AML Rules – AUSTRAC Consultation to Amend AML Rules
As the result of the recent Statutory Review into the AML/CTF Act AUSTRAC intends to review and revise the AML/CTF Rules. This restructuring is a positive step towards making the, currently cumbersome, Rules more user friendly, and reflect the recommendations of the Statutory Review for Rules simplification.
The consultation period ends on 28th December 2016.
What and Why?
The following is taken from explanatory note for consultation – proposed AML/CTF Rules amendments resulting from the Review of the AML/CTF Act
“AUSTRAC will be undertaking a staged approach to implementing recommendations from the Review of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 and Associated Rules and Regulations (the Review) which are relevant to the AML/CTF Rules.
AUSTRAC seeks stakeholder views on the proposed approach as outlined below:
- • Restructure of the AML/CTF Rules Compilation
- • Progress deregulatory recommendations relevant to the AML/CTF Rules
This proposed implementation will be undertaken concurrently with the consultation on the Review currently underway by the Attorney-General’s Department.
If there is stakeholder support for the proposed approach, further consultation will take place as each item is developed.
Restructure of the current AML/CTF Rules Compilation
It is proposed that the current AML/CTF Rules Compilation should be restructured without undertaking substantive change to its content and existing obligations, in order to make the document more user-friendly.
An outline is attached.
The restructure will form a basis for the substantive simplification of the AML/CTF Rules which will commence in 2017 in consultation with stakeholders.
The restructure will include:
- • Retitling the Compilation
- • Grouping like chapters together, for example, all the exemption chapters
- • Removing redundant and repetitive text without altering the current substantive text and obligations
- • Removal of redundant chapters
- • Clarifying and simplifying existing Chapter titles, while providing titles for those chapters which are not titled, for example, Chapter 4
- • Providing simplified outlines for some chapters to aid stakeholders in understanding their obligations
Deregulatory Recommendations relevant to AML/CTF Rules
Concurrently with the restructure, it is proposed that those Review recommendations relating to the AML/CTF Rules which are deregulatory will be developed and finalised before substantive simplification is undertaken.
An indicative list is attached.
The listed amendments are considered suitable for development as they are not dependent on changes being made to the AML/CTF Act.
AUSTRAC seeks stakeholder input on the list of deregulatory amendments to the AML/CTF Rules, in particular, whether the list should be expanded or reduced.
|Customer Due Diligence
|Rec 5.2: The AML Rules for CDD should be rationalised and simplified as a priority.
||Chapters 4, 15 and 30.
|Rec 5.3: AUSTRAC should consider other reliable options as alternatives to minimum know your customer requirements for individuals.
|Rec 5.4: Rationalise safe harbour and simplified verification procedures.
|Rec 5.5: Expand simplified CDD to low risk entities.
|Rec 5.6: Permit self-attestation to identify customers in certain circumstances.
||Chapters 4 and 30.
|Rec 5.7: Permit entities to accept certified disclosure certificates.
||Chapters 4 and 30
|Rec 5.12: Expand ability of entities to use third party customer ID under certain conditions.
||Chapters 4, 8 and 9
|Rec 7.3: Incorporate AUSTRAC information on high ML/TF risk, clarify the role of a Compliance Officer, guarantee the independence of an AML/CTF program reviewer and require reporting entities to manage ML/TF risk posed by new technologies.
||Chapters 6, 8, 9, 15.
|Rec 7.5: Replace designated business groups.
||Chapters 2, 7, 9, 50.
|Rec 19.2: Amend definitions in the Rules.
||Chapters 1, 21 and 36.