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Newshot: Anti money laundering update

Update on the Anti-Money Laundering & Counter-Terrorism Financing ACT 2006

• compliance reports and AUSTRAC reminder notices
• status regarding premium funding exemption application and NIBA submission on AUSTRAC item 54 guidance

This update has been prepared in consultation with NIBA’s lawyer Mark Radford of Blake Dawson. It is provided by way of general guidance only and is not legal advice and should not be relied on as such. Each Member must seek appropriate professional advice on compliance with this legislation relevant to their business needs. Please refer to previous NIBA updates on AML by way of background.

AUSTRAC Reminder Notices and Compliance reports

AUSTRAC has been sending reminder notices to various NIBA members in relation to:

• enrolling online with AUSTRAC; and
• the submission of a compliance report by 31 March 2008 covering compliance with the Act in the period 13 December 2006 to 31 December 2007.

Obligations of Members only caught by Item 54

A NIBA member which only provides a designated service of the type covered in Item 54 (eg arranging for their customers to receive premium funding) is not required to:

• submit a compliance report; or
• enrol with AUSTRAC online. AUSTRAC does ask/invite (it is not compulsory) reporting entities of this kind to do so in order to allow them to use the system for future reporting obligations effective as at 12 December 2008.

If a person enrols a generic questionnaire must be completed which seeks to establish whether or not the person is a reporting entity. Once enrolled, the person is required to complete a more detailed questionnaire which identifies the individual designated services they provide.

Obligations of Members that provide designated services other than or in addition to Item 54 designated services

Members that provide designated services other than or in addition to Item 54 designated services (eg provision of premium funding) are required to:

• submit a compliance report by the 31 March deadline; and
• enrol with AUSTRAC online.

In order to submit the compliance report to AUSTRAC via the internet (preferred to hard copy submission) Members should visit http://www.austrac.gov.au and enrol with AUSTRAC online.Once enrolled, the system features a gateway for the user to complete and submit their compliance report online.

Premium Funding exemption application and Guidance on Item 54

Further to NIBA's last update on these issues there has been no response from AUSTRAC regarding:

• a request from NIBA and Ipfaa that AUSTRAC reverse its refusal of the application for an exemption for premium funding. Meetings have been scheduled with AUSTRAC to discuss the issue and a further update will be provided after these meetings; or
• NIBA's submission to AUSTRAC that its interpretation of Item 54 in the draft guidance note is too broad.

Given the above, because premium funding and arranging premium funding continue to be subject to the Act, NIBA members need to ensure that they will comply with the relevant obligations under the Act. NIBA will provide further updates and assistance shortly.