Legal Advice on New KYC / CDD Reliance Provisions
Scenario:
An online bullion dealer sought legal advice on how it could rely on offshore partners' KYC procedures.
Outcome:
Paddy Oliver, Principal of AML Experts law firm, provided legal advice the new AML Act & Rules provisions allowing reliance on KYC carried out by offshore parties.
Expert Witness - New Zealand Professional Negligence Civil Action
Scenario:
A New Zealand insurance company required an expert witness to provide expert evidence in a professional negligence action against its insured.
Outcome:
Through its lawyers, the insurer instructed Paddy Oliver to provide an expert witness report. The report focussed on what advice a competent AML consultant would provide a reporting entity.
SMR Audit & SMR Narratives
Scenario:
A reporting entity requested an audit of its SMR reports and reporting processes.
Outcome:
As a law firm with audit skills, AML Experts were able to review the SMR internal and external reporting processes, and provide an opinion on the quality of the SMR narratives.
Providing Legal Advice to a Buy Now, Pay Later business on Electronic Verification Rules
Scenario:
A Buy Now, Pay Later business sought legal advice on its proposed "safe harbour" electronic verification procedures. It was concerned that deviation from the norm would be a risk.
Outcome:
Paddy Oliver, Principal of AML Experts law firm, provided legal advice on the application of the AML Rules 4.2.12 - Electronic-based safe harbour procedure where ML/TF Risk is medium or lower and 4.10 - Verification from reliable and independent electronic data to the proposed KYC procedures. Assurance was provided that the proposed KYC procedures met all AML Rules requirements. The advice was delivered on time at a fixed price.
Assisting a USA online lending platform starting an Australian operation
Scenario:
A USA based online lending platform requested assistance setting up an Australian operation. The business have very limited knowledge of Australian AML and other regulatory regimes.
Outcome:
AML Experts advise the platform on how Australian AML law would impact the platform. We assisted with design of the ML/TF Risk Assessment, the AML-CTF Program, and the Transaction Monitoring Program rules for the automated Transaction Monitoring System. Detailed advice was also provided on Australian Know Your Customer / Business requirements.
An Australian ML/TF Risk Assessment & AML-CTF Program for New Zealand Online Share Trading platform setting up in Australia.
Scenario:
A New Zealand online share trading platform was setting up its Australian operation and sough AML consulting advice on how to re-design its New Zealand AML/CFT Programme into an Australian AML-CTF Program with appropriate changes in systems and processes.
Outcome:
AML Experts worked with the business to explain the overlaps and gaps between the Australian and New Zealand AML regimes. Consulting advice was provided to revise the New Zealand AML/CFT Programme and ML/TF Risk Assessment into Australian equivalents. Advice was also provided on KYC electronic verification standards in Australia.
AUSTRAC Enforceable Undertaking - External Audit and External Auditor Authorisation - Foreign Exchange / Remitter
Scenario:
An Australian remittance & foreign exchange business accepted an AUSTRAC Enforceable Undertaking requiring, amongst other matters, the appointment of an External Auditor to provide an external audit report into the remediation.
Outcome:
The business put forward, and AUSTRAC authorised, Paddy Oliver as the External Auditor. Paddy carried out the auditor duties completing the External Audit report on time and to the scope required by the Enforceable Undertaking.
ML/TF Risk Assessment & AML-CTF Program - Superannuation Fund
Scenario:
A medium sized Australian superannuation fund required an updated ML/TF Risk Assessment and a new AML-CTF Program based upon the risk assessment outcomes.
Outcome:
Working with the superannuation fund, AML Experts designed and facilitated the ML/TF Risk Assessment including all potential ML / TF / serious crime risks to the superannuation fund and key regulatory risks. AML Experts assisted with the design of updated controls. The AML-CTF Program was re-written on the result of the ML/TF Risk Assessment and the updated controls. The project was fixed price.
AUSTRAC Enforceable Undertaking - External Audit and External Auditor Authorisation - Foreign Exchange / Remitter
Scenario:
An Australian remittance & foreign exchange business accepted an AUSTRAC Enforceable Undertaking requiring, amongst other matters, the appointment of an External Auditor to provide an external audit report into the remediation.
Outcome:
The business put forward, and AUSTRAC authorised, Paddy Oliver as the External Auditor. Paddy carried out the auditor duties completing the External Audit report on time and to the scope required by the Enforceable Undertaking.
AML Act Legal Advice - Attempted Re-Design of Business Model to Avoid Items 31 & 32 (Remittance)
Scenario:
An entrepreneurial contract management business request legal advice on whether a new business line would be a designated service making the business caught by the AML Act.
Outcome:
Paddy Oliver Principal of AML Experts law firm, provided legal advice on the application of AML Act Items 31 & 32 (remittance) to the proposed business mode. He also worked with the business to design a business model that would ensure that the business was not caught by the AML Act.
AML Act Legal Advice - Re-verification of Pre-Commencement Customers - Digital Currency Exchange
Scenario:
A large Australian Digital Currency Exchanged required legal advice on whether or not the AML Rule 15.3 "customer KYC re-fresh" obligation applied to its pre-commencement customers.
