What AUSTRAC expects?

AUSTRAC will be expecting you to report that your AML / CTF program was in operation last year and that you have taken at least some tangible steps towards meeting the ongoing customer due diligence and special reporting obligations which commenced on 12 December 2008.

Mindful of the fact that the 15 month “non prosecution period” for compliance with Part A of the legislation expired last year, they will be looking to identify reporting entities less than fully committed to maintaining a stringent AML / CTF regime through 2009 and beyond.

Independent review

You may recall that the legislation calls for you to arrange for an “independent review” of your AML / CTF program. We suggest that you see this review as an opportunity to obtain expert third party comfort that your AML / CTF policies and procedures are being consistently applied on a day-to-day basis in areas such as:

• AML / CTF risk assessment (including risks associated with operations in other jurisdictions)
• Know Your Customer (KYC) policies and procedures (including record keeping arrangements)
• Employee due diligence
• Ongoing customer due diligence
• Suspicious matter reporting

Although the legislation does not clearly define “independent”, it is reasonable to assume that AUSTRAC will have greater confidence in organisations which interpret this strictly to refer to third parties other than those who assisted in designing the program. While a “generous interpretation” of the term may have been a sound option during the non-prosecution period, it is perhaps less than prudent now that Part B of the legislation has taken effect.

If you are interested in a fully independent AML / CTF “Health Check” as we move out of the transitional period may I suggest that you take advantage of the skill and experience available in our Risk Management Division, Moore Stephens has developed an outstanding reputation for its commitment to quality service to mid tier organisations. This is reflected in our continuing authorship of the Company Directors’ Handbook, the standard text used by the Australian Institute of Company Directors, as well as in the rapid growth of our portfolio of clients in the non-bank financial services sector over recent years

If you, or your designated AML / CTF compliance officer have any queries about the day to day operation of Parts A or B of your AML / CTF program, please contact Alan Fotheringham, Associate Director, on telephone (03) 8635 1865 or email afotheringham@moorestephens.com.au.