AUSTRAC updates agent banking arrangements threshold transaction report obligations

AUSTRAC has updated its guidance relating to when customers use an ADI other than their account provider when depositing physical currency.

An agent banking arrangement consists of:
• an account provider offering deposit accounts to customers;
• an agent bank accepting deposits, including cash deposits, on behalf of the account provider, but not maintaining the customers’ accounts.

Austrac’s view is that the account provider and not the agent is providing the designated service by allowing a transaction to be conducted on the customer’s account and that an agent bank that receives a deposit from a customer under an agent banking arrangement does not provide a designated service.

In such a situation, the agent bank is providing a deposit service on behalf of the account provider (or deposit-taker).

Austrac, therefore, expects the account provider will be required to submit a threshold transaction report  (TTR) if the designated service involves a threshold transaction unless the parties agree that the agent bank has the authority to report on the account provider’s behalf. The agreement should ensure TTRs are submitted within the required timeframe and include all information required under the AML/CTF Rules.

However, Austrac’s view is that the account provider is liable for any failure to submit a TTR, even if there is an agreement in place authorising the agent bank to submit TTRs on behalf of the account provider.

When an agent bank submits TTRs on an account provider’s behalf, AUSTRAC expects the account provider to ensure that appropriate risk management arrangements are in place for agent bank monitoring and assurance.

It is therefore critical that both parties identify their respective obligations under any agent banking arrangement to ensure appropriate reporting and oversight processes are in place to meet TTR reporting obligations.

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