Anti-Money Laundering and Counter-Terrorism Financing and Other Legislation Amendment Act 2020 (Cth)

Anti‑Money Laundering and Counter‑Terrorism Financing and Other Legislation Amendment Act 2020 No. 133, 2020 An Act to amend the law relating to the combatting of money laundering and financing of terrorism and to the Australian Federal Police, and for related purposes Contents 1 Short title 2 Commencement 3 Schedules Schedule 1—Amendments Part 1—Identification procedures Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006 Part 2—Correspondent banking Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006 Part 3—Tipping‑off offence Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006 Part 4—Secrecy and access Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006 Inspector‑General of Intelligence and Security Act 1986 Part 5—Reports about cross‑border movements of monetary instruments Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006 Proceeds of Crime Act 2002 Surveillance Devices Act 2004 Part 6—Money laundering offences in the Criminal Code Criminal Code Act 1995 Part 7—Dishonestly representing conferral of police awards Australian Federal Police Act 1979 Anti-Money Laundering and Counter-Terrorism Financing and Other Legislation Amendment Act 2020 No. 133, 2020 An Act to amend the law relating to the combatting of money laundering and financing of terrorism and to the Australian Federal Police, and for related purposes [Assented to 17 December 2020] The Parliament of Australia enacts: 1 Short title This Act is the Anti‑Money Laundering and Counter‑Terrorism Financing and Other Legislation Amendment Act 2020. 2 Commencement (1) Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms. Commencement information Column 1 Column 2 Column 3 Provisions Commencement Date/Details 1. Sections 1 to 3 and anything in this Act not elsewhere covered by this table The day this Act receives the Royal Assent. 17 December 2020 2. Schedule 1, Parts 1 to 4 A day or days to be fixed by Proclamation. 17 June 2021 However, if any of the provisions do not commence within the period of 6 months beginning on the day this Act receives the Royal Assent, they commence on the day after the end of that period. 3. Schedule 1, Part 5 A single day to be fixed by Proclamation. 17 June 2022 However, if the provisions do not commence within the period of 18 months beginning on the day this Act receives the Royal Assent, they commence on the day after the end of that period. 4. Schedule 1, Parts 6 and 7 The day after this Act receives the Royal Assent. 18 December 2020 Note: This table relates only to the provisions of this Act as originally enacted. It will not be amended to deal with any later amendments of this Act. (2) Any information in column 3 of the table is not part of this Act. Information may be inserted in this column, or information in it may be edited, in any published version of this Act. 3 Schedules Legislation that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms. Schedule 1—Amendments Part 1—Identification procedures Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006 1 Section 32 Repeal the section, substitute: 32 Carrying out applicable customer identification procedure before commencement of provision of designated service (1) A reporting entity must not commence to provide a designated service to a customer unless the reporting entity has carried out the applicable customer identification procedure in respect of the customer. Note 1: See the definition of commence to provide a designated service in section 5. Note 2: See sections 37A and 38 (when applicable customer identification procedure taken to be carried out by a reporting entity). Note 3: See section 41 for reports of suspicious matters when a reporting entity proposes to provide a designated service to a customer. Exceptions (2) Subsection (1) does not apply if: (a) there are special circumstances that justify carrying out the applicable customer identification procedure in respect of the customer after the commencement of the provision of the designated service (see section 33); or (b) the reporting entity has previously carried out the applicable customer identification procedure in respect of the customer; or (c) section 28 or 30 applies to the provision of the designated service. Civil penalty (3) Subsection (1) is a civil penalty provision. 2 Subsection 34(1) (note 2) Omit "section 38", substitute "sections 37A and 38". 3 Subsection 35(1) (note) Omit "section 38", substitute "sections 37A and 38". 4 At the end of subsection 37(1) Add: Note: The reporting entity (and not its agent) will be liable to civil penalties for contraventions of this Part for providing designated services to its customers without carrying out the applicable customer identification procedures in respect of its customers. 5 After section 37 Insert: 37A Reliance on applicable customer identification procedures or other procedures—agreements or arrangements (1) This section applies if: (a) a reporting entity (the first entity) enters into a written agreement or arrangement with another person relating to the first entity's reliance on applicable customer identification procedures, or other procedures of a kind prescribed by the AML/CTF Rules, carried out by the other person; and (b) at the time of entering into the agreement or arrangement, the first entity had reasonable grounds to believe that each of the requirements prescribed by the AML/CTF Rules were met. (2) If: (a) the agreement or arrangement is in force; and (b) the first entity has complied with section 37B in relation to the agreement or arrangement; and (c) the first entity is providing, or proposes to provide, a designated service to a customer; and (d) under the agreement or arrangement, the first entity has obtained information about the identity of that customer from the other party to the agreement or arrangement; and (e) the requirements prescribed by the AML/CTF Rules are satisfied; this Act (other than Part 10) has effect as if the first entity had carried out the applicable customer identification procedure in respect of that customer and that designated service. (3) If: (a) the agreement or arrangement is in force; and (b) after completing an assessment under section 37B in relation to the agreement or arrangement, the first entity does not have reasonable grounds to believe that each of the requirements prescribed by the AML/CTF Rules for the purposes of paragraph (1)(b) is being met; then subsection (2) does not apply in relation to the first entity and the agreement or arrangement in connection with the carrying out of procedures covered by paragraph (1)(a) after the completion of that assessment. (4) Subsection (3) ceases to apply once the first entity has reasonable grounds to believe that each of the requirements prescribed by the AML/CTF Rules for the purposes of paragraph (1)(b) is being met. 37B Regular assessments of agreement or arrangement covered by section 37A (1) If a reporting entity enters into an agreement or arrangement of a kind referred to in subsection 37A(1), then, while the agreement or arrangement is in force, the reporting entity must: (a) carry out assessments in accordance with the AML/CTF Rules; and (b) carry out those assessments at the times worked out in accordance with the AML/CTF Rules; and (c) prepare a written record of each assessment within 10 business days after the day of completing the assessment. Civil penalty (2) Subsection (1) is a civil penalty provision. 