1st November, 2018 · Finance & Insurance Policy

Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF)

AADA Position

AADA urges the Government not to impose a full AML/CTF regime on the motor vehicle retailing industry and that its AML/CTF objectives could be achieved through the recently announced prohibition on cash transactions exceeding $10,000.

Background

The Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF) provides the legislative framework under which businesses known as ‘reporting entities’ are regulated for AML/CTF purposes. These businesses are supervised for compliance with their AML/CTF obligations by the Australian Transaction Reports and Analysis Centre AUSTRAC. Obligations under the AML/CTF regime include registration with AUSTRAC, customer due diligence, implementation of ongoing customer due diligence procedures, implementation and maintenance of an AML/CTF program, lodgement of transaction reports and record keeping.

High-value Dealers include motor vehicle Dealers, jewellers, antique and fine art Dealers, boat Dealers, builders, bathroom and kitchen suppliers, and auctioneers and brokers. Regulation of HVDs that accept large sums of cash would potentially impose a significant regulatory burden on thousands of HVDs conducting business in Australia. These businesses and Dealers would need to bear the initial costs associated with establishing and implementing AML/CTF systems and controls, and the ongoing associated costs.

The AADA considers that the Government’s AML/CTF objectives with respect to motor vehicle Dealers can be most efficiently achieved through the already-announced prohibition on cash transactions exceeding $10,000.

The cash transaction limit was announced in the 2018-19 Federal Budget. From July 1, 2019, cash payments of more than $10,000 made to businesses for goods and services will be banned as part of the government crackdown on the “black economy”. Under the measure, transactions over the threshold will have to be made through electronic transfer or by cheque, but transactions with financial institutions or between individuals will not be affected.