The new obligations under Tranche 2 of the Anti-Money Laundering/Counter-Terrorism Financing (AML/CTF) Act will require an adviser to submit a suspicious matter report to the Australian Transaction Reports and Analysis Centre (AUSTRAC) even if they decide to decline a client’s business.
The reforms, which will come into effect from 1 July this year, require providers of designated services to enrol with AUSTRAC and comply with a range of AML/CTF obligations, which includes comprehensive due diligence on new and potential clients.
“For example … even if we didn’t potentially take [a client] on, but we started to identify suspicious matters, we may have to report,” Cooper Grace Ward partner Phil Vickery told attendees of a webinar today about the new AML/CTF requirements.
“In some instances, it may not be suspicious, but we might be at such a preliminary level it’s not suspicious and we don’t end up having to complete [a report] because we didn’t get to the designated service.
“But in other instances, we have to be careful because if the reason we’re not taking on the client is [because] there are suspicious circumstances, then we may actually have a suspicious matter report obligation.”
Providers of designated services, which will now include many financial planning professionals and those involved in SMSFs, have a number of actions they need to take before the reforms come into place on 1 July.
They need to enrol with AUSTRAC after the enrolment for Tranche 2 entities opens on 31 March. They also need to appoint an AML/CTF compliance officer and develop and roll out their own risk assessment processes and procedures.
Vickery pointed out checks also need to be conducted on existing staff, from whom statutory declarations may need to be obtained.
“This isn’t just external, it’s internal. It also applies to our own employees,” he noted.
