Crypto-currencies included under new AML/CTF Amendment

06 February 2018

On the 7th December 2017, The Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2017 (AML/CTF Amendment Act) was passed by both Houses of Parliament, receiving Royal Assent on 13th December 2017 and a commencement date of 1st April 2018. The AML/CTF Amendment Act introduces three major changes:
  • An increase in power to AUSTRAC CEO
  • Inclusive of cryptocurrencies
  • Easing of regulatory relief for low-risk sectors

Increase in power to AUSTRAC CEO

Prior to the Amendment, the CEO of AUSTRAC only had limited powers when issuing infringement notices and remedial directions. Under the new regime, the CEO of AUSTRAC will have the power to enact the following:
  • Issue infringement notices for a wider range of offences including non-compliance with know your customer (KYC) reporting and record keeping.
  • Issue remedial direction to a reporting entity to retrospectively comply with a breached obligation.
  • Perform tasks that are necessary to their functions.
  • Police and Customs officers to be given general search and seizure powers at Australian borders.

Inclusivity of cryptocurrencies

At current, the AML/CTF Act only applies to e-currencies, excluding convertible cryptocurrencies, that pose greater money-laundering and terrorism-financing risks due to a greater anonymity. The inclusion of digital currency regulation in the Amendment means that digital currency exchange services will need to comply with obligations, resulting in a potentially positive impact on the reputation of cryptocurrencies.

Easing regulatory relief for low-risk sectors

The Amendment makes many changes to bring regulatory relief to low-risk sectors, including the de-regulation of cash-in-transit sector, insurance intermediaries and general insurance providers, compliance obligations can be shared through a ‘corporate group’ and the definition of ‘correspondent banking relationship’ has been broadened to include foreign entities that weren’t previously recognised as financial institutions.  

Where to from here?

Given the breadth of the changes and the upcoming commencement date, it’s now more important than ever that companies that are subject to the current AML/CTF Act have a strict process in place. In addition to this, despite AML/CTF obligations not being subject to all industries, businesses who may be impacted by the introduction of Tranche 2 should take note also – get ahead of the game and remain prepared!   If you’d like to know how these issues may affect your business, get in touch today!

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About the author

Lee Bailie

Lee joined InfoTrack in 2017 with a background in the professional services industry and information technology, spanning over 15 years. As the General Manager of Product and Innovation, Lee is responsible for determining customer needs through direct contact with our clients, market research, product consideration, specifications and industry requirements. Lee works closely with InfoTrack’s development team and clients in order to deliver innovative solutions that are aligned to our customer’s needs. He maintains a constant line of communication with InfoTrack’s client base to ensure that his team are developing products that truly improve the productivity and efficiency of the clients they serve.