Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Anti-Money Laundering and Counter-Terrorism Financing Bill 2006

 

 

 

 

 

 

Anti-Money Laundering and Counter-Terrorism Financing Act 2006

 

No. 169, 2006

 

 

 

 

 

An Act to combat money laundering and the financing of terrorism, and for other purposes

   

   

   



Contents

Part 1—Introduction                                                                                                               2

1............ Short title............................................................................................ 2

2............ Commencement.................................................................................. 2

3............ Objects................................................................................................ 4

4............ Simplified outline................................................................................ 6

5............ Definitions.......................................................................................... 7

6............ Designated services........................................................................... 34

7............ Services provided jointly to 2 or more customers............................ 51

8............ Person-to-person electronic funds transfer instructions.................. 52

9............ Same-person electronic funds transfer instructions.......................... 54

10.......... Designated remittance arrangements etc........................................... 56

11.......... Control test....................................................................................... 57

12.......... Owner-managed branches of ADIs................................................... 57

13.......... Eligible gaming machine venues........................................................ 58

14.......... Residency......................................................................................... 58

15.......... Shell banks........................................................................................ 60

16.......... Electronic communications............................................................... 61

17.......... Bearer negotiable instruments........................................................... 61

18.......... Translation of foreign currency to Australian currency................... 61

19.......... Translation of e-currency to Australian currency............................ 62

20.......... Clubs and associations...................................................................... 62

21.......... Permanent establishment.................................................................. 62

22.......... Officials of designated agencies etc................................................... 63

23.......... Continuity of partnerships............................................................... 64

24.......... Crown to be bound........................................................................... 64

25.......... Extension to external Territories....................................................... 64

26.......... Extra-territorial application.............................................................. 65

Part 2—Identification procedures etc.                                                                       66

Division 1—Introduction                                                                                           66

27.......... Simplified outline.............................................................................. 66

Division 2—Identification procedures for certain pre-commencement customers          67

28.......... Identification procedures for certain pre-commencement customers 67

29.......... Verification of identity of pre-commencement customer etc........... 67

Division 3—Identification procedures for certain low-risk services 69

30.......... Identification procedures for certain low-risk services..................... 69

31.......... Verification of identity of low-risk service customer etc................. 69

Division 4—Identification procedures etc.                                                      71

32.......... Carrying out the applicable customer identification procedure before the commencement of the provision of a designated service............................................................................. 71

33.......... Special circumstances that justify carrying out the applicable customer identification procedure after the commencement of the provision of a designated service.................. 71

34.......... Carrying out the applicable customer identification procedure after the commencement of the provision of a designated service etc......................................................................................... 72

Division 5—Verification of identity etc.                                                             74

35.......... Verification of identity of customer etc............................................ 74

Division 6—Ongoing customer due diligence                                                75

36.......... Ongoing customer due diligence........................................................ 75

Division 7—General provisions                                                                             76

37.......... Applicable customer identification procedures may be carried out by an agent of a reporting entity    76

38.......... Applicable customer identification procedures deemed to be carried out by a reporting entity             76

39.......... General exemptions.......................................................................... 77

Part 3—Reporting obligations                                                                                        78

Division 1—Introduction                                                                                           78

40.......... Simplified outline.............................................................................. 78

Division 2—Suspicious matters                                                                             79

41.......... Reports of suspicious matters.......................................................... 79

42.......... Exemptions....................................................................................... 81

Division 3—Threshold transactions                                                                    83

43.......... Reports of threshold transactions.................................................... 83

44.......... Exemptions....................................................................................... 83

Division 4—International funds transfer instructions                                85

45.......... Reports of international funds transfer instructions........................ 85

46.......... International funds transfer instruction............................................ 86

Division 5—AML/CTF compliance reports                                                    88

47.......... AML/CTF compliance reports........................................................ 88

48.......... Self-incrimination.............................................................................. 89

Division 6—General provisions                                                                             90

49.......... Further information to be given to the AUSTRAC CEO etc........... 90

50.......... Request to obtain information about the identity of holders of foreign credit cards and foreign debit cards          91

