Receiving a Section 167 Notice from AUSTRAC

1. Prioritise the notice and assign responsibility

Entities should promptly review the notice, identify information or documents requested and respond within the required timeframe. The notice should be assigned to an appropriate senior manager.

2. Determine whether the entity is providing designated services

Entities should review the services provided against the designated services listed in section 6 of the AML/CTF Act. This includes considering the nature of its activities, how services are delivered and the types of customers and jurisdictions it deals with.  

If you are uncertain whether your entity is providing designated services or how the AML/CTF Act applies to your business, you should seek external legal advice. This will help clarify your obligations and ensure an appropriate response is provided to AUSTRAC.

3. Assess your AML/CTF obligations

If you are providing a designated service, you must assess whether your entity has met the obligations under the AML/CTF Act, including the requirement to:

• enrol with AUSTRAC (within 28 days of providing a designated service);
• develop and maintain an AML/CTF program;
• conduct a business risk assessment;
• implement customer due diligence procedures; and
• establish an appropriate governance framework.

4. Respond proactively to AUSTRAC’s notice

Entities must ensure the information and documentation provided to AUSTRAC are accurate, complete and consistent with its business activities. Entities should clearly explain the nature of the services provided and address each request made by AUSTRAC.

5. Maintain records of communication with AUSTRAC

Entities must maintain records of communications with AUSTRAC and proactively respond to any requests.

What happens if you fail to comply with a section 167 notice?

Failure to comply with a section 167 notice may result in criminal or civil penalties.

Receiving a section 167 notice does not, of itself, mean the entity has breached the AML/CTF Act or that enforcement action will follow. However, the notice should be treated as an opportunity to assess the entity’s regulatory position, address any compliance issues and ensure that its obligations are met.

If you would like our assistance with determining whether your entity is providing designated services or require assistance with AUSTRAC enrolment or preparation of an AML/CTF Program, please contact us.

Further Reading