EXPLANATORY STATEMENT
Anti-Money Laundering and Counter-Terrorism Financing Act 2006
Anti-Money Laundering and Counter-Terrorism Financing Rules Amendment Instrument 2019 (No. 3)
Issued by authority of Nicole Rose PSM, Chief Executive Officer, Australian Transaction Reports and Analysis Centre, in compliance with section 15J of the Legislation Act 2003
AUTHORITY
Section 229 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act), provides that the AUSTRAC CEO may, by legislative instrument, make rules prescribing matters required or permitted by the AML/CTF Act to be prescribed by the rules.
Purpose and operation of the instrument
These Rules are a legislative instrument for the purposes of the Legislation Act 2003.
Details of the Rules are set out in the Attachment A.
A Statement of Compatibility with Human Rights (the Statement) has been completed in accordance with the Human Rights (Parliamentary Scrutiny) Act 2011. The overall assessment is that the Rules are compatible with human rights because to the extent that they may limit human rights, those limitations are reasonable, necessary and proportionate. A copy of the Statement is at Attachment B.
Background
Amendments to Chapter 11 (Compliance Report—reporting and lodgment periods)
Subsection 47(2) of the AML/CTF Act requires reporting entities to give the AUSTRAC CEO a report relating to their compliance with the Act and the Anti-Money Laundering and Counter-Terrorism Financing rules Instrument 2007 (No. 1) (AML/CTF Rules). Subsection 47(1) of the AML/CTF Act provides for the AML/CTF Rules to specify the relevant period that the report must cover, as well as the period in which the report may be lodged.
These reporting and lodgment periods are specified in Chapter 11 of the AML/CTF Rules.
These Rules make a number of minor and technical revisions to the current drafting of these provisions, including:
- The reporting period in paragraph 11.2 is now specified to be “each successive period of 12 months beginning on 1 January and ending on 31 December”, and the lodgment period is specified in paragraph 11.3 to be “the period of 3 months beginning at the end of each successive reporting period”. This would mean that for the 2019 reporting period (being the period from 1 January to 31 December), a reporting entity would be required to submit their Compliance Report between 1 January 2020 and 31 March 2020.
- The drafting of paragraph 11.4 has been simplified, including by removing references to the 2018 and 2019 calendar years, to ensure that annual amendments to the Chapter are no longer required. These amendments are not intended to change the substantive effect of the provisions, but are intended to simplify the drafting to aid readability and clarify reporting entities’ obligations.
Amendments to Chapter 51 (AML/CTF Rules relating to certain definitions under the AML/CTF Act - Ordering and Beneficiary Institutions, Financial Institutions and Non-Financiers)
Part 51.2 of the AML/CTF Rules contains obsolete references to two companies, one of which is no longer operating in Australia and has been deregistered by ASIC (KEB Australia Limited ABN 11 003 095 181), while the other entity (Travelex GBP Australia Pty Limited ABN 24 150 129 749) has changed its legal name (now Western Union Business Solutions (Australia) Pty Ltd). The Rules amend this Part to remove references to the de-registered company and correctly identify the other entity.
Consultation
AUSTRAC published the amendments to Chapter 11 of the AML/CTF Rules on its website for public consultation from 15 October 2019 to 12 November 2019. AUSTRAC also consulted with the Australian Taxation Office, the Department of Home affairs, the Australian Federal Police, the Australian Criminal Intelligence Commission and the Office of the Australian Information Commissioner.
AUSTRAC did not undertake any consultation in relation to the amendments to Chapter 51, given that these changes are minor and machinery in nature and do not affect the rights or obligations of any party.
Regulation impact statement
The Office of Best Practice Regulation has confirmed that the Rules are unlikely to have more than a minor regulatory impact on business, community organisations or individuals. A Regulatory Impact Statement was not required to be prepared.
ATTACHMENT A
Anti-Money Laundering and Counter-Terrorism Financing Rules Amendment Instrument 2019 (No. 3)
Section 1
This section provides that the name of the Instrument is the Anti-Money Laundering and Counter-Terrorism Financing Rules Amendment Instrument 2019 (No. 3).
Section 2
This section sets out the date on which the Instrument will commence.
The Instrument commences on the day after it is registered on the Federal Register of Legislation.
Section 3
This section identifies the provision of the AML/CTF Act that authorises the making of the Instrument.
Section 4
This section provides that the instrument that is specified in Schedule 1 is amended as set out in the applicable items in that Schedule.
Schedule 1—Amendments
Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (No. 1
Notes on items
Item 1
This item repeals and replaces existing Chapter 11 of the AML/CTF Rules.
Item 2
This item repeals and replaces existing Part 51.2 of the AML/CTF Rules.
ATTACHMENT B
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Australian Human Rights Commission Regulations 2019
This Disallowable Legislative 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 Disallowable Legislative Instrument
The amendments to Chapter 11 of the AML/CTF Rules simplify the language around recurring reporting and lodgement periods, and specify the circumstances and periods in which registered remittance affiliates are exempted from the reporting obligations set out in section 47 of the AML/CTF Act.
The amendments to Chapter 51 of the AML/CTF Rules remove and replace obsolete references to two companies.
Human rights implications
AUSTRAC has assessed whether the Disallowable Legislative Instrument is likely to engage any of the applicable human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. As the amendments are minor and technical in nature, and do not alter any existing rights or obligations, AUSTRAC is satisfied that the none of the applicable rights or freedoms are engaged.
Conclusion
This Disallowable Legislative Instrument is compatible with human rights as it does not raise any human rights issues.
Nicole Rose PSM
Chief Executive Officer
Australian Transaction Reports and Analysis Centre