AUSTRAC’s Recent Guidance – Some welcomed assistance for ALL Reporting Entities!
AUSTRAC does seem to be on quite the mission this year to not only enforce but to also assist industry in meeting their ongoing compliance obligations. The regulator has shown signs of uplift with clear strategies reported in their AUSTRC Annual Report 2019 – 2020 for the up and coming year and a $104 million dollar funding boost to increase resources as well as the delivery of an enhanced reporting system. No doubt the increase in funding will assist the 15,000 Reporting Entities by putting out further guidance which in turn will assist the regulator in obtaining data-rich accurate intelligence to continue to work with law enforcement and other partner agencies in order to keep on catching the bad guys!
AUSTRAC recently released some very informative and useful guidance for the remittance industry, but we believe the guidance is useful to all reporting entities. The toolkit contains downloadable and printable resources to allow reporting entities to understand how to comply with AUSTRACs guidelines.
Managing your AML/CTF Obligations: Preparing and implementing an AML Program. This guide has a very useful checklist which sets out all the obligations which should be included in an AML Program. It goes through exactly what should be included in a business’s risk assessment including considerations for services and methods of delivery and customer profile. There are some clear examples and a template that may be used to align with potential treatment/actions. The suggested list of ML/TF risk indicators and treatment/actions is not exhaustive and should only serve as a guide when considering the ML/TF risks that might apply to a reporting entities business and examples of treatment strategies to have in place to mitigate those risks. The guide gives examples of how to structure an AML/CTF Training awareness program as well as examples of what checks should be carried out as part of an Employee Due Diligence program. There are information and examples provided on what steps to take once an AML program is implemented and what oversight must be conducted, as well as the role of the AML Compliance Officer and how important it is to document who the backup person is for the role should the nominated compliance officer be absent. The importance of evidencing process and procedure for AUSTRAC feedback, reporting obligations and accurate record-keeping is highlighted throughout the guidance. We love the in-depth review and breakdown of collecting and verifying KYC information with another very useful checklist approach and some specific guidance on how to respond to KYC discrepancies; AUSTRAC’s expectation is that there should be a risk-based system in place to respond to any discrepancies and a clear process for either requesting additional information or referring the matter on to the compliance officer and/or performing ECDD.
Customer Due Diligence: Identifying Individual Customers. This guide presents a fact sheet with some clear examples of why a customer must be identified and how to identify individual customers. A customer’s identity must be checked by collecting and verifying information before the provision of designated services also known as customer identification or Know Your Customer (KYC). After checking a customer’s identity, reporting entities must be satisfied that the customer is who they claim to be. In all instances, it is at the discretion of the reporting entity whether to provide a designated service to a customer based on an assessment of the ML/TF risk of. A customer’s identity must be collected and verified against a reliable and independent source. The use of independent documents or electronic data or a combination of the two can be used to verify customer information. The guide outlines the types of information and what identification documents (primary and secondary) are required to collect and verify individual information for customers and sole traders. High-risk customers and enhanced customer due diligence procedures must be applied when assessing a customer or transaction as high-risk, which may involve extra checks on a customer’s identification, collecting additional information and doing additional verification. The same process applies to PEP’s with additional enhanced due diligence procedures applied regarding the customer’s background via an internet search and possible searching databases and reports from organisations that specialise in analysing corruption risks. This guide is useful and can be used as a quick reference guide for those working in customer onboarding, due diligence, and enhanced customer due diligence.
Suspicious Matter Reporting: Suspicious Matter Reports (SMRs) This resourceful guide outlines a very useful “do’s” and “don’t” section on getting the right information included in all SMR intelligence reports. A key “do” standout is “While not always apparent, please provide your best estimate of the suspected offence committed” and do not “Attach warrants or notices from government agencies or inappropriate images.” The key message is the encouraging messaging is that reporting SMR’s will not cause AUSTRAC to view a reporting entities business unfavourably. Reporting suspicion indicates reporting entities are likely to have a robust monitoring system and AML/CTF program which is a crucial part of meeting your ongoing compliance obligations.
International Funds Transfer Instruction Reporting: International Funds Transfer Instruction (IFTI) again, a very useful explanatory guide to what an IFTI is and when one is required. The ‘Getting IFTI’s right’ section stresses the importance of obtaining accurate customers and beneficiary information including the removal of initials and abbreviations. Don’t forget to record full addresses and not PO boxes as well and where available include additional information such as IP address or device ID for online customers.
If you have any questions or need any assistance regarding the information above – please do not hesitate to reach out, happy reading!
For further reading and to access the full suite of guidance material, please click here:
For further reading on the 2019 – 2020 AUSTRAC Annual Report please click here: