Key dates

The new CDD requirements took effect on 1 June 2014 and apply to persons who become customers of a reporting entity after that date. Policy principles will be in place for the period 1 June 2014 to 31 December 2015 in which certain enforcement action will not be taken by AUSTRAC if a reporting entity meets certain conditions, including taking “reasonable steps” to implement the reforms during the policy principles period.

Summary 

Reporting entities are now required to:  

• consider additional risk factors in identifying ML/TF risk, including a customer’s source of wealth and funds and jurisdictions with which the customer deals;
• collect and verify the full name of the settlor of trusts, unless the settlor contribution is under $10,000, the settlor is deceased or a simplified trustee verification procedure applies; 
• collect and verify the full name, date of birth or full residential address of each beneficial owner of a customer. The beneficial owner is presumed to be the same as the customer unless there are reasonable grounds to suggest otherwise or an exception applies; 
• include in the AML/CTF program a process to determine whether a customer or beneficial owner is a politically exposed person (PEP), being someone entrusted with a prominent public function. ¹Different verification requirements apply depending upon the level of ML/TF risk associated with the PEP and whether they are domestic or foreign. ML/TF risk is determined in accordance with your existing program; 
• in relation to Part A of a standard and joint AML/CTF program, understand the nature and purpose of your business relationships with customers; and 
• implement ongoing CDD measures to reflect the requirements that apply to customers, beneficial owners and PEPs, including record keeping and updating requirements. ² 

What to do next 

Click here to visit AUSTRAC’s webpage to read the policy principles and comply with the reforms.

Footnotes