Anti-Money Laundering and Counter-Terrorism Financing Rules Amendment Instrument 2018 (No. 3)

Overview

The Anti-Money Laundering and Counter-Terrorism Financing Rules Amendment Instrument 2018 (No. 3) amends the Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (No. 1) to address the complexities in reporting obligations for registered remittance affiliates under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act). The Australian Transaction Reports and Analysis Centre (AUSTRAC), as the rule-maker, introduced these amendments to clarify the language around recurring reporting and lodgement periods, and to specify exemptions for registered remittance affiliates from certain compliance reporting requirements. Previously, AUSTRAC had exempted both registered remittance network providers and their affiliates due to incompatibility with the compliance reporting framework, but has since determined that this exemption is no longer appropriate for remittance network providers. The instrument also ensures ongoing consultation with relevant stakeholders to monitor the impact of these changes. The Office of Best Practice Regulation has advised that a Regulatory Impact Statement is not required for these amendments, which are considered minor and machinery in nature. Additionally, a Statement of Compatibility with the Human Rights (Parliamentary Scrutiny) Act 2011 confirms that the instrument does not engage any of the applicable rights or freedoms, thus it is compatible with human rights.

Scope and Application

The Anti-Money Laundering and Counter-Terrorism Financing Rules Amendment Instrument 2018 (No. 3) amends the Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (No. 1) by updating Chapter 11 to refine the language surrounding recurring reporting and lodgement periods. This legislative instrument applies to registered remittance affiliates who must comply with the Anti-Money Laundering and Counter-Terrorism Financing Act 2006. The changes focus on clarifying when these entities are exempt from certain compliance reporting obligations, particularly distinguishing between registered remittance network providers and their affiliates. Registered remittance affiliates that provide designated services other than those listed in items 31 and 32 of Table 1 in subsection 6(2) of the AML/CTF Act, or that provide services as a registered remittance network provider or an independent remittance dealer, will need to submit a Compliance Report for that year. The amendments are designed to ensure a more precise application of reporting requirements while maintaining the integrity of the anti-money laundering and counter-terrorism financing framework. This amendment applies on a national level across Australia, aligning with the overarching objectives of the AML/CTF Act.

Key Provisions

The Anti-Money Laundering and Counter-Terrorism Financing Rules Amendment Instrument 2018 (No. 3) primarily modifies Chapter 11 of the Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (No. 1). Section 229 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) empowers the AUSTRAC Chief Executive Officer to create AML/CTF Rules that align with the Act's requirements. The changes introduced by this Instrument aim to refine the language used in recurring reporting and lodgement periods and to clearly outline the conditions under which registered remittance affiliates are exempt from compliance reporting obligations. Registered remittance network providers (RNPs) are now excluded from the exemption that previously applied to both RNPs and their affiliates, reflecting the re-designed compliance reporting framework. Registered remittance affiliates, however, continue to be exempt from the requirement to lodge a compliance report due to ongoing incompatibility with the framework. Nevertheless, specific conditions have been added to clarify when registered remittance affiliates must submit a Compliance Report, such as when they provide designated services beyond those listed in Table 1 or when they provide certain services as an RNP or an independent remittance dealer. The obligations imposed by the Amendment Instrument on the relevant parties include adherence to the newly defined reporting periods and conditions. Registered remittance affiliates must be particularly mindful of the specified conditions that require them to submit a Compliance Report. The Instrument also mandates ongoing consultation by AUSTRAC with various stakeholders, such as the Australian Taxation Office, the Department of Home Affairs, and others, to ensure the smooth operation of these AML/CTF Rules. Failure to comply with the requirements outlined in the AML/CTF Rules could lead to legal repercussions. While the specific penalties for non-compliance are not detailed in the Instrument, breaches of the AML/CTF Act generally attract significant penalties, including fines and imprisonment. The exact penalties depend on the nature and severity of the offence but underscore the seriousness with which the Act treats non-compliance. AUSTRAC will likely enforce these penalties to ensure adherence to the AML/CTF Rules, reflecting the critical role these rules play in combating money laundering and counter-terrorism financing.