On 7 December 2006, the Australian Senate passed the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) and the Anti-Money Laundering and Counter-Terrorism Financing (Transitional Provisions and Consequential Amendments) Act 2006. There are heavy penalties for non compliance.

The Acts passed the House of Representatives on 28 November. Both are expected to have Royal Assent in the near future (most likely in early January 2007).

What does this mean to you?

The Acts are likely to impose new obligations on most Australian financial service providers (including any offshore operations). “Reporting entities” should be considering as a matter of urgency what steps need to be taken to comply.

When does AML/CTF start?

This important legislation will commence in stages over 24 months with some aspects starting the day after Royal Assent.

The commencement time frame for some important obligations appears below.

All obligations will be subject to a 15 month “non-prosecution period” where the reporting entity is making good faith efforts to comply. Obligations about customer identification procedures will commence progressively over 24 months.

AML/CTF Rules

Final AML/CTF Rules have not yet been publicly released. AUSTRAC has released near-final Rules about the particulars to be included on the register of providers of designated remittance services. The obligation for providers of registrable designated remittance services to be registered will commence the day after Royal Assent.

Key AML/CTF Rules that are expected but not yet available in final form include:

• content of joint AML/CTF programs covering a group of reporting entities
• customer identification procedures
• exemptions for low-value gaming services.

The Government has confirmed that there is no proposal to make Rules for all circumstances where the AML/CTF Act allows Rules to be made. AUSTRAC has released a list showing whether Rules are proposed to be made and the indicative timing.

Summary of AML/CTF legislation

Details of the Acts as introduced to Parliament are included in our 2 November 2006 Alert: "Revised Anti-Money Laundering Bill introduced into Parliament".

Senate Committee Report

The Senate Committee on Legal and Constitutional Affairs in its final report suggested that some changes be made to the Acts before they were passed. The Senate did not make any changes that affect the way that the Acts will apply to reporting entities.

We can help you by

• interpreting this complex legislation and assess its impact on your organisation
• designing your AML/CTF risk based compliance program
• providing solutions to regulatory overlap (eg AML/CTF and privacy)
• advising about the impact on documents, procedures, systems, people and customers
• providing an ongoing framework for your development of new products
• ensuring international consistency and compliance
• assisting in developing employee and third party AML/CTF training programs
• liaising with AUSTRAC
• providing solutions to regulatory action
• designing AML/CTF implementation assessments/reviews.