51.......... Division 400 and Chapter 5 of the Criminal Code ........................... 92

Part 4—Reports about cross-border movements of physical currency and bearer negotiable instruments                                                                                                                                       93

Division 1—Introduction                                                                                           93

52.......... Simplified outline.............................................................................. 93

Division 2—Reports about physical currency                                                94

53.......... Reports about movements of physical currency into or out of Australia               94

54.......... Timing of reports about physical currency movements................... 95

55.......... Reports about receipts of physical currency from outside Australia 97

56.......... Obligations of customs officers and police officers.......................... 98

57.......... Movements of physical currency out of Australia.......................... 98

58.......... Movements of physical currency into Australia.............................. 99

Division 3—Reports about bearer negotiable instruments                  100

59.......... Reports about movements of bearer negotiable instruments into or out of Australia             100

60.......... Obligations of customs officers and police officers........................ 101

Division 4—Information about reporting obligations                               102

61.......... Power to affix notices about reporting obligations......................... 102

62.......... Notice about reporting obligations to be given to travellers to Australia                103

Part 5—Electronic funds transfer instructions                                                    104

Division 1—Introduction                                                                                         104

63.......... Simplified outline............................................................................ 104

Division 2—2 or more institutions involved in the transfer                 105

64.......... Electronic funds transfer instructions—2 or more institutions involved in the transfer         105

65.......... Request to include customer information in certain international electronic funds transfer instructions                108

Division 3—Only one institution involved in the transfer                     111

66.......... Electronic funds transfer instructions—only one institution involved in the transfer            111

Division 4—General provisions                                                                           113

67.......... Exemptions..................................................................................... 113

68.......... Defence of relying on information supplied by another person..... 114

69.......... Division 400 and Chapter 5 of the Criminal Code ......................... 114

70.......... Required transfer information......................................................... 114

71.......... Complete payer information.......................................................... 116

72.......... Tracing information........................................................................ 116

Part 6—Register of Providers of Designated Remittance Services       118

73.......... Simplified outline............................................................................ 118

74.......... Unregistered persons must not provide registrable designated remittance services                118

75.......... Register of Providers of Designated Remittance Services.............. 121

76.......... Registration..................................................................................... 122

77.......... Updating of entries on the Register of Providers of Designated Remittance Services             122

78.......... Removal of entries from the Register of Providers of Designated Remittance Services          123

79.......... Access to the Register of Providers of Designated Remittance Services 123

Part 7—Anti-money laundering and counter-terrorism financing programs               124

Division 1—Introduction                                                                                         124

80.......... Simplified outline............................................................................ 124

Division 2—Reporting entity’s obligations                                                    125

81.......... Reporting entity must have an anti-money laundering and counter-terrorism financing program           125

82.......... Compliance with Part A of an anti-money laundering and counter-terrorism financing program           125

Division 3—Anti-money laundering and counter-terrorism financing programs               127

83.......... Anti-money laundering and counter-terrorism financing programs 127

84.......... Standard anti-money laundering and counter-terrorism financing program             127

85.......... Joint anti-money laundering and counter-terrorism financing program 129

86.......... Special anti-money laundering and counter-terrorism financing program                131

87.......... Revocation of adoption of anti-money laundering and counter-terrorism financing program 132

88.......... Different applicable customer identification procedures................ 132

89.......... Applicable customer identification procedures—agent of customer 133

90.......... Applicable customer identification procedures—customers other than individuals               134

91.......... Applicable customer identification procedures—disclosure certificates 136

Division 4—Other provisions                                                                               139

92.......... Request to obtain information from a customer............................. 139

93.......... Exemptions..................................................................................... 140

Part 8—Correspondent banking                                                                                  141

94.......... Simplified outline............................................................................ 141

95.......... Prohibition of entry into correspondent banking relationships with shell banks etc.             141

96.......... Termination of correspondent banking relationship with shell bank etc.                142

97.......... Due diligence assessments before entering into correspondent banking relationships etc.      143

98.......... Regular due diligence assessments of correspondent banking relationships etc.     144

99.......... Other rules about correspondent banking relationships................. 146

