AUSTRAC has opened a consultation on proposed changes to its anti-money laundering (AML) and counter-terrorism financing (CTF) rules as it seeks to strengthen its approach.
The draft rule amendments published this week support reforms made to legislation in December.
Changes are proposed in a number of areas. The regulator is proposing to toughen rules on correspondent banking, bringing in clearer prohibitions against entering into a relationship with a bank that allows its accounts to be used by a shell bank and bringing in “clearer and strengthened” due diligence and risk assessment requirements during a correspondent banking relationship.
AUSTRAC is also seeking to ensure clarity on due diligence rules, making it clear that customers must be identified before providing a designated service. The changes would expand the circumstances in which banks can rely on customer identification from another reporting entity.
The regulator also wants to allow information from Suspicious Matter Reports (SMRs) to more easily be shared with external auditors, or offshore members of the same corporate groups. It is proposing to expand tipping-off provision exceptions to enable this.
The reforms are part of a $A100m regulatory overhaul and tougher approach, including more enforcement action, outlined by the authority in October.
The regulator said the reforms will “increase the resilience of our financial system against criminal threats, while making it easier for businesses to understand and comply with their obligations.”
The consultation period runs until 11 March.