The Federal Government’s new draft anti-money laundering laws are serious and need careful consideration given their broad scope and complexity said Ros Grady, Mallesons Stephen Jaques’ partner and anti-money laundering expert.

For example, Ros Grady said, any person who provides designated services in relation to a broad range of financial services will be covered. Relevant services include those relating to any form of credit, funds transfers, finance leases, superannuation products, various forms of security and payment products, stored value cards as well as certain personal advice services. Others required to comply include anyone who provides a gambling service and who buys or sells bullion.

“This potentially very broad scope of coverage means that the draft bill needs to be carefully reviewed by organisation to see if they are covered. Because the scope of application is activity based no organisation should assume that they are not covered. It will be important to use the four month submission period to make comments on the appropriateness and practicality of the bill’s provisions,” she said.

Ms Grady went on to say that this could take some time as the draft legislation is some 230 pages long and contains extensive provision dealing with, for example, customer due diligence, suspicious activity reporting and an obligation to have a broadly based anti-money laundering and counter terrorism financing program.

“In some ways the scale and complexity of these proposed laws is analogous to the 2001 Financial Services Reform Act and will require similar extensive changes to the way that many Australian companies do business,” said Grady.

“It is important that organisations begin carefully reviewing these laws now so they can make submissions and begin to get their anti-money laundering programs in order.”

For more information, read our overview of the new anti-money laundering Bill and the proposed Rules.