Financial Crime World

Australia’s Anti-Money Laundering and Counter-Terrorism Financing Regulations

Introduction

The Australian government has implemented a range of regulations aimed at preventing money laundering and financing terrorism by imposing strict obligations on businesses operating in the financial sector, gambling industry, remittance services, digital currency exchanges, bullion dealers, and other professionals.

Key Components of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act)

  • Reporting Entities: Businesses operating in the designated sectors are required to collect and verify certain personal information about customers before providing designated services.
  • Identity Verification: Reporting entities must verify a customer’s identity through processes such as credit checks.
  • Personal Information Handling: The Australian Transaction Reports and Analysis Centre (AUSTRAC) works closely with the Office of the Australian Information Commissioner to ensure that reporting entities handle personal information in accordance with privacy laws.

Exemptions for Small Businesses

  • Small businesses required to comply with the AML/CTF Act may be exempt from certain obligations under the Privacy Act 1988.
  • However, these businesses must still comply with privacy laws when handling personal information collected for AML/CTF purposes.

Credit Reporting Bodies (CRBs)

  • CRBs are authorized to disclose personal information to reporting entities for identity verification purposes.
  • CRBs can prepare assessments of whether certain personal information matches identification information held on file, limited to name, residential address, and date of birth details.
  • Reporting entities must obtain the consent of individuals whose identities are being verified before requesting an assessment from a CRB.
  • They must also provide individuals with information about the proposed verification process and make alternative means of identity verification available.

Consequences of Non-Compliance

  • A breach of any of these requirements can constitute an interference with an individual’s privacy, making them eligible to complain to the Office of the Australian Information Commissioner.
  • More information on the AML/CTF Act is available from AUSTRAC’s website.