AUSTRAC v CBA is again major news. This time it is CBA’s Defence to the AUSTRAC Statement of Claim
In this session we will explore CBA’s Defence and how it might impact AML/CTF Programs.
We might even stray into the Amended Statement of Claim.
As ever, we won’t be commenting on the merits of the claim or any defence, only the allegations as they pertain to alleged breaches of the AML/CTF Act, especially aorund AML/CTF Programs.
Paddy Oliver, Managing Director, AML Experts (and a lawyer) will lead the discussions.
Tickets are free.
Bring your own lunch.
This article discusses some of the lessons from the authors’ years of experience conducting independent review of AML/CTF programs, and AUSTRAC’s publication ‘Insights from Compliance Assessments: Good Business Practices and Areas for Improvement’ of December 2016.
The AML/CTF laws require designated service providers to maintain an AML/CTF Program and undertake for regular independent review of Part A of that program (which necessarily also entails some examination of the operation of Part B (Customer due diligence)).
Headlines were made when AUSTRAC brought civil proceedings against Tabcorp for breaches of the AML Act. This was the first major civil proceedings litigation brought by AUSTRAC against any reporting entity in Australia. In the approximate two years that the action lasted there was much conjecture and debate over how the matter might play out. Ultimately, a settlement was reached for Tabcorp to admit to certain breaches of the AML Act and to accept a civil penalty of AUD $45M.
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:
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:
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.
|REVIEW RECOMMENDATION||AFFECTED CHAPTERS|
|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.||Chapter 4|
|Rec 5.4: Rationalise safe harbour and simplified verification procedures.||Chapter 4|
|Rec 5.5: Expand simplified CDD to low risk entities.||Chapter 4|
|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.|
Do you have an interest in how your profession or industry is going to be regulated under Australia’s Anti-Money Laundering & Counter-Terrorist Financing regime? It would appear that Australian DNFBPs (lawyers, accountants, real estate agents, trust & company services providers, and high-value dealers) will finally be subject to AML/CTF Act obligations (or a variation). Yes, Tranche 2 is on its way.
Immunity curtailed under changes to AML Act S169. When you are providing information to AUSTRAC you might think you have immunity from prosecution under S169. Think again. This self-incrimination privilege has recently been severely curtailed.
In the recent judgment of Justice Nye Perram in the interlocutory matter AUSTRAC v Tabcorp (TAB Limited), the judge made comments which should make boards, senior management, risk and compliance teams, and AML professionals sit up and take note. The comments of most significance related to anti-money laundering (AML) compliance programs, money laundering and terrorist financing (ML/TF) risk assessments, and AML program governance. The judge’s comments also have relevance to record creation and record keeping obligations.