New rules covering the cross-border movement of money were introduced into the Australian anti-money laundering and counter-terrorism financing regulatory regime this month, to make the rules more consistent.
The new reporting requirements consolidate reporting requirements for physical currency and bearer negotiable instruments.
The changes also align Australia’s cross-border reporting framework with those of foreign counterparts, including the United States and Canada.
Under the old rules a police or customers officer could require a person to declare a bearer negotiable instrument of any value. There was no requirement to declare a BNI unless required to do so by a police or customs officer.
The law now refers to “monetary instruments”, which includes physical currency (Australian or foreign), bearer negotiable instruments or anything prescribed in the AML/CTF rules. Those rules currently include travellers’ cheques, cheques and money orders.
If the combined value of all monetary instruments is A$10,000 or more, it must be reported.
It is an offence not to report and it is an offence to structure movements of monetary instruments into or out of Australia to avoid reporting requirements.
The new rules are included in the Anti-Money Laundering and Counter-Terrorism Financing and other Legislation Amendment Act 2020, which was passed in November 2020. Most of the provisions took effect in June last year but implementation of the cross-border rules was delayed until this month.
The provisions that took effect last year include reliance on customer identification carried out by a third party, correspondent banking and tipping-off.
The reforms gave financial institutions and other anti-money laundering reporting entities access to third party providers of customer due diligence services.
Under the old arrangements, if a person had bank accounts with multiple financial institutions each financial institution had to undertake customer due diligence on that person.
Since June last year, reporting entities have been allowed to enter into third party customer due diligence arrangements with another reporting entity regulated by Austrac or a foreign equivalent of a reporting entity that is subject to equivalent AML/CTF obligations as those in Australia.
In other changes, protections around correspondent banking have been strengthened. Financial institutions are prohibited 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 and to conduct ongoing due diligence that covers ownership, control and management structures of the correspondent bank, the nature of its business and the adequacy of its AML/CTF controls.
And the amendment expanded exceptions to the prohibition on tipping-off to permit reporting entities to share suspicious matter reports and related information with external auditors.