Anti-Money Laundering and Counter-Terrorism Financing Rules Amendment Instrument 2011 (No. 3)

Administered by Attorney-General's Department

Legislation au F2011L00861 Rules Not in force Legislative Instrument

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Explanatory Statement – Amendment of 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) adding Chapter 52 of the AML/CTF Rules

 

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.

 

Chapter 52  ‘Persons who are licensed to operate no more than 15 gaming machines’

 

Subsection 247(4) of the AML/CTF Act allows exemption from a specified provision of the AML/CTF Act in relation to a designated service that is provided in circumstances specified in the AML/CTF Rules.

 

These AML/CTF Rules exempt from specified provisions of the Act a reporting entity that has a total entitlement under licences issued by one or more States or Territories to operate no more than fifteen gaming machines if they do not provide any designated services apart from those listed in these AML/CTF Rules.

 

If the reporting entity is related to one or more reporting entities within the meaning of section 50 of the Corporations Act 2001, the exemption will apply only if the related reporting entities collectively do not have an entitlement to operate no more than 15 gaming machines and do not provide any designated services apart from those listed in these AML/CTF Rules.

 

Due to the level of money laundering and terrorism financing risk posed by reporting entities covered by these AML/CTF Rules, it is considered an unnecessary financial and administrative burden for them to comply with all the requirements of the AML/CTF Act. These AML/CTF Rules do not remove the obligation on reporting entities with an entitlement to operate no more than 15 gaming machines to make suspicious matter reports under section 41 of the Act.

 

The following Table sets out the provisions of the AML/CTF Act from which reporting entities are exempt:

 

Class of Provision

Application

Relevant to

Part 2, Division 2

Whole division

Identification procedures for pre-commencement customers

Part 2, Division 3

Whole division

Identification procedures for low-risk customers

Part 2, Division 4

Whole division

Applicable customer identification procedures

Part 2, Division 5

Whole division

Verification of customer identity

Part 2, Division 6

Whole division

Ongoing customer due diligence

Part 2, Division 7

Sections 37, 38

General provisions relating to applicable customer identification procedures

Part 3, Division 3

Section 43 only

Threshold transaction reports.

Part 3, Division 4

Section 45 only

International funds transfer instructions reports. Section 46 defines an ‘international funds transfer instructions’. Reporting entities are not exempt from the definitions contained in the AML/CTF Act

Part 3, Division 5

Whole division

Compliance reports

Part 5

Whole Part

Electronic funds transfer instructions

Part 7

Whole Part

AML/CTF Programs

Part 10

Sections 104, 105, 106, 109, 110, 111, 112, 113, 114, 115, 116, 117, 118, 119 only

Exempt from record keeping provisions except for section 107 which relates to keeping transaction records and section 108 which relates to documents provided by customers. 

 

Chapter 52 will not exempt the relevant reporting entities from Parts 11 to 18 of the AML/CTF Act as these are the machinery provisions of the Act. They comprise:

 

  Part 11  Secrecy and Access

  Part 12  Offences

  Part 13  Audit

  Part 14  Information-gathering powers

  Part 15  Enforcement

  Part 16  Administration

  Part 17  Vicarious liability

  Part 18  Miscellaneous

 

These AML/CTF Rules do not expressly exempt a reporting entity from a provision of the AML/CTF Act, if the reporting entity is not caught by that provision.

 

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 2011 (No.3).

 

Section 2

 

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

 

Section 3

 

This section contains the Schedule which amends Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (No.1) as follows:

 

Schedule 1

 

This schedule adds Chapter 52.  

 

 

 

 

3. Notes on paragraphs

 

Chapter 52

 

Paragraph 52.1

 

This paragraph specifies that these AML/CTF Rules have been made under section 229 of the AML/CTF Act for the purposes of subsection 247(4) of that Act.

 

Paragraph 52.2

 

This paragraph contains a Table setting out those provisions of the AML/CTF Act that do not apply to reporting entities providing the designated services listed in paragraph 52.3 in the circumstances specified in paragraph 52.4.

 

Paragraph 52.3

 

This paragraph lists the designated services which the provisions of the AML/CTF Act set out in the Table in paragraph 52.2 do not apply if the circumstances specified in paragraph 52.4 are met. 

 

Paragraph 52.4

 

This paragraph specifies the circumstances which must apply to allow a reporting entity to use the exemption specified in paragraph 52.2.

