The Attorney-General has introduced the Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2007 into Parliament to amend the AML/CTF Act.

The Bill addresses operational and technical issues, as well as taking into account concerns raised by Reports of the Standing Committee on Legal and Constitutional Affairs and the Senate Standing Committee for the Scrutiny of Bills. Some of the changes will be backdated to 12 December 2006 when the Act commenced.

Amendments include:

• amendment of item 18 in table 1 in subsection 6(2). The amendment limits the coverage of item 18 to an account held with an ADI, bank, building society, credit union, or a person specified in the rules. This is to limit accounts covered by the AML/CTF Act to those held with a financial institution. Without this amendment item 18 captures accounts with non-financial institutions which were not intended to be covered by the AML/CTF Act.
• a new item 18A is inserted into table 1 in subsection 6(2). This amendment will make the issuing of a debit card to an additional cardholder a designated service under the AML/CTF Act. The customer of the service is the signatory who receives the card. See the definition of “signatory” in section 5 of the AML/CTF Act.
• the cell at item 19 in the table in subsection 6(2) is repealed, and replaced with a new cell which provides that it is a designated service where a building society or credit union issues a debit card enabling a building society or credit union account holder to debit an account which the building society or credit union holds with an ADI, bank, or person specified in the AML/CTF Rules. Without this amendment, item 19 captures accounts with non-financial institutions which were not intended to be covered by the AML/CTF Act.
• a new item 19A is inserted in table 1 in subsection 6(2) providing that the list of designated services includes issuing a debit card to a signatory to an account held with a building society or credit union where the debit card allows access to an account held by the building society or credit union with an ADI, a bank or a person specified in the AML/CTF Rules. The customer of the service is the signatory who receives the card. See the definition of “signatory” in section 5 of the AML/CTF Act.
• Item 11 of the Bill repeals the existing cell at item 20 of table 1 in subsection 6(2) andreplaces it with a new cell which specifies that the item is limited to where a trustee or manager of a trust, issues a debit card that enables the holder of a beneficial interest in the trust to debit an account held by the trustee or manager of the trust, held with an ADI, a bank, a building society, a credit union or a person specified in the AML/CTF Rules. Without this amendment item 20 captures accounts with non-financial institutions which were not intended to be covered by the AML/CTF Act.
• Item 12 inserts new item 20A in table 1 in subsection 6(2) which will mean that a designated service is provided when a trustee or manager of a trust issues a debit card that enables a signatory authorised by the holder of a beneficial interest in the trust to debit an account held by the trustee or manager of the trust held with an ADI, a bank, a building society, a credit union or a person specified in the AML/CTF Rules. The customer of the service is the signatory who receives the card. See the definition of “signatory” in section 5 of the AML/CTF Act.
• Item 24 repeals subsection 42(6) of the AML/CTF Act. Subsection 42(6) exempts aholder of an Australian financial services licence who provides a designated service under item 54 of table 1 in subsection 6(2) from the reporting obligations under Division 2 (Reports of Suspicious Matters) of Part 3 of the AML/CTF Act. This amendment means that reporting entities providing designated services under Item 54 of table 1 in subsection 6(2) will have to report suspicious transactions. This is consistent with all other reporting entities being required to report suspicious transactions.
• New Section 67(2A): This new subsection excludes from the requirements of Part 5, instructions that arise from the use of a debit or credit card at a branch of a financial institution, in circumstances in which the number of the card is included in the instruction, the card is not of a kind specified in the AML/CTF Rules and the use does not take place in circumstances of a kind specified in the AML/CTF Rules. “Financial institution” is defined in section 5 of the AML/CTF Act. It was not intended that debit and credit card transactions at a branch of a financial institution would be subject to reporting requirements for “electronic funds transfer instructions” under Part 5. This amendment ensures that these services will not be subject to the reporting requirements of Part 5. The exemption is consistent with the other exemptions in section 67. “Electronic funds transfer instructions” is defined in section 5 of the AML/CTF Act.
• New subsection 67(4) excludes instructions given by way of a merchant terminal from the requirements of Part 5, in circumstances in which the operation is authorised by a financial institution, the merchant terminal is not of a kind specified in the AML/CTF Rules and the operation does not take place in circumstances of a kind specified in the AML/CTF Rules.This amendment is to bring merchant terminals in line with the exemption for use of debit and credit cards in Automated Teller Machines. It covers, for example, the use of a card in an EFTPOS terminal at a supermarket. The exemption applies even if a person obtains cash out at the same time.
• New Subsection 85(6) allows a reporting entity that only provides designated services under Item 54 of table 1 in subsection 6(2) to adopt a joint anti-money laundering program if it is a member of a designated business group.
• new Subsection 123(5A) prohibits a person to whominformation has been disclosed under subsection 123(5) from disclosing the information to another person. Subsection 123(5) allows an exemption from the subsection 123(2) tipping off prohibition for reporting entities that make a disclosure to a legal practitioner for the purpose of obtaining legal advice.
• new Subsection 123(8A)prohibits a person to whom information has been disclosed under subsection 123(8) from disclosing the information to another person. Subsection 123(8) allows an ADI to disclose the matters, which would otherwise be subject to the prohibition in subsection 123(2), to an owner–managed branch of an ADI, but a person to whom such a disclosure is made is prohibited from disclosing the information to another person.(See section 12 – Owner-managed branches of ADIs).