A bill amending anti-money laundering and counter-terrorism financing legislation that was introduced into the Parliament in October last year, was passed in the House of Representatives last week and moved to the Senate.
The bill implements some of the recommendations of a 2016 review of the law, the Statutory Review of the Anti-Money Laundering and Counter-Terrorism Financing Act. The government has been slow to move on recommendations to strengthen Australia’s AML/CTF law.
It is yet to do anything about the review’s recommendation that the AML/CTF regime be extended to cover professional services provided by lawyers, accountants and real estate agents.
The bill that was passed last week, Anti-Money Laundering and Counter-Terrorism Financing and Other Legislation Amendment Bill 2019, gives financial institutions and other anti-money laundering reporting entities access to third party providers of customer due diligence services.
Under current arrangements, if a person has bank accounts with multiple lenders it is expected that each financial institution will have undertaken customer due diligence procedures on that person. This would no longer be necessary.
The reform will give reporting entities a “safe harbour” from liability for third party customer due diligence breaches.
In other changes, the bill prohibits reporting entities from providing a designated service if customer identification procedures cannot be performed.
It strengthens protections around correspondent banking by prohibiting financial institutions from entering into a correspondent banking relationship with another financial institutions that permits its accounts to be used by a shell bank.
And it requires banks to conduct due diligence before entering a correspondent banking relationship.
The bill expands cross-border reporting requirements. Under current arrangements, travellers into and out of Australia must declare all cross-border movements of physical currency of A$10,000 or more.
The bill expands this requirement so that in addition to physical currency, bearer negotiable instruments, such as travellers cheques, must also be declared at the border.
It expands exceptions to the prohibition on tipping-off to permit reporting entities to share suspicious matter reports and related information with external auditors.
The bill also expands the rule-making powers of the Austrac chief executive.