Policy (Additional Customer Due Diligence Requirements) Principles 2014

Policy (Additional Customer Due Diligence Requirements) Principles 2014

I, the Hon Michael Fayat Keenan MP, Minister for Justice, give these Principles under section 213 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (the Act).

Dated 15th May 2014

[Signed]
Michael Fayat Keenan

Minister for Justice

1.  Name of Principles

These Principles are the Policy (Additional Customer Due Diligence Requirements) Principles 2014

2.  Commencement

The Principles commence on 1 June 2014

3.  Enforcement action

(1)  During the period commencing 1 June 2014, and ending on 31 December 2015, the AUSTRAC CEO may apply for a civil penalty order or an injunction, issue a remedial direction, or require an external compliance audit, in respect of a reporting entity for a contravention of a relevant provision (as described in the next subparagraph) only if the AUSTRAC CEO is satisfied that a reporting entity or, if the reporting entity is a member of a designated business group (“DBG”), its DBG has failed to take reasonable steps to comply with the relevant provision.

(2)  Each customer due diligence requirement contained in the Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (No. 1) (the “Rules”) which commences to have effect on 1 June 2014 is a relevant provision.

Note: Prior to 1 June 2014 the relevant provisions will appear as a Note in the publicly-available compilation of the Rules available on www.comlaw.gov.au.

4.  Matters that must be considered

In determining whether a reporting entity has failed to take reasonable steps to comply with a relevant provision the AUSTRAC CEO must have regard to all relevant matters, including whether the reporting entity or, as appropriate, its DBG:

(a)  complies with the relevant provisions as soon as practicable, in respect of any person who becomes a customer between 1 June 2014 and 1 January 2016 who is assessed by the reporting entity to be of high money laundering or terrorism financing (ML/TF) risk;

Note: the obligation to comply with the relevant provisions in respect of a high ML/TF risk customer continues even if the person ceases to be a customer prior to 1 January 2016.

(b)  establishes a transition plan before 1 November 2014 which includes actions and timeframes to:

i.  ensure compliance with the obligation in paragraph (a); and

ii.  achieve full compliance with the relevant provisions prior to 1 January 2016;

(c)  obtains approval for the transition plan from the Board or similar governing body (the “Board”), or where no Board exists, the Chief Executive Officer or equivalent (the “CEO”) of the reporting entity. In the case of a DBG, this approval must be obtained from the Board or CEO of each entity in the DBG, or from a person or Board with written authority from each entity in the DBG to approve the transition plan, to receive and consider the monitoring reports referred to in subparagraph (e) below and to report to each entity in the DBG on the implementation of the transition plan and on any matters referred to in the monitoring reports;

(d)  sufficiently resources the implementation of the transition plan to enable the 1 January 2016 timeframe to be met;

(e)  regularly monitors and reports to the party which approved the transition plan under paragraph (c) above (that is, either the Board, or the CEO of the reporting entity or of each entity in the DBG or the person or Board with written authority from each entity in the DBG) on the implementation of the transition plan and, as necessary, takes appropriate action to ensure timeframes do not unreasonably deviate from those set out in the approved plan;

(f)  on request, provides AUSTRAC with a copy of the transition plan, information on progress against that plan and a copy of the written approval described in (c) and, in addition, in the case of a DBG, a copy of the written authority from each entity in the DBG (if applicable);

(g)  complies with the relevant provisions, in respect of the whole or part of the provision of designated services, as soon as can be reasonably accommodated through existing operations.

Note: A reference to ‘each entity in the DBG’ is a reference only to each entity in the DBG that is subject to the relevant provisions.