Anti-Money Laundering and Counter-Terrorism Financing Rules Amendment Instrument 2020 (No. 1)

Administered by Department of Home Affairs

Legislation au F2020L00427 Rules Not in force Legislative Instrument

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EXPLANATORY STATEMENT

 

Anti-Money Laundering and Counter-Terrorism Financing Act 2006

Anti-Money Laundering and Counter-Terrorism Financing Rules Amendment Instrument 2020 (No. 1)

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 promote the realisation of human rights, and as such, are compatible with them. A copy of the Statement is at Attachment B.

Background

Addition of Chapter 77 (Exemption from the applicable customer identification procedure for the purposes of Schedule 13 to the Coronavirus Economic Response Package Omnibus Act 2020)

  1. A new Chapter of the Anti-Money and Counter-Terrorism Financing Rules (AML/CTF Rules), Chapter 77, is part of the Australian Government’s response to the COVID-19 pandemic. It is a time-limited measure that provides a reporting entity with an exemption from section 32 of the AML/CTF Act to facilitate the early release of superannuation to those individuals approved by the Australian Taxation Office (ATO) as meeting the relevant criteria.
  2. The draft AML/CTF Rules will exempt a reporting entity that is providing designated service described in item 43 or 45 of table 1 in section 6 of the AML/CTF Act from the requirement to carry out the applicable customer identification procedure on their customers before making payments under the early release of superannuation initiative.
  3. Reporting entities will still have suspicious matter reporting and ongoing customer due diligence obligations relating to the provision of the relevant designated service.              

 

Consultation

4.       Draft AML/CTF Rules were circulated for comment to the Superannuation Industry, Finance Sector Industry Groups, the Australian Federal Police, the Australian Taxation Office, the Australian Criminal Intelligence Commission, the Australian Banking Association and the Australian Financial Markets Authority.

Regulation impact statement

5.       The Office of Best Practice Regulation has advised that the proposed addition of Chapter 77 to the AML/CTF Rules is a change which implements a decision of Government that has already been taken in relation to the Coronavirus Economic Package. Therefore a Regulatory Impact Statement was not required to be prepared.

 


ATTACHMENT A

 

Anti-Money Laundering and Counter-Terrorism Financing Rules Amendment Instrument 2020 (No. 1)

Section 1

This section provides that the name of the Instrument is the Anti-Money Laundering and Counter-Terrorism Financing Rules Amendment Instrument 2020 (No. 1).

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 adds Chapter 77 to 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 Instrument will exempt a reporting entity that is providing designated service described in item 43 or 45 of table 1 in section 6 of the AML/CTF Act from the requirement to carry out the applicable customer identification procedure on their customers before making payments under the early release of superannuation initiative to those individuals approved by the Australian Taxation Office as meeting the relevant criteria.

Human rights implications

The Human Rights (Parliamentary Scrutiny) Act 2011 requires that Statements of Compatibility must be made by the rule-maker with regard to disallowable legislative instruments, and must contain an assessment of whether the legislative instrument is compatible with the rights and freedoms recognised in the seven core international human rights treaties that Australia has ratified.

The Instrument engages the right to an adequate standard of living, including food, water and housing, as outlined in Article 11 of the International Covenant on Economic, Social and Cultural Rights (ICESCR).

Article 11 of ICESCR requires countries who are party to the Covenant to recognise the right of everyone to an adequate standard of living, including adequate food, clothing and housing, and to the continuous improvement of living conditions. State Parties should take appropriate steps to ensure the realisation of this right.

The Instrument will allow reporting entities providing a designated service of a kind mentioned in item 43 or 45 of table 1 in section 6 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) to facilitate the timely payment of funds to eligible customers.

Taking this step will assist a significantly large number of individuals affected by the adverse economic effects of the COVID 19 pandemic to have essential and quick access to a portion of their superannuation or retirement savings. Timely access to these funds will help individuals pay imminent bills, including for groceries, water and rent. This is an appropriate measure to support an adequate standard of living during the COVID 19 pandemic.

The Instrument is consistent with the right for a person not to be subjected to arbitrary or unlawful interference with his or her privacy under Article 17 of the International Covenant Civil and Political Rights (ICCPR). Reporting entities that operate superannuation funds will collect personal information in order to identify the customer and establish an account. This identification of the customer is an important part of a reporting entity’s customer due diligence obligations under the AML/CTF Act. When handling this personal information collected pursuant to these obligations, reporting entities must comply with the Privacy Act 1988.

Reporting entities will collect limited personal information about a customer from the Australia Taxation Office (ATO) where the ATO has approved the early release of superannuation to the customer under subregulation 4.22B(3) of the Retirement Savings Account Regulations 1997 or subregulation 6.19B(3) of the Superannuation Industry (Supervision) Regulations 1994.

This collection of personal information is necessary and proportionate to allow the reporting entity to confirm that the identity of the person that applied to the ATO for approval to receive an early payment from a specified account is the same as the identity of the customer who holds owns the specified account. The collection and use of a person’s personal information in this way is not arbitrary or unlawful, and necessary to protect against incorrect payments and fraud.

