Austrac is consulting on updates to the new AML/CTF Rules.

Austrac says that the purpose of the proposed changes to the AML/CTF Rules is to:

• fully operationalise the AML/CTF Act and rules,
• correct newly-discovered issues, and
• redevelop the reporting group framework to reduce administrative burden for those creating a reporting group and selecting a lead entity.

It proposes to introduce an ‘opt‑out’ reporting group model, under which related entities in a corporate group or other control structure will form a reporting group by default, unless a reporting entity formally declines membership in writing.

Additional amendments include:

• technical clarifications to the operation of certain customer due diligence provisions;
• extending the timeframe to verify KYC information previously verified by another party to a real estate transaction;
• prescribing additional agencies as specified agencies eligible to issue Keep Open Notices;
• requiring monitoring for prohibited hate group offences as part of monitoring for unusual transactions and behaviours under safe harbour rules;
• amending the travel rule to extend the existing customer exemption from verifying certain information (including payer address) to all customers for transactions conducted before 1 July 2030; and
• updates and corrections to information required in enrolment and registration applications to accommodate all possible business models and structures.

AUSTRAC has also developed several rules‑based exemptions which:

• provide regulatory relief to specified classes of persons where it was not intended that they be captured by the AML/CTF regime;
• exempt ATM operators from undertaking initial customer due diligence about people who withdraw less than $10,000 in cash, where the person isn’t otherwise the ATM operator’s customer;
• exempt virtual asset service providers from undertaking initial customer due diligence about people who withdraw less than $1,000 in virtual assets to their self-hosted wallet, where the person isn’t otherwise the VASP’s customer;
• exempt reporting entities that issue open-loop gift cards from undertaking initial customer due diligence about the gift card recipient when paying for goods and services where there are other appropriate risk mitigations; and
• exempt other people who issue open-loop gift cards from AML/CTF obligations where there are other appropriate risk mitigations.

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Author: David Jacobson
Principal, Bright Corporate Law
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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.