AML/CTF Amendment Act 2024 – Consultation on Draft Rules

More “modernisation & simplification” (cough).

Scalability of Outcomes – The consultation paper at page 8 states:

“The outcomes-based approach to the new General Rules, which avoids prescribing processes reporting entities must carry out, also supports the rules to be flexible and scalable to the diverse regulated population.”

Call me a realist, or perhaps just cynic, but I cannot see how the following draft rules can be be described as avoiding a prescribed process:

9 – Review of ML/TF Risk Assessment – mandatory review of a ML/TF Risk Assessment post Independent Review / Evaluation “adverse findings”;
12 – Reporting from AML/CTF compliance officer to governing body – manadatory internal reporting at a least a 12 month frequency;
13 – Undertaking personnel due diligence – mandatory completion of all vetting processes, including a prospective employee’s “integrity” before employement or engagement;
14 – Providing personnel training – “is readily understandable by the person”;
15 – Independent evaluations;
16 – Reviewing and updating AML-CTF Policies following independent evaluation – mandatory review of AML-CTF Policies post Independent Review / Evaluation “adverse findings”;
23 – AML/CTF Compliance Officer requirements;
25 – Establishing the identity of the customer— individuals (accounts and transfer of value) – collection and verification of “place of birth”;
27 Additional matters for initial customer due diligence – Legal or official documentation – For any customer other than an individual acting on their own behalf or a government body, the legal or official documentation which demonstrates how the customer is regulated. Note: Examples include the constitution of a body corporate, a partnership agreement or a trust deed;
28 Establishing the identity of any person on whose behalf the customer is receiving the designated service class of beneficiary;
39 Deemed compliance with ongoing customer due diligence-monitoring of tansactions and behaviours;
42 Matters for initial customer due diligence-nested services relationship;
43 Ongoing customer due diligence nested services relationship;
44 Requirements for agreement or arrangement on collection and verification of KYC information;
45 Requirements for reliance on collection and verification of KYC information

Don’t get me wrong, some of these requirements may be a postive thing. However, they are hardly the avoidance of prescription.

I wonder if those that penned the Consultation Paper had read the Exposure Draft Rules and the difficulty that they will pose to all reporting entities.