100........ Geographical links.......................................................................... 146

Part 9—Countermeasures                                                                                               147

101........ Simplified outline............................................................................ 147

102........ Countermeasures............................................................................ 147

103........ Sunsetting of regulations after 2 years............................................ 148

Part 10—Record-keeping requirements                                                                 149

Division 1—Introduction                                                                                         149

104........ Simplified outline............................................................................ 149

105........ Privacy Act not overridden by this Part........................................ 149

Division 2—Records of transactions etc.                                                        150

106........ Records of designated services....................................................... 150

107........ Transaction records to be retained.................................................. 151

108........ Customer-provided transaction documents to be retained............. 151

109........ Records relating to transferred ADI accounts................................ 152

110........ Retention of records relating to closed ADI accounts.................... 153

Division 3—Records of identification procedures                                     155

111........ Copying documents obtained in the course of carrying out an applicable custom identification procedure           155

112........ Making of records of identification procedures.............................. 155

113........ Retention of records of identification procedures.......................... 156

114........ Records of identification procedures deemed to have been carried out by a reporting entity 157

Division 4—Records about electronic funds transfer instructions   160

115........ Retention of records about electronic funds transfer instructions.. 160

Division 5—Records about anti-money laundering and counter-terrorism financing programs               162

116........ Records about anti-money laundering and counter-terrorism financing programs   162

Division 6—Records about due diligence assessments of correspondent banking relationships           164

117........ Retention of records of due diligence assessments of correspondent banking relationships   164

Division 7—General provisions                                                                           165

118........ Exemptions..................................................................................... 165

119........ This Part does not limit any other obligations............................... 165

Part 11—Secrecy and access                                                                                        166

Division 1—Introduction                                                                                         166

120........ Simplified outline............................................................................ 166

Division 2—Secrecy                                                                                                   167

121........ Secrecy—AUSTRAC information and AUSTRAC documents.... 167

122........ Secrecy—information obtained under section 49........................... 168

Division 3—Disclosure of information                                                              171

123........ Offence of tipping off..................................................................... 171

124........ Report and information not admissible.......................................... 174

Division 4—Access to AUSTRAC information by agencies                 176

Subdivision A—Access by the ATO to AUSTRAC information                      176

125........ Access by the ATO to AUSTRAC information............................ 176

Subdivision B—Access by designated agencies to AUSTRAC information 177

126........ Access by designated agencies to AUSTRAC information............ 177

127........ Dealings with AUSTRAC information once accessed................... 178

128........ When AUSTRAC information can be passed on by an official of a designated agency          178

Subdivision C—Access by non-designated Commonwealth agencies to AUSTRAC information     184

129........ Access by non-designated Commonwealth agencies to AUSTRAC information   184

130........ Dealings with AUSTRAC information once accessed................... 184

131........ When AUSTRAC information can be passed on by an official of a non-designated Commonwealth agency        185

Subdivision D—Communication of AUSTRAC information to foreign countries etc.        186

132........ Communication of AUSTRAC information to a foreign country etc. 186

133........ When the Director-General of Security may communicate AUSTRAC information to a foreign intelligence agency........................................................................................................ 189

Division 5—Use of AUSTRAC information in court or tribunal proceedings     190

134........ Use of AUSTRAC information in court or tribunal proceedings... 190

Part 12—Offences                                                                                                               191

135........ Simplified outline............................................................................ 191

136........ False or misleading information...................................................... 191

137........ Producing false or misleading documents....................................... 192

138........ False documents............................................................................. 193

139........ Providing a designated service using a false customer name or customer anonymity              195

140........ Receiving a designated service using a false customer name or customer anonymity              195

141........ Customer commonly known by 2 or more different names—disclosure to reporting entity  196

142........ Conducting transactions so as to avoid reporting requirements relating to threshold transactions         197

143........ Conducting transfers so as to avoid reporting requirements relating to cross-border movements of physical currency........................................................................................................ 198

Part 13—Audit                                                                                                                       200

Division 1—Introduction                                                                                         200

144........ Simplified outline............................................................................ 200

