Australian Government introduces new Anti Money Laundering and Counter Terrorism Financing Requirements
This article is designed to introduce you to some amendments to Anti Money Laundering and Counter Terrorism Financing concepts, and to understand how these factors may impact our relationship with you.
The Australian Government introduced the Anti Money Laundering and Counter Terrorism Financing (AML/CTF) Act 2006 (“Act”) in response to global pressures to strengthen Australia’s ability to detect and prevent money laundering and the financing of terrorism. In our capacity as a reporting entity, we implemented an AML/CTF Program. In part, the purpose of the AML/CTF Program was to adopt customer on-boarding requirements prescribed by the Act and to implement them as part of our daily ritual.
In the wake of recent amendments to the Anti Money Laundering and Counter Terrorism Financing Rules Instrument 2007 (“AML Rules”), we have had to further update our existing AML/CTF Program. Under the new AML Rules, we must now consider additional factors when on boarding new customers or reviewing existing customer accounts.
So what’s changed?
In addition to satisfying existing AML Rules, we must expand our customer on boarding regime to ensure we can:
Identify and verify your beneficial owners:
- We understand requesting information from your shareholders may be a sensitive topic, particularly if shareholders are related parties not involved in the management of your business (for example: wives, siblings or children). Rest assured, the collection of this information does not submit them to any legal risk or liability.
- As a result of the newly amended AML Rules, we are now obligated to both identify and verify your beneficial owners, usually your shareholders. This means requesting that your beneficial owners provide us with certified copies of their identification.
- A “beneficial owner” is an indivudual who ultimately owns or controls your organisation, whether directly or indirectly. Previously, identifying your beneficial owners would have satisfied our legal obligations under the Act.
Consider additional Money Laundering and Counter Terrorism risks
Significantly, and for the first time, the AML Rules require that we also ascertain:
- Whether you or your shareholders are politically exposed persons; and
- What your source of funds or wealth are; and
- The nature and purpose of your relationship with us.Again, these questions may cause some discomfort particularly questions regarding your source of funds or wealth. Irrespective of AML requirements, it is important for us to, understand your business operations, target market and financial position, as this will ensure our partnership with you is both long and successful. If we are well informed about your business habits we can offer you the right kind of financial products and services.
We are here to help
There is no doubt these additional requirements will cause practical challenges for our frontline staff who are responsible for contacting you and collecting this information. It is our hope to balance compliance obligations with commercial workability by ensuring our procedures foster and encourage our relationship with you.
Our Money Managers have been trained to answer your queries and concerns and deal with your information confidentially at all times. Remember: our goal is to get you back to doing what you do best, business!
Peta De Michele
Legal Counsel, Moneytech Limited
This opinion piece briefly considers complex legal and financial issues. It is not a substitute for legal advice.
Moneytech is an Australian commercial finance organisation specialising in Trade Finance (Credit Express) and Debtor Finance (Confirmed Capital). We aspire to become trusted partners of our customers. We support their growth by both understanding their business, and creating innovative financial products based on their feedback which fulfils their needs. Continue to our web site to learn more, or call us on 1300 858 904.