AML/CTF insights for existing entities

As Australia prepares for the landmark Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) reforms – set to take effect in the coming months – businesses across sectors face a pivotal moment not just to comply with how to manage financial crime risk, but to transform themselves for the better. The real challenge lies in building a culture that embeds AML obligations into the DNA of an organisation.

The current AML/CTF regime only extends to digital currency exchanges regulating exchanges between digital currency and fiat currency. The new Act introduces significant amendments to extend coverage to a broader range of virtual assets and virtual asset service providers (VASPs) through a revised set designated service.

The revised Australian AML/CTF Act 2024 introduces the concept of value transfer chains to enhance transparency and traceability in value transfers, including money, virtual assets, and property.

The revised Australian AML/CTF Act 2024 introduces the concept of a 'reporting group,' which allows related entities to manage and mitigate common AML/CTF risks more efficiently by sharing compliance responsibilities and resources. This concept aims to streamline compliance efforts and enhance the overall effectiveness of AML/CTF measures across related entities.

The International Funds Transfer Instruction (IFTI) reporting regime is a critical component of AML/CTF framework. It requires certain businesses to report international funds transfers to AUSTRAC.

Australia's AML reforms are transitioning the initial Customer Due Diligence (CDD) requirements from the AML/CTF Rules to the AML/CTF Act, focusing on an outcomes-based framework to enhance clarity and effectiveness of CDD processes.

Money Laundering / Terrorism Financing (ML/TF) risk assessment is a process of identifying, assessing, and understanding the risks of money laundering and terrorist financing (ML/TF) that an organisation may face. It involves evaluating various factors to determine the level of risk and the implementation of appropriate measures to mitigate those risks.

Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) program is crucial for organisations to comply with AML/CTF obligations and requirements. Under the AML/CTF Act 2006, all reporting entities must establish and maintain an AML/CTF program that identifies, mitigates, and manages their money laundering and terrorism financing (ML/TF) risks, and addresses the AML/CTF system and control requirements set out in the AML/CTF Rules.

Australia's amended AML/CTF Act introduces an outcome-based framework, focusing on achieving effective results in combating money laundering and terrorism financing (ML/TF) rather than just adhering to prescriptive rules. This approach aligns with international standards set by the Financial Action Task Force (FATF).

Explore the key roles and responsibilities in AML/CTF governance, including the involvement of the Board, senior management, and compliance officers. Understand the amended AML/CTF Act 2024 requirements, risk management strategies, and the importance of fostering a culture of compliance within organizations.