Division 2—Appointment of authorised officers and issue of identity cards        201

145........ Appointment of authorised officers............................................... 201

146........ Identity cards.................................................................................. 201

Division 3—Powers of authorised officers                                                     203

Subdivision A—Monitoring powers                                                                      203

147........ Authorised officer may enter premises by consent or under a monitoring warrant                203

148........ Monitoring powers of authorised officers...................................... 203

149........ Tampering or interfering with things secured in the exercise of monitoring powers               205

Subdivision B—Powers of authorised officers to ask questions and seek production of documents               206

150........ Authorised officer may ask questions and seek production of documents             206

Division 4—Obligations and incidental powers of authorised officers 208

151........ Authorised officer must produce identity card on request............. 208

152........ Consent........................................................................................... 208

153........ Announcement before entry........................................................... 208

154........ Details of monitoring warrant to be given to occupier etc. before entry 209

155........ Use of electronic equipment in exercising monitoring powers....... 209

156........ Compensation for damage to electronic equipment........................ 211

Division 5—Occupier’s rights and responsibilities                                   212

157........ Occupier entitled to be present during execution of monitoring warrant 212

158........ Occupier to provide authorised officer with facilities and assistance 212

Division 6—Monitoring warrants                                                                        213

159........ Monitoring warrants....................................................................... 213

160........ Magistrates—personal capacity..................................................... 214

Division 7—External audits                                                                                   215

161........ External audits—risk management etc............................................ 215

162........ External audits—compliance.......................................................... 217

163........ External auditor may have regard to the results of previous audit. 219

164........ External auditors............................................................................. 219

Division 8—Money laundering and terrorism financing risk assessments          221

165........ Money laundering and terrorism financing risk assessments......... 221

Part 14—Information-gathering powers                                                                  223

166........ Simplified outline............................................................................ 223

167........ Authorised officer may obtain information and documents........... 223

168........ Copying documents—reasonable compensation............................ 224

169........ Self-incrimination............................................................................ 224

170........ Copies of documents...................................................................... 225

171........ Authorised officer may retain documents...................................... 225

172........ Division 400 and Chapter 5 of the Criminal Code ......................... 225

Part 15—Enforcement                                                                                                       226

Division 1—Introduction                                                                                         226

173........ Simplified outline............................................................................ 226

Division 2—Civil penalties                                                                                     227

174........ Ancillary contravention of civil penalty provision........................ 227

175........ Civil penalty orders........................................................................ 227

176........ Who may apply for a civil penalty order....................................... 229

177........ 2 or more proceedings may be heard together................................ 229

178........ Time limit for application for an order........................................... 229

179........ Civil evidence and procedure rules for civil penalty orders............ 229

180........ Civil proceedings after criminal proceedings.................................. 229

181........ Criminal proceedings during civil proceedings................................ 229

182........ Criminal proceedings after civil proceedings.................................. 230

183........ Evidence given in proceedings for penalty not admissible in criminal proceedings 230

Division 3—Infringement notices for unreported cross-border movements of physical currency and bearer negotiable instruments                                                   231

184........ When an infringement notice can be given...................................... 231

185........ Matters to be included in an infringement notice........................... 231

186........ Amount of penalty......................................................................... 232

187........ Withdrawal of an infringement notice............................................. 232

188........ What happens if the penalty is paid.............................................. 232

189........ Effect of this Division on criminal and civil proceedings............... 233

Division 4—Monitoring of compliance                                                             234

190........ Monitoring of compliance.............................................................. 234

Division 5—Remedial directions                                                                         235

191........ Remedial directions......................................................................... 235

Division 6—Injunctions                                                                                            236

192........ Injunctions...................................................................................... 236

193........ Interim injunctions.......................................................................... 236

194........ Discharge etc. of injunctions........................................................... 237

195........ Certain limits on granting injunctions not to apply........................ 237

196........ Other powers of the Federal Court unaffected............................... 238

Division 7—Enforceable undertakings                                                            239

197........ Acceptance of undertakings............................................................ 239

198........ Enforcement of undertakings.......................................................... 239

