Explanatory
Statement – Amendment of Anti-Money Laundering and Counter-Terrorism
Financing Rules Instrument 2007 (No. 1)
1. Purpose
and operation of Anti-Money Laundering and Counter-Terrorism Financing Rules
(AML/CTF Rules) adding Chapter 52 of the AML/CTF Rules
Section 229 of the Anti-Money
Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) provides that the AUSTRAC Chief Executive Officer (AUSTRAC CEO) may, by writing, make
AML/CTF Rules prescribing matters required or permitted by any other provision
of the AML/CTF Act.
Chapter
52 ‘Persons who are licensed to operate no more than 15 gaming machines’
Subsection 247(4) of the AML/CTF Act
allows exemption from a specified provision of the AML/CTF Act in relation to a
designated service that is provided in circumstances specified in the AML/CTF
Rules.
These AML/CTF Rules exempt from
specified provisions of the Act a reporting entity that has a total entitlement
under licences issued by one or more States or Territories to operate no more
than fifteen gaming machines if they do not provide any designated services
apart from those listed in these AML/CTF Rules.
If the reporting entity is related to
one or more reporting entities within the meaning of section 50 of the Corporations
Act 2001, the exemption will apply only if the related reporting entities
collectively do not have an entitlement to operate no more than 15 gaming
machines and do not provide any designated services apart from those listed in
these AML/CTF Rules.
Due to the level of money laundering and
terrorism financing risk posed by reporting entities covered by these AML/CTF
Rules, it is considered an unnecessary financial and administrative burden for them
to comply with all the requirements of the AML/CTF Act. These AML/CTF Rules do
not remove the obligation on reporting entities with an entitlement to operate
no more than 15 gaming machines to make suspicious matter reports under section
41 of the Act.
The following Table sets out the
provisions of the AML/CTF Act from which reporting entities are exempt:
|
Class of Provision
|
Application
|
Relevant to
|
|
Part 2, Division 2
|
Whole division
|
Identification procedures for
pre-commencement customers
|
|
Part 2, Division 3
|
Whole division
|
Identification procedures for low-risk
customers
|
|
Part 2, Division 4
|
Whole division
|
Applicable customer identification
procedures
|
|
Part 2, Division 5
|
Whole division
|
Verification of customer identity
|
|
Part 2, Division 6
|
Whole division
|
Ongoing customer due diligence
|
|
Part 2, Division 7
|
Sections 37, 38
|
General provisions relating to
applicable customer identification procedures
|
|
Part 3, Division 3
|
Section 43 only
|
Threshold transaction reports.
|
|
Part 3, Division 4
|
Section 45 only
|
International funds transfer
instructions reports. Section 46 defines an ‘international funds transfer
instructions’. Reporting entities are not exempt from the definitions contained
in the AML/CTF Act
|
|
Part 3, Division 5
|
Whole division
|
Compliance reports
|
|
Part 5
|
Whole Part
|
Electronic funds transfer instructions
|
|
Part 7
|
Whole Part
|
AML/CTF Programs
|
|
Part 10
|
Sections 104, 105, 106, 109, 110, 111,
112, 113, 114, 115, 116, 117, 118, 119 only
|
Exempt from record keeping provisions
except for section 107 which relates to keeping transaction records and
section 108 which relates to documents provided by customers.
|
These
AML/CTF Rules do not expressly exempt a reporting entity from a provision of
the AML/CTF Act, if the reporting entity is not caught by that provision.
2. Notes on sections
Section
1
This
section sets out the name of the instrument, i.e. the Anti-Money Laundering
and Counter-Terrorism Financing Rules Amendment Instrument 2011 (No.3).
Section
2
This
section specifies that Schedule 1 commences on the day after it is registered.
Section
3
This
section contains the Schedule which amends Anti-Money Laundering and
Counter-Terrorism Financing Rules Instrument 2007 (No.1) as follows:
Schedule
1
This schedule adds
Chapter 52.
3. Notes
on paragraphs
Chapter
52
Paragraph
52.1
This
paragraph specifies that these AML/CTF Rules have been made under section 229
of the AML/CTF Act for the purposes of subsection 247(4) of that Act.
Paragraph 52.2
This
paragraph contains a Table setting out those provisions of the AML/CTF Act that
do not apply to reporting entities providing the designated services listed in
paragraph 52.3 in the circumstances specified in paragraph 52.4.
Paragraph
52.3
This
paragraph lists the designated services which the provisions of the AML/CTF Act
set out in the Table in paragraph 52.2 do not apply if the circumstances
specified in paragraph 52.4 are met.
Paragraph
52.4
This
paragraph specifies the circumstances which must apply to allow a reporting
entity to use the exemption specified in paragraph 52.2.
4. Legislative instruments
These
AML/CTF Rules are legislative instruments as defined in section 5 of the Legislative
Instruments Act 2003.
5. Likely
impact
These
AML/CTF Rules will have a beneficial impact on any reporting entity that
provides a designated service in the circumstances covered by these Rules.
6. Assessment
of benefits
These
AML/CTF Rules will exempt relevant reporting entities from certain provisions
of the AML/CTF Act in specified circumstances and accordingly will
substantially reduce compliance costs for those reporting entities.
7. Consultation
AUSTRAC
has consulted with the Office of the Australian Information Commissioner, the Australian Customs and Border Protection Service,
the Australian Federal Police, the Australian Taxation Office and the
Australian Crime Commission, in relation to these AML/CTF Rules.
In
addition, AUSTRAC consulted widely with State law enforcement agencies,
reporting entities providing the relevant designated services and with industry
associations.
AUSTRAC
published a draft of these AML/CTF Rules on its website for public comment.
8. Ongoing
consultation
AUSTRAC
will conduct ongoing consultation with stakeholders on the operation of these
AML/CTF Rules.