name of Instrument

This Instrument is the Anti-Money Laundering and Counter-Terrorism Financing Rules Amendment Instrument 2011 (No. 8).

2Commencement

(a) Schedule 1 of this Instrument commences on the day after it is registered.

(b) Schedule 2 of this Instrument commences on 27 December 2011.

3Amendment

Schedules 1 and 2 amend the Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (No. 1).

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

1. Chapter 11

Item 1.Heading to Chapter 11

Omit

CHAPTER 11 – Compliance Report – Reporting and Lodgment periods

Substitute

CHAPTER 11 Compliance Report – Reporting and Lodgment periods

Item 2.For paragraph 11.1 substitute

11.1 These Rules are made under section 229 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (the AML/CTF Act) for subsections 47(1) and 247(2)of the AML/CTF Act. They specify the reporting period and the lodgment period for a compliance report under subsection 47(1) of the AML/CTF Act.

Item 3.After paragraph 11.3 insert

11.4 For subsection 247(2) of the AML/CTF Act the following is specified:

(1) for a reporting entity that in the 2011 calendar year provided only the designated services described in items 31 or 32 of table 1 in subsection 6(2) of the AML/CTF Act, subsections 47(1)(a) and 47(1)(b) do not apply in relation to:

(a) a 2011 reporting period as specified in subparagraph 11.2(4); or

(b) a 2011 lodgment period as specified in subparagraph 11.3(2).

Item 4.Paragraph 11.4

Renumber as 11.5

2.Chapter 23

Item 5.Heading to Chapter 23

Omit

CHAPTER 23Anti-Money Laundering and Counter-Terrorism Financing Rules for designated remittance arrangements

Substitute

CHAPTER 23 Anti-Money Laundering and Counter-Terrorism Financing Rules – persons specified as ‘non-financiers’

Item 6.For paragraphs 23.1 and 23.2 substitute

23.1 These Anti-Money Laundering and Counter-Terrorism Financing Rules are made under section 229 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) for the purpose of paragraph (e) of the definition of ‘non-financier’ in section 5 of the AML/CTF Act.

23.2 For paragraph (e) of the definition of ‘non-financier’ in section 5 of the AML/CTF Act, the following persons are specified:

(1) a person carrying on an accounting practice; or

(2) a person carrying on a law practice.

3.Chapter 51

Item 7.Subparagraphs 51.2(2), 51.3(2), and 51.4(2)

Omit

Travelex Limited ABN 36 004 179 953

Substitute

Travelex GBP Australia Pty Limited ABN 24 150 129 749

4. After Chapter 65

Add

Chapter 66Applicable customer identification procedures in certain circumstances – compulsory partial or total transfer of business made under the Financial Sector (Business Transfer and Group Restructure) Act 1999

66.1. These Anti-Money Laundering and Counter-Terrorism FinancingRules are made under section 229 for subsection 39(4) of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act).

66.2. Subject to paragraphs 66.5 and 66.6, commencing on the day of a compulsory transfer of business, Division 4 of Part 2 of the AML/CTF Act does not apply to a designated service that is provided in the circumstances specified in paragraph 66.3.

66.3. The specified circumstances for the purposes of paragraph 66.2 are that:

(1) a compulsory transfer of business from reporting entity one to reporting entity two has been effected; and

(2) the designated service is provided to a transferring customer; and

(3) the designated service is of a kind described in table 1 of subsection 6(2) of the AML/CTF Act; and

(4) reporting entity two must commence an examination of reporting entity one as soon as practicable, whether before or after the compulsory transfer of business referred to in subparagraph 66.3(1), in order to determine on reasonable grounds:

(a) the ML/TF risk it faces in providing the designated service to the transferring customers as a group; and

(b) that it has in place appropriate risk based systems and controls to identify, manage and mitigate the ML/TF risk it faces in providing the designated service to the transferring customers as a group; and

(c) whether based on the assessed ML/TF risk and its risk-based systems and controls, it is reasonable for it to either:

(i) rely upon the applicable customer identification procedure of reporting entity one as an appropriate means to identify and verify the identity of a transferring customer; or

(ii) treat a transferring customer who was a pre-commencement customer of reporting entity one as if the customer was a pre-commencement customer of reporting entity two.

66.4. The exemption provided to reporting entity two by paragraph 66.2 will end 60 days after the compulsory transfer of business was effected, unless, prior to that time reporting entity two has concluded the examination required by subparagraph 66.3(4) and has determined in the affirmative the assessments required by subparagraphs 66.3(4)(b) and 66.3(4)(c).

66.5. Reporting entity two must, within 14 days after any of the circumstances specified in paragraph 66.6 come into existence, take one or more of the actions specified below:

(1) carry out the applicable customer identification procedure, unless reporting entity two has previously carried out that procedure or a comparable procedure;

(2) collect any KYC information in respect of the customer; or

(3) verify, from a reliable and independent source, KYC information that has been obtained in respect of the customer, as is appropriate to the ML/TF risk relevant to provision of the designated service by reporting entity two;

for the purpose of enabling reporting entity two to be reasonably satisfied that the customer is the person that he or she claims to be.

66.6. For the purposes of paragraph 66.5 the following circumstances are specified:

(1) a suspicious matter reporting obligation arises in relation to a transferring customer; or

(2) reporting entity two reasonably suspects that reporting entity one did not carry out the applicable customer identification procedure when required; or

(3) significant increases have occurred in the level of ML/TF risk as assessed under the AML/CTF program of reporting entity two, in relation to the provision of a designated service by reporting entity two to a transferring customer.

66.7. In this Chapter:

(1) ‘compulsory transfer of business’ means the process by which all or part of the assets and liabilities of reporting entity one become the assets and liabilities of reporting entity two pursuant to the meaning given by Part 4 of the Financial Sector (Business Transfer and Group Restructure) Act 1999;

(2) ‘reporting entity one’ means the reporting entity that partially or totally transfers business;

(3) ‘reporting entity two’ means the reporting entity that receives the business from reporting entity one;

(4) ‘transferring customer’ means a customer who is a former customer of reporting entity one in relation to a designated service solely because of a compulsory transfer of business from reporting entity one to reporting entity two.

Reporting entities should note that in relation to activities they undertake to comply with the AML/CTF Act, they will have obligations under the Privacy Act 1988, including the requirement to comply with the National Privacy Principles, even if they would otherwise be exempt from the Privacy Act. For further information about these obligations, please go to or call 1300 363 992.

Schedule 2Amendment of the Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (No. 1).

1. Chapter 19

Item 1.Paragraph 19.1 (note)

Omit

section 8

Substitute

subsection 7(2)

2. Chapter 34

Item 2.Subparagraph 34.5(3)

Omit

section 25

Substitute