Luật học - Chapter 6: The financial transaction reports act 1988 and the anti - Money laundering and counter-terrorism financing act 2006

This is the prescribed textbook for your course.Available NOW at your campus bookstore!The Financial Transaction Reports Act 1988 and the Anti-Money Laundering and Counter-Terrorism Financing Act 2006Chapter 6Learning objectivesAt the end of this chapter you should understand:the objectives of the FTR Act and the AML/CTF Actto whom the Acts applythe types of transactions that must be reportedthe requirements that must be met for customer identificationthe penalties imposed by the Actsthe impact of the Acts on businesses and tradethe role of AUSTRAC in relation to the Acts.IntroductionObject of the Financial Transactions Report Act 1988 (Cwlth): To assist in the detection of tax evasion and other criminal activity, such as corporate crime and the ‘laundering’ of money obtained from drug trafficking and organised crime.The Australian Transaction Reports and Analysis Centre (AUSTRAC)Body responsible for administering the Act:CollectsCompilesAnalysesDistributes informationMakes information available to:Australian Tax OfficeAustralian Federal PoliceAustralian Customs ServiceNational Crimes CommissionAustralian Securities and Investments CommissionObligations and reporting requirementsCash dealers—s3(1):Banks and building societiesInsurance and finance companiesSecurities and futures dealersCasinos, bookmakers and totalisator agency board (TAB)SolicitorsTo report:Cash transactions (i.e. the physical transfer of currency from one person to another of not less than $10 000 within Australia)Suspect transactionsWithin:1 or 2 days of suspect transaction15 days of transaction involving Australian currency (1 or 2 days if suspect)day after transactions involving foreign currency.Exemptions from the requirement to reportMust involve a financial institutionThe transaction can be:entered in an exemptions registerbe in an exceptional category that is automatically exempt, e.g. withdrawals for payroll purposes.Reporting the importing and exporting of currency Where members of the community personally convey into or out of Australia, Australian currency or foreign currency not less than A$10 000, it must be reported to a customs officer at the time.Reporting on ‘suspect transactions’Suspect transactions are those that cause the cash dealer to feel apprehensive or mistrustful about the transaction (non-cash and cash transactions), and may be relevant with respect to:tax evasion or attempted evasionan offence against the law of the Commonwealth or a territorythe Proceeds of Crimes Act 1987 (Cwlth).They must be reported as soon as practicable.Opening new accountsSignatory to account must be identified via:identification referenceprimary or secondary identification document.International funds transfer instructionsMoney transferred into or out of Australia: ElectronicallyTelegraphicallyRequires reportingIdentifying cash dealer Approved by director of AUSTRAC as a cash dealer who can verify the identity of signatories to accounts, utilising the 100 points system.Penalties for failure to complyNatural personBody corporateFailure to provide informationFine up to $5000 Imprisonment up to 2 yrsFine up to $25 000Breach of currency transfer requirementsFine up to $10 000 Imprisonment up to 5 yrsFine up to $50 000Opening bank account in false nameFine up to $5000Imprisonment up to 2 yrsFine up to $25 000Contravention of ActInjunctionInjunctionImpact of the act on business and consumer tradeBusinesses wishing to open an account may find the requirements imposed by the Act time-consuming and difficult.Businesses may need to employ additional staff and give staff training to ensure compliance with the obligations imposed by the Act, which will increase the costs of operating a business.The Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cwlth) (AML/CTF Act)Objective of the AML/CTF Act: To bring Australia in line with international best practice in detecting and deterring money laundering and the financing of terrorism. It supplements the Financial Transactions Reports Act.To whom does the AML/CTF Act apply?Broadens the range of the FTR ActIncludes the financial sector, the gambling sector, bullion dealers and other professionals or businesses providing ‘designated services’‘Designated services’ include:opening an accountaccepting money on depositmaking a loansending and receiving instructions on electronic funds transfers.Obligations imposed by AML/CTF Act on providers of designated servicesExtends reporting obligations for both significant cash transactions and suspicious transactionsBroadens reporting requirements beyond just cash to include e-currency and bearer negotiable instrumentsObliges providers to use risk assessment approach to monitoring transactionsIntroduces legally binding documented compliance programs:Part A (General)Part B (Customer Identification)Civil penalties for breach of AML/CTF ActBody Corporate—maximum $11 millionAll other cases—maximum $2.2 millionAUSTRAC’s role under the AML/CTF ActAUSTRAC:has expanded its role to include the administration of the AML/CTF Acthas supervisory, monitoring and enforcement functionsseeks to educate relevant industries to facilitate compliance and co-operation with the Act.