Update for Remitters – Proposed Changes from November 2011

Background

The introduction of the Combating the Financing of People Smuggling and Other Measures Act 2011 will see changes to the way that remitters are registered and monitored by AUSTRAC, and in particular an extension to the types of businesses that will need to be registered.

It is proposed that from November 2011, the AML/CTF Act will require remitters to apply, or reapply, to be registered with AUSTRAC, and the application will need to demonstrate suitability for registration.

The key changes are outlined below:

New categories of remitters

The Combating the Financing of People Smuggling and Other Measures Act 2011 introduces three new categories of remitters, which are:

1. Remittance network providers: an organisation that operates a network of remittance affiliates by providing the systems and services that enables its affiliates to provide remittance services;

2. Affiliate of remittance network provider: a business that provides remittance services to customers as part of a remittance network facilitated by a remittance network provider; or

3. Independent remittance dealer: a business that provides remittance services to customers using their own systems and processes, independent of a remittance network.

New registration scheme

All remitters will need to be registered with AUSTRAC under the new registration scheme and will need to reapply for registration (renewal) every three years.

The new registration scheme will:

• Require a person seeking registration to provide the AUSTRAC CEO with information relevant to their suitability for registration.

• Allow the AUSTRAC CEO to obtain information from other persons to determine whether the person is suitable to be registered.

• Allow the AUSTRAC CEO to refuse, suspend, cancel or impose conditions on the registration of a remittance network provider, remittance affiliate or independent remittance dealer. The applicant or registered remittance provider will also be able to make an application to request an independent review of a decision by the AUSTRAC CEO.

• Allow the AUSTRAC CEO to issue infringement notices for certain breaches of registration requirements.

•  Require remittance network providers to undertake some AML/CTF Act reporting obligations on behalf of their affiliates.

Transition to the new registration scheme

Remitters that are already registered with AUSTRAC will need to register under the new registration scheme once it comes into operation, which is currently proposed to take place in November 2011:

• Independent remittance dealers will have six months to apply for registration

• Remittance network providers will have 12 months to apply for registration for themselves and their affiliates.

This registration will be available to all remitters through AUSTRAC Online.

Further information

AUSTRAC will shortly publish a fact sheet on the new registration requirements for remitters which should clarify some of these points.

ComLaw has published a consolidated AML/CTF Act 2006, taking into account amendments up to Combating the Financing of People Smuggling and Other Measures Act 2011 that applied as at 1 July 2011. In particular, the inclusion of various schedules at the end of the updated AML/CTF Act incorporate the changes to the remittance sector, which were bought about as a result of the Combating the Financing of People Smuggling and Other Measures Act 2011.

In addition, please note a number of draft AML/CTF Rules have been published which:

• specify information to be included in a registration application;

• specify matters to be considered by the AUSTRAC CEO in considering applications for registration;

• relate to reporting obligations of registered remittance affiliates;

• relate to the Remittance Sector Register;

• deal with the suspension of registration from the Remittance Sector Register; and

• specify matters to be considered by the AUSTRAC CEO when deciding to cancel a registration.

These draft AML/CTF Rules can be accessed at the following location: http://www.austrac.gov.au/aml_ctf_rules.html