AML/CTF legislation
Australia has a robust regime to detect and deter money laundering and terrorism financing. The legal framework comprises the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act), which establishes obligations that are supervised and regulated by the Australian Transaction Reports and Analysis Centre (AUSTRAC).
The AML/CTF Act represents the first tranche of AML/CTF reforms, and largely replaced the Financial Transaction Reports Act 1988. The AML/CTF Act brings Australia into line with international standards, including those set by the Financial Action Task Force.
The AML/CTF Act establishes obligations for any entity that provides services designated under the Act. In broad terms, the AML/CTF Act applies to services provided by financial institutions, gambling service providers, bullion dealers and remittance dealers.
The AML/CTF Act imposes four key obligations on regulated businesses to detect and deter money laundering, and to provide financial intelligence to revenue and law enforcement agencies:
- customer due diligence: identifying and verifying customer’s identity, and ongoing monitoring of transactions
- reporting: notifying authorities of suspicious matters, threshold transactions and international funds transfer instructions
- record keeping: businesses are required to keep records of transactions, customer identification, electronic funds transfer instructions and details of AML/CTF programs
- establishing and maintaining an AML/CTF program for their business: these programs will help identify, mitigate and manage the ML/TF risks a business faces.
The AML/CTF Act implements a risk-based approach to regulation. Businesses will determine how they meet their obligations by assessing the risk that providing a designated service to a customer will facilitate money laundering or terrorism financing.
The AML/CTF Act sets out general principles and obligations. Details of how these obligations are to be carried out are set out in subordinate legislative Instruments known as the AML/CTF Rules.
All relevant Rules and Regulations are available on AUSTRAC’s web site.