 

4. Legislative instruments

 

These 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 a beneficial impact on any reporting entity that provides a designated service in the circumstances covered by these Rules.

 

6. Assessment of benefits

 

These AML/CTF Rules will exempt relevant reporting entities from certain provisions of the AML/CTF Act in specified circumstances and accordingly will substantially reduce compliance costs for those reporting entities.

7. Consultation

 

AUSTRAC has consulted with the Office of the Australian Information Commissioner, the Australian Customs and Border Protection Service, the Australian Federal Police, the Australian Taxation Office and the Australian Crime Commission, in relation to these AML/CTF Rules.  

 

In addition, AUSTRAC consulted widely with State law enforcement agencies, reporting entities providing the relevant designated services and with industry associations.

 

AUSTRAC published a draft of these AML/CTF Rules on its website for public comment.

 

8. Ongoing consultation

 

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

 

 

 

 

 

 

 

Overview

The Anti-Money Laundering and Counter-Terrorism Financing Rules Amendment Instrument 2011 (No. 3) was enacted to address the need for tailored regulatory requirements for reporting entities that operate a limited number of gaming machines, specifically those licensed to operate no more than 15 machines. This amendment to the Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (No. 1) was introduced under the authority of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act). The policy objective was to reduce the financial and administrative burden on these reporting entities while maintaining the integrity of the AML/CTF framework. The instrument was developed following consultations with various stakeholders, including law enforcement agencies, industry associations, and reporting entities, and is intended to provide a proportionate regulatory approach without compromising the broader objectives of preventing money laundering and counter-terrorism financing.

Scope and Application

The Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (No. 1) Amendment Instrument 2011 (No. 3) introduces Chapter 52, which provides specific exemptions for reporting entities that are licensed to operate no more than fifteen gaming machines. These entities are exempt from certain provisions of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 if they do not provide any designated services other than those listed in these rules. This exemption applies to reporting entities that are related under the Corporations Act 2001, provided that the related entities collectively do not exceed the limit of fifteen gaming machines and do not offer any designated services beyond those specified. The exemptions are intended to alleviate the financial and administrative burden on these entities, given the perceived lower risk of money laundering and terrorism financing associated with their operations. However, entities remain obligated to report suspicious matters under section 41 of the AML/CTF Act and must still comply with other specified provisions of the Act, including record-keeping requirements as outlined in sections 107 and 108. These AML/CTF Rules do not affect the machinery provisions of the Act, which include secrecy, offences, audit, information-gathering powers, enforcement, administration, vicarious liability, and miscellaneous provisions.

Key Provisions

The Anti-Money Laundering and Counter-Terrorism Financing Rules Amendment Instrument 2011 (No.3) introduces Chapter 52 to the Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (No.1), amending the rules under section 229 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act). This new Chapter 52 provides exemptions from certain AML/CTF Act provisions for reporting entities that are licensed to operate no more than 15 gaming machines and provide designated services specified in the new rules (paragraphs 52.2 and 52.3). These exemptions apply if the reporting entities do not provide any designated services apart from those listed in Chapter 52 and meet the criteria outlined in paragraph 52.4, such as not being related to other entities that collectively exceed the 15-machine limit (section 247(4) of the AML/CTF Act). The obligations imposed by these new rules require reporting entities within the scope of Chapter 52 to adhere to specific conditions to benefit from the exemptions. These entities must operate no more than 15 gaming machines under licences from one or more States or Territories and must not provide designated services beyond those listed in the rules. If related entities are involved, they must collectively not exceed the 15-machine limit and must also adhere to the designated services stipulations (section 50 of the Corporations Act 2001). Despite the exemptions, these entities remain obligated to report suspicious matters under section 41 of the AML/CTF Act. Breaching the provisions outlined in Chapter 52 could result in significant consequences. Although specific penalties are not detailed in the explanatory statement, violations of the AML/CTF Act generally attract penalties under sections 12.1 and 12.2 of the Act, which can include fines and imprisonment. The maximum penalties for non-compliance with AML/CTF Act requirements can be substantial, reflecting the seriousness with which the Australian government treats money laundering and terrorism financing activities. The non-compliance not only risks these penalties but also could damage the reputation and operational standing of the reporting entity.

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Anti-Money Laundering Law
Financial Regulation
Instrument
Regulation
Concepts
Definitions & Interpretation
Exemptions & Exclusions
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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.