Explanatory Statement – Anti-Money Laundering and Counter-Terrorism Financing Rules for reportable details under sections 41, 43 and 45 of the AML/CTF Act
1. Purpose and operation of Anti-Money Laundering and Counter-Terrorism Financing Rules (AML/CTF Rules) for reportable details under section 41, 43 and 45 of the AML/CTF Act
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.
Section 41 of the AML/CTF Act describes the broad circumstances in which a suspicious matter reporting obligation will arise, provides that the reporting entity must report to the AUSTRAC CEO about those circumstances, and provides the AUSTRAC CEO with the power to make Rules about the form and details of that report.
Section 43 of the AML/CTF Act provides that a reporting entity must report to the AUSTRAC CEO about any designated service provided by it which is a threshold transaction, and gives the AUSTRAC CEO the power to make Rules about the form and details of that report.
Section 45 of the AML/CTF Act provides that a reporting entity must report to the AUSTRAC CEO about any designated service provided by it which is an international transfer instruction and gives the AUSTRAC CEO the power to make Rules about the form and details of that report.
These AML/CTF Rules amend the Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (No.1) by providing for various technical amendments to Chapters 17, 18 and 19 of the Rules.
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 2008 (No.4).
Section 2
This section specifies that the instrument commences on the day after it is registered.
Section 3
This section contains a schedule which amends the Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (No.1) as follows:
Schedule 1
This schedule amends Chapters 17 and 18 of the AML/CTF Rules, and amends the Chapter 19 which commences on 12 December 2008, as well as the Chapter 19 which replaces that Chapter 19 and which commences on 1 January 2011.
3. Notes on the amendments made by Schedule 1
Item 1
This amendment will allow the Australian Business Number of a transferor entity who is an individual to be included in a report about an international funds transfer instruction transmitted out of Australia. A transferor entity is the person who wishes to transfer funds to a person (the ultimate transferee entity).
Item 2
This amendment will allow a transferor entity’s account number with a reporting entity to be included in a report about an international funds transfer instruction transmitted out of Australia.
Item 3
This amendment will allow for details of the person outside Australia who receives the funds transfer instruction from Australia to be included in a report about an international funds transfer instruction transmitted out of Australia.
Section 4
This amendment will allow the account details of the ultimate transferee entity to be included in a report about an international funds transfer instruction transmitted out of Australia when the transfer is effected by funds being deposited into that account.
This amendment will also allow any reference number assigned to the funds transfer instruction by the reporting entity to be included in a report about an international funds transfer instruction transmitted out of Australia.
Item 5
This amendment will allow a transferor entity’s account number with the person outside Australia who receives the funds transfer instruction to be included in a report about an international funds transfer instruction transmitted into Australia.
Item 6
This amendment will allow for details of the person in Australia who receives the funds transfer instruction from outside Australia to be included in a report about an international funds transfer instruction transmitted into Australia.
Item 7
This amendment will allow the Australian Business Number and the occupation or business description of an ultimate transferee entity who is an individual to be included in a report about an international funds transfer instruction transmitted into Australia.
Item 8
This amendment will allow the account details of the ultimate transferee entity to be included in a report about an international funds transfer instruction transmitted into Australia when the transfer is effected by funds being deposited into that account.
This amendment will also allow any reference number assigned to the funds transfer instruction by the reporting entity to be included in a report about an international funds transfer instruction transmitted into Australia.
Item 9
This amendment will allow details of the person completing a report to be included in a report about an international funds transfer instruction.
Item 10
This amendment will allow the Australian Business Number of a person who is the subject of the report, and who is an individual, to be included in a report about a suspicious matter.
Item 11
This amendment will allow the Australian Business Number of an agent who is an individual to be included in a report about a suspicious matter.
Item 12
This amendment will allow the date of each component of a reportable matter to be included in a report about a suspicious matter.