Conclusion

This Disallowable Legislative Instrument promotes the realisation of human rights, and as such, is compatible with them.

 

 

Nicole Rose PSM

Chief Executive Officer

Australian Transaction Reports and Analysis Centre

Overview

The Anti-Money Laundering and Counter-Terrorism Financing Act 2006 was enacted to safeguard Australia's financial system from the risks of money laundering and terrorism financing. This legislation was introduced to address the need for robust mechanisms to detect, prevent, and respond to financial crimes that could undermine the integrity and stability of the financial system. The Act was enacted by the Parliament of Australia and aims to ensure that Australia complies with its international obligations under various United Nations conventions and Financial Action Task Force recommendations. The Anti-Money Laundering and Counter-Terrorism Financing Rules Amendment Instrument 2020 (No. 1) is a legislative instrument made under the authority of section 229 of the AML/CTF Act, allowing the Chief Executive Officer of the Australian Transaction Reports and Analysis Centre (AUSTRAC) to amend the AML/CTF Rules. This particular amendment was introduced as a response to the COVID-19 pandemic, aiming to facilitate the early release of superannuation funds to those in financial hardship while maintaining compliance with anti-money laundering and counter-terrorism financing obligations. The amendment includes a new Chapter 77 in the AML/CTF Rules, providing a temporary exemption from certain customer identification procedures for designated services, such as banking and financial services, to support the rapid disbursement of superannuation funds. This measure was designed to alleviate the immediate economic pressures faced by Australians during the pandemic. Despite the exemption, reporting entities remain obligated to adhere to suspicious matter reporting and ongoing customer due diligence requirements. The drafting process involved consultations with various stakeholders, including industry groups and law enforcement agencies, to ensure the balance between regulatory compliance and the urgent need to support affected individuals. A Statement of Compatibility with Human Rights has been prepared, confirming that the amendment promotes the realisation of human rights and is compatible with Australia's international human rights obligations.

Scope and Application

The Anti-Money Laundering and Counter-Terrorism Financing Rules Amendment Instrument 2020 (No. 1) amends the Anti-Money Laundering and Counter-Terrorism Financing Rules to include a new Chapter 77, which is part of the Australian Government’s response to the COVID-19 pandemic. This amendment provides a temporary exemption from certain customer identification procedures for reporting entities that are facilitating the early release of superannuation to eligible individuals, as approved by the Australian Taxation Office, under the Coronavirus Economic Response Package Omnibus Act 2020. The exemption applies to designated services as outlined in items 43 or 45 of Table 1 in section 6 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006. Despite this exemption, reporting entities remain obligated to comply with suspicious matter reporting and ongoing customer due diligence requirements. The amendment applies across Australia and is intended to assist individuals in accessing their superannuation funds quickly and efficiently during the economic challenges posed by the pandemic. The exemption is time-limited and is not intended to permanently alter the existing regulatory framework.

Key Provisions

The Anti-Money Laundering and Counter-Terrorism Financing Rules Amendment Instrument 2020 (No. 1) introduces a temporary exemption under Chapter 77 to the existing Anti-Money Laundering and Counter-Terrorism Financing Rules (AML/CTF Rules). This amendment is a response to the economic impacts of the COVID-19 pandemic, specifically to facilitate the early release of superannuation funds. Under section 32 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act), reporting entities are generally required to perform customer due diligence, including customer identification procedures, before making payments. However, Chapter 77 of the AML/CTF Rules Amendment Instrument 2020 (No. 1) exempts reporting entities from this requirement when providing designated services related to the early release of superannuation to individuals approved by the Australian Taxation Office (ATO). This exemption aims to expedite the release of funds to those in financial hardship due to the pandemic. The obligations imposed by the AML/CTF Act on reporting entities remain largely unchanged by this amendment. Reporting entities are still required to maintain ongoing customer due diligence and report any suspicious matters. The exemption under Chapter 77 is narrowly tailored to the specific context of facilitating early superannuation payments. It does not relieve reporting entities of their broader obligations to conduct due diligence, monitor transactions, and report suspicious activities. The rules ensure that while the customer identification procedure is temporarily waived, the entities must still adhere to their core responsibilities to prevent money laundering and counter-terrorism financing. Breaches of the AML/CTF Act, including non-compliance with the amended AML/CTF Rules, can result in both civil and criminal penalties. Under section 402A of the AML/CTF Act, reporting entities can face civil penalties of up to $210,000 for individuals and $1,050,000 for bodies corporate for each contravention. Additionally, under section 411A, individuals can face criminal penalties of up to five years imprisonment, and bodies corporate can be fined up to $5.25 million for each offence. The penalties underscore the importance of compliance with the Act, even within the context of the temporary exemptions provided by Chapter 77. The stringent penalties are designed to deter non-compliance and ensure that the integrity of Australia's financial system is maintained.

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Area of Law
Financial Regulation
Anti-Money Laundering & Counter-Terrorism Financing
Instrument
Regulation
Concepts
Definitions & Interpretation
Offence Provisions
Reporting & Disclosure Obligations
Compliance Obligations
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.