The SMSF Association has urged member businesses that need to comply with anti-money laundering (AML) and counter-terrorism financing (CTF) reforms to take immediate action and implement a compliance program before 1 July.
Association policy manager Keddie Waller said the organisation was concerned many SMSF professionals captured under the Tranche 2 reforms to the AML/CTF regime, which includes financial advisers and accountants, had yet to take the steps required to comply with pending obligations.
Waller said under the expanded regime, individuals and businesses that provide one or more of the designated services outlined in Tranche 2 will be required to enrol with the Australian Transaction Reports and Analysis Centre (AUSTRAC) as a reporting entity, but compliance went well beyond that measure.
She pointed out they will need to meet a number of new obligations, including new customer due diligence procedures every time they provide a designated service.
Additionally, newly regulated entities must document their AML/CTF program, which has been tailored to their business, appoint an AML/CTF compliance officer ensuring they pass the relevant fit and proper tests, train staff on their AML/CTF obligations and procedures, and be prepared to identify and report suspicious matters.
Waller noted AUSTRAC had released starter kits earlier this year, but some businesses may require additional support to meet their new compliance requirements.
“Businesses unable to utilise AUSTRAC’s starter kit may need to consider alternative support options, including compliance workshops and alternative AML/CTF program templates,” she said.
“Businesses that delay their preparation risk significant regulatory exposure and operational disruption once the reforms take effect and potential financial pressures, including the risk of substantial financial penalties, apply.
“With weeks, not months, until the reforms commence, it is critical firms start to prepare now or risk increased regulatory scrutiny.”
The association has flagged preparedness for Tranche 2 of the AML/CTF reforms for nearly 12 months, as well as pointing out the reforms would bring accountants inside the AML/CTF regime and directing them to AUSTRAC, which has developed a number of resources to help practitioners and businesses meet their obligations.
At that time it stated “common services such as setting up trusts, including SMSFs, handling client payments and facilitating debt or asset financing will soon be regulated, requiring accountants to enrol with AUSTRAC and comply with new obligations”.
Jason Spits
SENIOR JOURNALIST
Jason is a senior journalist with Benchmark Media and writes for the selfmanagedsuper website and magazine and smstrusteenews website. He has covered financial services since 1999 and has written about life insurance, superannuation, investment management and financial advice, in both a freelance and in-house capacity, and also did a brief stint as a media manager for an industry association. He has been the editor of trade titles Money Management and Financial Standard, and was most recently senior journalist with life insurance title Riskinfo.
Articles by Jason