Division 8—Powers of questioning, search and arrest in relation to cross-border movements of physical currency and bearer negotiable instruments                      241

199........ Questioning and search powers in relation to physical currency... 241

200........ Questioning and search powers in relation to bearer negotiable instruments          244

201........ Arrest without warrant................................................................... 249

Division 9—Notices to reporting entities                                                       251

202........ Notices to reporting entities........................................................... 251

203........ Contents of notices to reporting entities........................................ 252

204........ Breaching a notice requirement....................................................... 252

205........ Self-incrimination............................................................................ 253

206........ Division 400 and Chapter 5 of the Criminal Code ......................... 253

207........ Disclosing existence or nature of notice.......................................... 253

Part 16—Administration                                                                                                   255

Division 1—Introduction                                                                                         255

208........ Simplified outline............................................................................ 255

Division 2—Establishment and function of AUSTRAC                           256

209........ Establishment of AUSTRAC......................................................... 256

210........ Function of AUSTRAC................................................................. 256

Division 3—Chief Executive Officer of AUSTRAC                                  257

Subdivision A—Office and functions of the AUSTRAC CEO                          257

211........ AUSTRAC CEO............................................................................ 257

212........ Functions of the AUSTRAC CEO................................................. 257

213........ Policy principles............................................................................. 259

Subdivision B—Appointment of the AUSTRAC CEO etc.                                259

214........ Appointment of the AUSTRAC CEO etc..................................... 259

215........ Remuneration and allowances of the AUSTRAC CEO................. 260

216........ Leave of absence of the AUSTRAC CEO...................................... 260

217........ Resignation of the AUSTRAC CEO.............................................. 260

218........ Notification of possible conflict of interest by the AUSTRAC CEO 260

219........ Termination of the AUSTRAC CEO’s appointment.................... 261

220........ Other terms and conditions............................................................ 262

221........ Acting appointments...................................................................... 262

222........ Delegation by the AUSTRAC CEO............................................... 263

223........ Secretary may require the AUSTRAC CEO to give information... 263

Division 4—Staff of AUSTRAC etc.                                                                   264

224........ Staff of AUSTRAC........................................................................ 264

225........ Consultants and persons seconded to AUSTRAC........................ 264

Division 5—Reports and information                                                                265

226........ Annual report................................................................................. 265

227........ Minister may require the AUSTRAC CEO to prepare reports or give information               265

Division 6—Directions by Minister                                                                   267

228........ Directions by Minister................................................................... 267

Division 7—AML/CTF Rules                                                                               268

229........ AML/CTF Rules............................................................................ 268

Part 17—Vicarious liability                                                                                             269

230........ Simplified outline............................................................................ 269

231........ Criminal liability of corporations................................................... 269

232........ Civil liability of corporations......................................................... 269

233........ Liability of persons other than corporations.................................. 270

Part 18—Miscellaneous                                                                                                   271

234........ Simplified outline............................................................................ 271

235........ Protection from liability................................................................. 272

236........ Defence of taking reasonable precautions, and exercising due diligence, to avoid a contravention          273

237........ Treatment of partnerships.............................................................. 273

238........ Treatment of unincorporated associations..................................... 274

239........ Treatment of trusts with multiple trustees.................................... 274

240........ Concurrent operation of State and Territory laws......................... 275

241........ Act not to limit other powers......................................................... 275

242........ Law relating to legal professional privilege not affected................. 275

243........ Validity of transactions.................................................................. 276

244........ Reports to the AUSTRAC CEO etc.............................................. 276

245........ Arrangements with Governors of States etc................................... 276

246........ This Act does not limit other information-gathering powers......... 277

247........ General exemptions........................................................................ 278

248........ Exemptions and modifications by the AUSTRAC CEO............... 278

249........ Specification by class..................................................................... 279

250........ Schedule 1 (alternative constitutional basis)................................... 279

251........ Review of operation of Act............................................................ 279

252........ Regulations..................................................................................... 280

Schedule 1—Alternative constitutional basis                                 281

1............ Alternative constitutional basis...................................................... 281

 



 

 

Anti-Money Laundering and Counter-Terrorism Financing Act 2006

No. 169, 2006

 

 

 

An Act to combat money laundering and the financing of terrorism, and for other purposes

[ Assented to 12 December 2006 ]

The Parliament of Australia enacts:



Schedule 1 Alternative constitutional basis

Note:       See section 250.

