AUSTRAC has published draft guidance on outsourcing that will apply to businesses that use outsourcing arrangements to help them meet their anti-money laundering and counter-terrorism financing (AML/CTF) obligations.

The draft guidance identifies:

• AML/CTF obligations when outsourcing
• money laundering and terrorism financing (ML/TF) risks that could arise from outsourcing
• steps to ensure providers tailor outsourcing arrangements to their business and its specific ML/TF risks.

The guidance emphasises that businesses are responsible for any breach of their AML/CTF obligations under outsourcing arrangements and should therefore have appropriate oversight of their providers.

The guidance provides examples of good practices when using outsourcing arrangements, and examples of practices that may lead to non-compliance and increase ML/TF risks to a business.

Outsourcing means engaging an external provider to help you meet your AML/CTF obligations, for example:
• reporting to AUSTRAC
• developing and maintaining your AML/CTF program
• carrying out an independent review of you AML/CTF program
• carrying out applicable customer identification procedures
• employee due diligence, AML/CTF risk awareness training and transaction monitoring.

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