On 17 October 2019, the Government introduced the Anti Money Laundering and Counter Terrorism Financing and Other Legislation Amendment Bill 2019 to Parliament.
The Bill amends the Anti-Money Laundering and Counter‑Terrorism Financing Act 2006 and the Criminal Code 1995, to implement the second phase of reforms in response to the recommendations of the Report on the statutory review of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 and associated Rules and Regulations.
The Bill contains a range of measures to strengthen Australia’s capabilities to address money laundering and terrorism financing risks, and generate regulatory efficiencies, including amendments to:
- expand the circumstances in which reporting entities may rely on customer identification and verification procedures undertaken by a third party
- explicitly prohibit reporting entities from providing a designated service if customer identification procedures cannot be performed
- strengthen protections on correspondent banking by:
- prohibiting financial institutions from entering into a correspondent banking relationship with another financial institution that permits its accounts to be used by a shell bank, and
- requiring banks to conduct due diligence assessments before entering, and during, all correspondent banking relationships
- expand exceptions to the prohibition on tipping off to permit reporting entities to share suspicious matter reports (SMRs) and related information with external auditors, and foreign members of corporate and designated business groups
- provide a simplified and flexible framework for the use and disclosure of financial intelligence to better support combatting money laundering, terrorism financing and other serious crimes
- create a single reporting requirement for the cross-border movement of monetary instruments (which includes physical currency)
- address barriers to the successful prosecution of money laundering offences by:
- clarifying that the existence of one Commonwealth constitutional connector is sufficient to establish an instrument of crime offence, and
- deeming money or property provided by undercover law enforcement as part of a controlled operation to be the proceeds of crime for the purposes of prosecution.
A Regulation Impact Statement was prepared by the Department of Home Affairs, and has been assessed as compliant and consistent with best practice by the Office of Best Practice Regulation (OBPR).
The Department estimates the reforms will result in a net reduction in regulatory burden of $310.7 million dollars a year. The OBPR has agreed to this estimate.