Item 13
This amendment will allow the date of a transfer, or planned transfer, of money or property to be included in a report about a suspicious matter.
Item 14
This amendment will remove the requirement for details of the person completing report about a suspicious matter from this place in the Rules. These details and others are inserted in a new paragraph 18.3. This reinsertion is further explained in Item 16.
Item 15
This amendment will allow any identifier number or reference number given to a previous report about a suspicious matter in respect of the same person to be included in a report about a new suspicious matter.
Item 16
This amendment will allow details of the person completing a report to be included in a report about a report about a suspicious matter.
Item 17
This amendment will allow any “nicknames” or aliases of an individual customer to be included in a threshold transaction report.
Item 18
This amendment will allow any business names of an individual customer to be included in a threshold transaction report.
Item 19
This amendment will allow the postal address of an individual customer to be included in a threshold transaction report.
Item 20
This amendment will allow the postal address of a non-individual customer to be included in a threshold transaction report. It will also remove the requirement to include a non-individual customer’s registered business address from a threshold transaction report.
Item 21
This amendment will allow a reporting entity to describe a customer’s occupation, business or principal activity in a threshold transaction report if the reporting entity knows this information but does not know the Australian Bureau of Statistics code applying to the occupation or activity.
Item 22
This amendment will remove certain details to be included in a threshold transaction report from subparagraph 19.3(5). They are replaced in subsections 19.3(7)(a) to (d) by items 21 to 24, consistently with other details applicable to the reported transaction.
Item 23
This amendment will allow a breakdown of the components of all cash and non-cash items relating to a threshold transaction to be included in a threshold transaction report.
Item 24
This amendment will allow details of cheques involved in reportable transactions involving physical currency to be included in a threshold transaction report.
Item 25
This amendment will allow details of the purpose of reportable transactions involving e-currency to be included in a threshold transaction report.
This amendment will also allow details of cheques involved in reportable transactions involving e-currency to be included in a threshold transaction report.
Item 26
This amendment will allow details of cheques involved in reportable transactions of a kind specified in the regulations involving money to be included in a threshold transaction report. No relevant regulations have yet been made. However, the forms for reporting of threshold transactions need to provide for such details to be included in the event that such regulations are made in the future.
Item 27
This amendment will allow details of cheques involved in reportable transactions of a kind specified in the regulations involving property to be included in a threshold transaction report. No relevant regulations have yet been made. However, the forms for reporting of threshold transactions need to provide for such details to be included in the event that such regulations are made in the future.
Item 28
This amendment will allow details of the person completing a report to be included in a threshold transaction report.
The amendment also removes a definition provision which is unnecessary as Chapter 1 of the Rules already makes provision for the relevant definitions.
Item 29
This amendment will allow the Australian Business Number of an individual customer to be included in a threshold transaction report from 12 December 2008.
Item 30
This amendment will allow the Australian Business Number of an individual customer to be included in a threshold transaction report from 1 January 2011.
4. Legislative instruments
The AML/CTF Rules are legislative instruments as defined in section 5 of the Legislative Instruments Act 2003.
5. Likely impact
These AML/CTF Rules will have little overall impact as they are technical amendments to reportable details which have not commenced in operation. Most of the amendments clarify already existing requirements or allow reporting of alternative details which are more likely to be available to reporting entities. In terms of any likely costs to consumers, there is no direct cost.
6. Assessment of benefits
These AML/CTF Rules provide greater clarity to reporting entities. Some of the changes allow for reporting of alternative details more likely to be available to reporting entities. The remaining changes provide clarity as to reportable details, and cover information of a similar character to that already authorised by the Rules.
7. Consultation
AUSTRAC has consulted with representative entities likely to be users of both the paper-based forms and those likely to use electronic means to submit the reports that these Rules support.
8. Ongoing consultation
AUSTRAC will conduct ongoing consultation with stakeholders on the operation of the AML/CTF Rules including those affected by these amendments.