Anti-Money Laundering and Counter-Terrorism Financing Rules Amendment Instrument 2012 (No. 3)

Administered by Attorney-General's Department

Legislation au F2012L01352 Rules Not in force Legislative Instrument

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Explanatory Statement – Anti-Money Laundering and Counter-Terrorism Financing Rules Amendment Instrument 2012 (No. 3) 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 Chapter 39

 

  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 39

 

2.  Section 39 (General exemptions) of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) specifies designated services to which all or certain provisions of Part 2 (Identification procedures) of the Act do not apply.  Subsection 39(4) specifies that the AML/CTF Rules may provide that a specified provision of Part 2 does not apply to a designated service that is provided in the circumstances specified in the AML/CTF Rules.

3.  Chapter 39 of the AML/CTF Rules provides an exemption from the applicable customer identification procedure (ACIP) relating to premium funding loans for a general insurance policy.  Insurance premium funding involves a loan to a customer to pay for the premium of an insurance policy, where the lender and the insurer are not the same entity.

4.  Currently, paragraph 39.3 of Chapter 39 will repeal the Chapter on 30 June 2012.  The amendments to Chapter 39 repeal paragraph 39.3; thereby allowing the exemption contained in the Chapter to continue to operate beyond 30 June 2012.

 


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

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

 

6.                   The Statement of Compatibility for Anti-Money Laundering and Counter-Terrorism Financing Rules Amendment Instrument 2012 (No.3) is included in this Explanatory Statement at page 4. 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.3).

 

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 Chapter 39.

3. Notes on items

Item 1

This item repeals paragraph 39.3 to allow the Chapter to continue in operation beyond 30 June 2012.

Item 2

This item renumbers paragraph 39.4 as paragraph 39.3.


Item 3

This item amends the details of the website address for the Office of the Australian Information Commissioner from http://www.privacy.gov.au to http://www.oaic.gov.au.

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 an impact on any reporting entity that provides a designated service covered by these AML/CTF Rules.

6. Assessment of benefits

The amendments to Chapter 39 will allow the exemption contained in the Chapter to continue in operation beyond 30 June 2012.  These amendments will afford premium funders continued relief from the regulatory burden associated with conducting the applicable customer identification procedure relating to premium funding loans for a general insurance policy from 1 July 2012 onwards.

7. Consultation

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

AUSTRAC also published the draft amendments to Chapter 39 on its website for public consultation. 

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. 3)

 

 

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 Chapter 39 of the Anti-Money Laundering and Counter-Terrorism Financing Rules.

 

The amendments remove the paragraph which repeals the Chapter on 30 June 2012; thereby allowing the exemption contained in the Chapter to continue in operation beyond 30 June 2012.

 

Human rights implications

The amendments are compatible with the human rights and freedoms recognised or declared in the international instruments listed in the definition of ‘human rights’ in subsection 3(1) of the Human Rights (Parliamentary Scrutiny) Act 2011.  In particular, it is considered that the amendments advance the protection of the human rights relevant to privacy and reputation.  The exemption contained in Chapter 39 removes the obligation on premium funders to collect identity information from their customers in relation to the provision of premium funding loans for general insurance policies.  The amendments allow this exemption to continue in operation beyond 30 June 2012. 

 

Conclusion

 

This Instrument is compatible with human rights as it advances the protection of human rights relevant to privacy and reputation.

 

 

 

 

 

John Lance Schmidt

Chief Executive Officer

Australian Transaction Reports and Analysis Centre

 

Overview

The Anti-Money Laundering and Counter-Terrorism Financing Rules Amendment Instrument 2012 (No. 3) amends the Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (No. 1). Enacted by the Parliament of Australia, this legislative instrument aims to address a gap in the existing regulatory framework by extending the exemption for premium funding loans for general insurance policies beyond 30 June 2012. This amendment responds to the need for continued regulatory relief for premium funders while maintaining compliance with anti-money laundering and counter-terrorism financing laws. The policy objective is to protect the human rights relevant to privacy and reputation by reducing the regulatory burden on entities involved in premium funding loans for general insurance policies. AUSTRAC, the rule-maker, has ensured the amendments are compatible with human rights as recognised or declared in the international instruments listed in the Human Rights (Parliamentary Scrutiny) Act 2011.

Scope and Application

The Anti-Money Laundering and Counter-Terrorism Financing Rules Amendment Instrument 2012 (No. 3) pertains to the Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (No. 1), and is designed to modify Chapter 39 of the rules. This amendment applies to entities and individuals involved in designated services, particularly those offering premium funding loans for general insurance policies, which are otherwise exempt from specific identification procedures under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act). The legislative instrument operates within the Australian Commonwealth, affecting entities that must comply with the AML/CTF Act. The changes allow the exemption for premium funding loans to continue beyond the original repeal date of 30 June 2012, ensuring that premium funders are not burdened with the requirement to collect identity information for these specific transactions. The amendments are compatible with human rights, as they facilitate the protection of privacy and reputation by maintaining the exemption for certain identification procedures.

Key Provisions

The Anti-Money Laundering and Counter-Terrorism Financing Rules Amendment Instrument 2012 (No. 3) amends Chapter 39 of the Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (No. 1). This amendment involves the repeal of paragraph 39.3, which previously stipulated that Chapter 39 would cease to apply from 30 June 2012. By removing this repeal clause, the amendment allows the exemption contained within Chapter 39 to continue to operate beyond that date, effectively extending the exemption for premium funding loans related to general insurance policies. This means that entities providing such loans are not required to implement certain customer identification procedures from 1 July 2012 onwards. The obligations imposed by this amendment on reporting entities involve the continuation of the exemption for premium funding loans for general insurance policies. This means that entities providing such loans must ensure that they do not implement the applicable customer identification procedures (ACIP) as specified in Part 2 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act). These entities must remain compliant with the amended rules and ensure that their practices align with the continued exemption. It is important for these entities to update their internal policies and procedures to reflect the ongoing exemption and to ensure that they do not inadvertently collect unnecessary identity information from their customers. There are no specific offences, penalties, or civil/criminal consequences mentioned in the text for breach of these amended rules. However, entities that fail to comply with the AML/CTF Act and the associated rules could potentially face enforcement actions, including fines and other penalties as stipulated by the Act. The exact penalties would depend on the nature and severity of the breach, but they could include significant financial penalties, public reprimands, or even criminal charges in cases of severe or repeated non-compliance. The enforcement actions would be determined by the AUSTRAC Chief Executive Officer, who has the authority to impose penalties under the AML/CTF Act.

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