Proposed changes to AML/CTF Rules: customer identification procedures

AUSTRAC has released proposed amendments to the AML/CTF Rules. The amendments add Chapters 79 and 80, and amend Chapters 21 and 48.

Chapter 79 will allow a reporting entity to carry out applicable customer identification procedures (ACIP) in respect of a customer, including any person purporting to act on behalf of the customer and any beneficial owner of the customer, after opening an account, provided no transaction — other than an initial deposit made at the time of the account opening — is conducted in relation to the account.

The consultation paper says that “Opening, in relation to an account, as defined in section 5 of the AML/CTF Act, means creating the account. It is immaterial whether:
(1) the account number has been given to the holder of the account; or
(2) the holder of the account or any other signatory to the account, can conduct a transaction in relation to the account.”

The proposed AML/CTF Rules do not restrict the modes of deposit used to make the initial deposit. For example, an initial deposit transaction conducted in relation to the account in the nature of a deposit could comprise part cash, part cheque.

A reporting entity will be prohibited from providing further designated services to a customer following receipt of the initial deposit, until the ACIP is completed.

Chapter 80 proposes to exempt certain types of products, which are unintentionally captured by the definition of a  stored value card in the AML/CTF Act.

Proposed paragraph 80.2(2) prescribes that a card or other instrument used only for the purposes of purchasing an entry into a lottery, or redeeming winnings in respect of a lottery, is not a SVC.

Proposed amendments to Chapter 21 of the AML/CTF Rules exempt the issuing of an interest in a litigation funding scheme from the operation of the AML/CTF Act.

A proposed amendment to Chapter 48 expands the current exemption for providing salary packaging services to also include payroll and superannuation clearance services.

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David Jacobson

Author: David Jacobson
Principal, Bright Corporate Law
About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.

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