Stay on the straight and narrow. A reminder that your reports are due.

It is that time of year again for completing your AUSTRAC compliance report. Yes, it is a rather easy document to complete. And yes, you might consider it an irritant. However, be warned as completing the S47 Report should be taken seriously. Questions should be answered truthfully and accurately, even if that means confessing to AUSTRAC that your organisation has not fully implemented an AML Act or AML Rule obligation.

Here are several reasons why:

  • It is a statutory report;
  • Making a false declaration on the report is an offence;
  • Your answers could be used in compliance or enforcement action against your organisation;
  • Data matching against previous year’s report may show inconsistency in your answers triggering a compliance review;
  • As the questions have been carefully designed internal inconsistencies in answers to several linked answers will show up during any AUSTRAC review of the report.

Be truthful. It is better to answer a question with “partially implemented” if that is actually the case rather than answer “implemented”. You may get credit from AUSTRAC for admitting to compliance failings but having a plan to remediate those failings. On the flip side, you will not get any credit, only into trouble, for sating that you have “implemented” an obligation when that is not actually the case. The AUSTRAC guide to completing a S47 report defines:

  • Partially implemented – this component of the program was under development, though there were major shortcomings, with a significant element of the requirements not implemented.
  • Implemented – this component was essentially fully implemented. (Note, best to take “essentially” to read fully.)

Remember, your answers must relate to your AML/CTF Program as of 31st December 2015. Not, January, February, or March 2016. I have seen plenty of instances of reports stating that, for example, an independent review was carried out in February or March of one year, say 2014, with no independent review having been carried out in 2013 with the 2013 report stating that an independent review had been carried out. That is an incorrect answer.

Some key questions which deserve detailed consideration before you answer:

Q2 – For each component of your AML/CTF Program, indicate your status on 31st December 2015:

  • Not commenced
  • Partially implemented
  • Implemented
  • Not applicable

Q3(b) Did you assess the ML/TF financing risks posed by these customer types?

Qs4-8 Relating to ML/TF risk assessments
Q11 Was in independent review of your AML/CTF Program conducted by an internal party or an external party?

Q12 For each of your customer types, indicate if you had procedures to, collect, verify, identify additional KYC information?

Q15 Did you have any high risk customers or groups of customers (including PEPs)?

Q18 Did you make and retain records of all customer identification information?

Q23 Have you amended your AML/CTF Program to see the customer due diligence requirements that came into effect on 1st June 2014?

Be truthful and accurate!

Paddy Oliver leads the team at AML Experts. Paddy has extensive experience as a lawyer and compliance management consultant. Importantly for you, he is an experienced Independent Reviewer and Auditor. That means AML Experts is your one-stop-shop for AML Act and AUSTRAC compliance. Paddy can be contacted here.

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