On Sep. 11, AST PRL introduced the AML/CFT amendment bill 2024.
AST PRL introduced Anti-money laundering and counter-terrorism financing amendment bill 2024, which is a bill for an act to amend the AML CFT Act 2006.
AST PRL also published an explanatory memorandum with respect to the bill.
Follows AST AG May 2024 issued material on proposals re AML/CFT reforms, #210642.
Overview of Bill
Reforms in bill would ensure Australia’s AML/CFT regime continues to effectively deter, detect, disrupt illicit financing, protect Australian businesses from criminal exploitation.
They would improve the ability of Australia's national security and law enforcement agencies and AST AUSTRAC, as the AML/CFT regulator and Financial Intelligence Unit.
Namely, to target illicit financing; impact ability of transnational, serious and organized crime groups to invest illicit funds into further criminal activities in country, region.
The reforms would also ensure that Australia’s AML/CFT regime meets international standards set by FATF, the global financial crime body; the reforms in the bill would ensure that many of the key legislative gaps in Australia’s regime are addressed.
This will minimize the risk of Australia being grey listed by the FATF, which would result in significant economic and reputational costs; Australia will undergo its next mutual evaluation by the FATF in 2026-27; three key objectives of the bill are set out below.
Three Key Objectives
Three key objectives of bill include extending the AML/CFT regime to certain higher-risk services provided by real estate professionals, professional service providers.
Including lawyers, accountants and trust and company service providers, as well as dealers in precious stones and metals - which are also known as tranche two entities.
Second key objective is improving effectiveness of AML/CFT regime by making it simpler, clearer for businesses to comply with their obligations; the third is modernize the regime to reflect business structures, technologies, illicit financial methodologies.
The explanatory memorandum outlines the key measures in each schedule of the bill.
Schedule 1 relates to AML/CFT programs and business groups; schedule 2 relates to customer due diligence; schedule 3 relates to regulating additional high-risk services.
Schedule 4 relates to legal professional privilege; schedule 5 relates to tipping off offense and disclosure of AST AUSTRAC information to foreign countries/agencies.
Schedule 6 is on services re virtual assets; schedule 7 - definition of bearer negotiable instrument; schedule 8, re transfers of value and international value transfer services.
Schedule 9 is re AST AUSTRAC powers, and definitions; schedule 10 is on exemptions.
Schedule 11 is on repeal of Financial transaction reports act 1988; schedule 12 relates to transitional rules; schedule 12 would provide a power for the Minister to make rules.
Namely, rules re any amendments introduced by bill; this modification power limited to 4 years to address any unforeseen issues that may arise after reforms commence, to accommodate extensive time needed for industry to effectively implement measures.
Next Steps
Bill will follow required legislative process; second reading was moved Sep. 11, 2024.
AST AUSTRAC Comments
On the same day, AST AUSTRAC commented regarding bill's introduction to AST PRL.
Bill represents significant step in protecting community from financially enabled crime.
The bill also aims to strengthen existing framework to better address evolving threats posed by money laundering, terrorism financing and other serious, organized crime.
Sep. 19, 2024 Bill Referral
On Sep. 19, 2024, AST PRL said the bill above has been referred to the Legal and Constitutional Affairs Legislation Committee, for inquiry and report by Nov. 13, 2024.
The closing date for submissions to the inquiry is Oct. 14, 2024.
Nov. 2024 Committee Report
On Nov. 13, 2024, AST PRLLegal and Constitutional Affairs Legislation Committee tabled its report on the above bill after receiving 44 submissions and holding hearings.
Law enforcement agencies strongly endorsed the reforms, noting they would provide operational benefits and enhance ability to detect and investigate financial crimes.
Industry stakeholders generally supported the intent while raising concerns about implementation costs and timeframes; estimated regulatory burden of AUD 13.9bn.
Committee recommended to move start of tipping off offense to Mar. 31, 2025.
Note that AML/CFT regime does not capture barristers acting on solicitor instructions.
Ensure entities providing custodial/depository services without transactions are not unintentionally captured; ensure uniform requirement exemptions for item 54 entities.
Move criteria for ordering/beneficiary institutions to AML/CFT rules for flexibility and consultation; amend civil penalty provisions to clarify connection to due diligence.
Allow provision of services once specified non-compliance has been remedied.
Nov. 2024 AST AUSTRAC Bill Passage
On Nov. 29, 2024, AST AUSTRAC said AST PRL passed above-mentioned AML/CFT bill.
Bill expands regime to regulate additional high-risk services providers, strengthens existing frameworks in AML CFT act 2006 to address evolving financial crime threats.
AST AUSTRAC set up forums, working groups to support implementation through 2025.
Plans to engage with existing reporting entities and tranche 2 entities on reforms.
Industry participants can help design guidance and provide input on system changes.
AST AUSTRAC to release detailed reform information in Dec. 2024; public consultation planned on new AML/CFT rules; will provide targeted guidance and education products.
The act commences on various dates per s 2, with the first of these dates being Dec. 10, 2024; the other dates are Jan. 7 and Mar. 31, 2025; Mar. 31 and Jul. 1, 2026.
Regulators
AST AUSTRAC; AST GVT; AST PRL
Entity Types
Auditor; B/D; Corp; Fiduciary
Reference
RF C2024A00110, 12/13/2024; PR 11/29/2024; Rp 11/13/2024; Info 9/19/2024; Bill, Info, PR 9/11/2024; Citation: Financial transaction reports act 1988; AML CFT Act 2006; Anti-money laundering and counter-terrorism financing amendment act 2024;