   

   

1   Alternative constitutional basis

             (1)  Without limiting its effect apart from this clause, this Act also has effect as provided by this clause.

Limited types of designated services

             (2)  This Act also has the effect it would have if subclause (3) had not been enacted and each reference in this Act to a designated service were, by express provision, confined to a designated service where:

                     (a)  the designated service consists of:

                              (i)  issuing a bill of exchange or a promissory note; or

                             (ii)  in the capacity of agent of a person, acquiring or disposing of a bill of exchange, or a promissory note, on behalf of the person; or

                     (b)  both:

                              (i)  the provision of the designated service involves a transaction; and

                             (ii)  the transaction involves the transfer of physical currency from one person to another; or

                     (c)  the customer of the designated service is a constitutional corporation; or

                     (d)  the designated service is provided by a constitutional corporation; or

                     (e)  the designated service is provided in the course of, or in relation to, any of the following:

                              (i)  trade or commerce between Australia and places outside Australia;

                             (ii)  trade or commerce among the States;

                            (iii)  trade or commerce within a Territory, between a State or Territory or between 2 Territories;

                            (iv)  the supply of goods or services to the Commonwealth or an authority or instrumentality of the Commonwealth; or

                      (f)  the designated service is provided in the course of, or in relation to, banking to which paragraph 51(xiii) of the Constitution applies; or

                     (g)  the designated service is provided in the course of, or in relation to, insurance to which paragraph 51(xiv) of the Constitution applies; or

                     (h)  the designated service is provided using a postal, telegraphic, telephonic or other like service (within the meaning of paragraph 51(v) of the Constitution); or

                      (i)  the designated service is provided:

                              (i)  in a Territory; or

                             (ii)  in a Commonwealth place; or

                            (iii)  in a foreign country; or

                      (j)  the designated service is provided by a person:

                              (i)  at or through a permanent establishment of the person in a Territory; or

                             (ii)  at or through a permanent establishment of the person in a Commonwealth place; or

                            (iii)  at or through a permanent establishment of the person in a foreign country.

Note:          See also subclause (6) (extended meaning of permanent establishment ).

Administration and enforcement of taxation laws and other laws

             (3)  This Act also has the effect it would have if:

                     (a)  subclause (2) had not been enacted; and

                     (b)  this Act did not apply except to the extent to which it:

                              (i)  facilitates the administration or enforcement of taxation laws; or

                             (ii)  facilitates the administration or enforcement of laws of the Commonwealth or of the Territories (other than taxation laws).

Cross-border movements of bearer negotiable instruments

             (4)  Division 3 of Part 4 and section 200 also have the effect they would have if each reference in that Division and that section to a bearer negotiable instrument were, by express provision, confined to a bearer negotiable instrument that is:

                     (a)  a bill of exchange; or

                     (b)  a promissory note.

Correspondent banking

             (5)  Part 8 and section 117 also have the effect they would have if:

                     (a)  each reference in section 95, 96 or 99 to another person were, by express provision, confined to another person that is:

                              (i)  a constitutional corporation; or

                             (ii)  an individual who is physically present in a foreign country; and

                     (b)  each reference in section 96, 97 or 98 to another financial institution were, by express provision, confined to another financial institution that is:

                              (i)  a constitutional corporation; or

                             (ii)  an individual who is physically present in a foreign country.

Extended meaning of permanent establishment

             (6)  For the purposes of paragraph (2)(j) of this clause:

                     (a)  subsection 21(2) has effect as if each reference in that subsection to a country included a reference to:

                              (i)  a Territory; and

                             (ii)  a Commonwealth place; and

                     (b)  ignore subsection 21(3).



 

 [ Minister’s second reading speech made in—

House of Representatives on 1 November 2006

Senate on 29 November 2006 ]

(162/06)