Outcome:
Paddy Oliver, Principal of AML Experts law firm, provided written legal advice answering the questions posed by the DCE. The advice was delivered on time with a fixed price.
AML/CTF Independent Review
Scenario:
A listed credit provider was required to have its AML Program independently reviewed by an AUSTRAC approved auditor.
Outcome:
AML Experts was engaged and using the AML Experts AML Independent Review Methodology, all legal obligations and compliance requirements were captured. Improvements in the AML/CTF Program were recommended and accepted.
AUSTRAC Enforceable Undertaking Independent Review
Scenario:
A court enforceable undertaking to change business practices in a defined time frame led the money-remitter to AML Experts. Failure to make the changes would result in closure of the business and possible court action against the owners.
Outcome:
Paddy Oliver was assessed by AUSTRAC as a suitable independent subject matter expert and conducted an independent review of the business. His report outlined the changes required. He conducted a second review after implementation and AUSTRAC was satisfied the business was operating legally. The business now flourishes.
Money Laundering/Terrorist Financing Risk Assessment
Scenario:
The Australian branch of a global financial services company required an assessment of its risk to ML/TF. An internal assessment was unsophisticated and potentially in breach of the AML Act.
Outcome:
Using the AML Experts ML/TF risk assessment methodology, Paddy Oliver worked with the client to identify the ML/TF risks in the business. The business and regulatory risks were addressed and the client now has greater risk controls within its operations and is meeting its regulatory obligations.
Advice on AML Act and AML/CTF Program Writing
Scenario:
A stockbroking firm had a new product which made it easier for clients to open and run an account. This required an AML Program review before a major bank would approve the product.
Outcome:
AML Experts conducted three rounds of gap analysis in the client’s AML Program against the Act. Improvements were made after each round, with bank approval granted after the third.
Response to AUSTRAC S202 Notice
Scenario:
A money remitter received an S202 Notice which had serious consequences for its business if not dealt with correctly.
Outcome:
In the expert opinion of Paddy Oliver, the S202 had been issued in error and the less onerous S167 Notice was applicable. After delicate negotiations, AUSTRAC agreed and altered the Notice to a S167. Paddy then assisted the client with a detailed response to both the S202 (in pro forma) and S167 Notices.
This outcome was very favourable to the client especially invoking the self incrimination defence under S169.
Helping a FinTech meet its AML obligations and to reduce operational costs
Scenario:
FinTech startup providing superannuation and deposit type product. Caught by AML Act and further contractual obligations from a banking supplier. They needed assistance with ML/TF risk assessment, AML Program, and advice on electronic verification of customers
Outcome:
Worked with client to provide a proposal with several options around advice and assistance for a fixed price. The client chose the option for a ML/TF risk assessment workshop. We provided a template ML/TF risk framework. After the client had carried out an initial assessment we facilitated a 3 hour ML/TF risk assessment workshop with the client.
The workshop covered the client’s risk appetite as well as risk mitigation strategies. The discussion on risk appetite was particular informative for the client which provoked wider discussions on risk.
AML Program Re-Write Project
Scenario:
The reporting entity, a large Australian financial institution, had a compliant AML Program. However, the AML Program had become lengthy and rather disorganised over the years as it had never been re-written, only added to. The project was to revise and re-write the AML Program into a shorter and more readable document but not compromising its compliance with the AML Act and Rules.
Outcome:
The project was in two phases. Phase 1 was a full gap analysis of the AML Program all relevant AML Rules (Rules 4 - KYC, 8 - AML Programs, 15 - Ongoing Customer Due Diligence). Phase 2 was the AML/CTF Program re-write.
After identifying the gaps we commenced re-writing the Program. This involved taking operational processes out of the Program and placing them into an Operational Procedures Document to allow these procedures to be changed without Board approval.
Part A was re-written to allow non material changes to Operational Procedures to be carried out by the AMLCO with pre-approval of the Board. This will allow ever changing Operational Procedures to be changed without changing the AML Program with the requirement to have the new Program approved at every stage by the Board.
Three documents were produced: Part A; Part B; and Operational Procedures. Each was drafted by Paddy Oliver of AML Experts then reviewed by the client project steering committee.
Use was made of online collaboration tools to ensure best use of client time.
The project was completed to a fixed price and agreed timescale. As a value add to the client we also advised on the new elements of Rule 4.15 relating to identification of individuals.
Know Your Customer Processes Re-Engineering
Scenario:
A digital currency (crypto) exchange client had a pre AML Act commencement KYC process which included verification of identity from a photograph of a customer's driver licence or passport plus several other verification controls. After DCEs became regulated by the AML Act the DCE wanted to ensure that this process was retained and was compliant with AML KYC Rules.
Outcome:
Starting from the pre AML Act process we worked with the DCE to map this process against the AML Rules. After the mapping the process was considered to be nearly compliant with the new KYC rules however some adjustments to the process would be needed to ensure full compliance. Working with the client we assisted with the re-engineering of the KYC processes (for individuals and non-individuals) and the re-writing of the AML Program to ensure compliance.
The key to this project was that DCE wanted to ensure that verification was from an "authenticated" photographic identification document. That was achieved. As was re-rewriting the AML Program to include the documentation and electronic verification risk assessments.
All was achieved on time and on budget.