The AML/CTF Act imposes obligations on financial service and credit providers that provide designated service(s) with a geographical link to Australia (Reporting Entities). These Reporting Entities are required to establish a written AML/CTF Program that addresses potential risks related to money laundering (ML) and terrorism financing (TF).
All Reporting Entities must implement one of three types of AML/CTF Programs:
- Standard AML/CTF Program;
- Joint AML/CTF Program; or
- Special AML/CTF Program.
Standard AML/CTF Programs are required to be implemented for individual Reporting Entities and consist of two parts:
- Part A – the main purpose of Part A is to identify, mitigate and manage risks associated with ML and FT. Other elements which are required to be included in Part A are specified in Chapter 8 of the AML/CTF Rules.
- Part B – sets out customer identification procedures in accordance with the stipulated Chapter 4 of the AML/CTF Rules.
Joint AML/CTF Programs are for designated business groups comprising multiple Reporting Entities. A Joint AML/CTF Program is required to have a Part A and Part B just like the Standard AML/CTF Program.
Special AML/CTF Programs are designed for Reporting Entities who only provide designated services outlined in item 54 of table 1 in s 6 of the AML/CTF Act. This item covers AFSL holders who arrange for a person to receive a designated service. For instance, if you do not issue financial products, but arrange for your clients to acquire a financial product from another Reporting Entity, you are likely to fall into item 54. This category commonly includes financial advisers who arrange for their clients to receive designated services via another Reporting Entity.
Notably, a Special AML/CTF Program is not required to include Part A. It only requires Part B, to outline the applicable customer identification and verification procedures which are implemented by the Reporting Entity.
Sophie Grace has extensive expertise and is ready to guide you through the complex regulatory requirements, while assisting you in crafting the right AML/CTF Program tailored to your operations.