Anti-Money Laundering and Countering Financing of Terrorism Bill significantly amended

Significant amendments are recommended to the Anti-Money Laundering and Countering Financing of Terrorism Bill in the report back last week of the Foreign Affairs, Defence and Trade Select Committee. 

The recommended changes: 

  • move further towards a risk-based approach to customer due diligence (including for existing customers) and wire transfers 

  • remove the provisions regarding civil and criminal liability for senior managers

  • provide immunity from civil or criminal liability for actions taken in good faith and that are reasonable in the circumstances

  • remove the domestic limb of the “politically exposed person” (PEP) definition

  • allow enhanced customer due diligence to be conducted as soon as practicable after conducting an occasional transaction with a PEP 

  • clarify that an entity that falls within the definition of “financial institution” will be required to comply only to the extent that its activities are those of a financial institution

  • allow reporting entities to share information within their “designated business groups”, for deciding whether to make a suspicious transaction report

  • allow the AML/CFT supervisors to appoint a single supervisor where a reporting entity falls within the jurisdiction of multiple supervisors

  • limit the scope of the regulation making powers, and

  • move further towards harmonising with the corresponding Australian legislation, as far as the Committee considered practicable. 

The Committee suggested adopting a single supervisory body and a national transaction database, as are used in Australia, but has not provided for these changes in the Bill.  Some limited clarification around commencement dates for various aspects of the Bill was provided, but key details of sequencing and implementation (particularly the development of the regulations and codes of practice) have been left to a “clear and coordinated timetable” yet to be developed.  That said, reporting entities should be permitted time to establish systems and get up to speed with the significant new requirements within the safe harbour of a “prosecution-free” period. 

A copy of the Committee’s report and the Bill as reported back is available here. For further information please contact the lawyers featured.

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Related topics: Financial services regulation; Anti money laundering

International trade & investment; Finance; Financial services regulation

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