On 2 October 2014, the Australian Transaction Reports and Analysis Centre (AUSTRAC) commenced consultation on proposed changes to its annual compliance report. Certain entities have an obligation to prepare an annual report (the ‘annual compliance report’) relating to their compliance with anti-money laundering and counter terrorism financing rules. The annual compliance report comprises an online questionnaire with fixed choice responses across 22 key question areas. The report is a component of AUSTRAC’s risk-based approach to supervision of compliance with relevant rules. The Regulation Impact Statement (RIS) prepared by AUSTRAC for the proposed changes identified three problems with the current arrangements:
- The current compliance questions are not as relevant as when first developed.
- The regulatory burden of the current arrangements on certain entities may not be proportionate to their risk of non-compliance.
- Some stakeholders have indicated that they consider the report to have little or no value to them.
It is proposed to replace the current annual compliance report with an enhanced compliance report and an annual return. The enhanced compliance report is essentially an updated version of the current compliance report while the annual report would require a reporting entity to provide a comprehensive report on its business environment, money laundering and terrorism financing risk and the effectiveness of its anti-money laundering and counter terrorism financing program. Certain larger business will be required to prepare both reports, while certain smaller and lower risk businesses will only need to prepare the enhanced compliance report. Overall it is estimated that the proposal will result in a net reduction in the regulatory burden on businesses by $85,200 per year. The RIS was prepared by AUSTRAC and assessed as consistent with best practice at the early assessment stage by the Office of Best Practice Regulation.
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