The AML/CTF Act provides the means to help detect and deter money laundering and terrorism financing. It also provides financial intelligence to revenue and law enforcement agencies. Businesses must meet minimum obligations and assess the risks of potential money laundering or terrorism financing when providing a designated service to a customer.
The Attorney’s General’s Department and the Australian Transaction Reports and Analysis Centre (AUSTRAC), in consultation with industry, has been given the task of developing options for regulating lawyers, conveyancers, accountants, high-value dealers (HVDs), real estate agents and trust and company service providers. A consultation paper which can be accessed here has been released to obtain feedback about options.
HVDs are businesses involved in the buying and the selling of high-value goods commonly considered to include jewellery, antiques, collectibles, fine art, yachts and luxury motor vehicles which are subject to the luxury car tax (LCT) requiring identification of purchaser, reporting and remittance to the Australian Taxation Office. Other high-value goods are not subject to a luxury tax.
Money laundering (ML) enables criminals to disguise and enjoy the benefits of their illegal profits. Terrorist financing (TF) provides the resources to provide terrorist attacks on Australian soil or support overseas activities. The most significant ML/TF risks arise when high-value goods are purchased using large sums of cash.
Many motor vehicle dealers are already enrolled with AUSTRAC whose financial intelligence is an integral element in the detection and investigation of serious and organised crime, ML/TF and tax evasion. Australian franchised dealers already comply with a wide range of federal, state and local regulations all of which takes time and adds to the costs of doing business. Most franchised dealers prefer not to deal with cash.
Dealers would bear the initial costs associated with establishing and implementing AML/TF systems and controls, and the ongoing costs to maintain those systems and controls including:
- enrol with AUSTRAC
- register with AUSTRAC if the reporting entity provides a remittance service
- conduct customer due diligence (CDD)
- implement ongoing customer due diligence procedures (OCDD)
- implement and maintain an AML/CTF compliance program
- lodge transaction and suspicious matter reports
- comply with various AML/CTF related record-keeping obligations.
Record keeping obligations generally include records about:
- electronic funds transfers
- customer identification procedures
- AML/CTF programs
- due diligence assessments of correspondent banking relationships.
There are a number of measures that could be adopted to mitigate the regulatory impact of any AML/TF framework including:
- non-acceptance of cash
- risk based approach
- staggered implementation.
The costs of regulatory compliance with the AML/CTF Act could add significant costs to dealership operations and AADA on your behalf will be lodging a submission to the Financial Crime Section of the Attorney General’s Department on the due date of 31 January 2017.
For more information, contact:
David Blackhall CEO
M: +61 413 007 833
Terry Keating Chairman
M: +61 418 668 277
Michael Deed Policy Director
M: +61 417 742 956