6 Section 38 Repeal the section, substitute: 38 Reliance on applicable customer identification procedures or other procedures—other circumstances If: (a) a reporting entity (the first entity) is providing, or proposes to provide, a designated service to a customer; and (b) another person has carried out an applicable customer identification procedure, or another procedure of a kind prescribed by the AML/CTF Rules, in respect of that customer; and (c) the first entity has obtained, from the other person, information about the identity of that customer that was obtained by the other person in the course of carrying out that procedure; and (d) the first entity has reasonable grounds to believe that it is appropriate to rely on that procedure in relation to that designated service having regard to the risk the first entity may reasonably face that the provision of that designated service might (whether inadvertently or otherwise) involve or facilitate money laundering or financing of terrorism; and (e) the requirements prescribed by the AML/CTF Rules are satisfied; this Act (other than Part 10) has effect as if the first entity had carried out the applicable customer identification procedure in respect of that customer and that designated service. 7 Section 104 Omit: • A reporting entity must retain a record of an applicable customer identification procedure for 7 years after the end of the reporting entity's relationship with the relevant customer. substitute: • A reporting entity must retain records relating to: (a) applicable customer identification procedures it carries out or that it is taken to have carried out; and (b) assessments it carries out of agreements or arrangements it has entered into relating to its reliance on applicable customer identification procedures, or other procedures, carried out by another person. 8 Division 3 of Part 10 (heading) Repeal the heading, substitute: Division 3—Records in connection with the carrying out of identification procedures 9 Section 114 Repeal the section, substitute: 114 Retention of information if identification procedures taken to have been carried out by a reporting entity (1) If: (a) a person (the first person) carries out a procedure (the initial procedure) mentioned in paragraph 37A(1)(a) or 38(b); and (b) under section 37A or 38 and in connection with the initial procedure, Part 2 has effect as if a reporting entity had carried out an applicable customer identification procedure in respect of a customer; and (c) the first person makes a record of the initial procedure and gives a copy of the record to the reporting entity; the reporting entity must retain the copy until the end of the first 7‑year period: (d) that began at a time after Part 2 had that effect; and (e) throughout the whole of which the reporting entity did not provide any designated services to the customer. Civil penalty (2) Subsection (1) is a civil penalty provision. 114A Retention of records of assessments of agreements or arrangements covered by section 37A (1) If a reporting entity prepares a record under paragraph 37B(1)(c), the reporting entity must retain the record, or a copy of the record, for 7 years after the completion of the preparation of the record. Civil penalty (2) Subsection (1) is a civil penalty provision. 10 Application and saving provisions (1) The repeal and substitution of section 32 of the Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006 made by this Part applies in relation to a designated service that commences to be provided on or after the commencement of this item. (2) Section 37A of the Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006, as inserted by this Part, applies in relation to an agreement or arrangement entered into on or after the commencement of this item. (3) Section 38 of the Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006, as substituted by this Part, applies in relation to a designated service referred to in paragraph 38(a) of that Act that is provided on or after the commencement of this item (whether the procedure referred to in paragraph 38(b) of that Act was carried out before, on or after that commencement). (4) Section 38 of the Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006, as in force immediately before the commencement of this item, continues to apply on and after that commencement in relation to a designated service referred to in paragraph 38(c) of that Act (as so in force) that was provided before that commencement. (5) Section 114 of the Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006, as in force immediately before the commencement of this item, continues to apply on and after that commencement in relation to applications of subsection 114(1) of that Act before that commencement. Part 2—Correspondent banking Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006 11 Sections 94 to 99 Repeal the sections, substitute: 94 Simplified outline of this Part • A financial institution must not enter into a correspondent banking relationship with: (a) a shell bank; or (b) another financial institution that has a correspondent banking relationship with a shell bank; or (c) another financial institution that permits its accounts to be used by a shell bank. • A financial institution must carry out due diligence assessments before it enters into, and while it is in, a correspondent banking relationship with another financial institution involving a vostro account. 95 Prohibitions on correspondent banking relationships involving shell banks Entry (1) A financial institution must not enter into a correspondent banking relationship with another person if: (a) the other person is a shell bank; or (b) the other person is a financial institution that has a correspondent banking relationship with a shell bank; or (c) the other person is a financial institution that permits its accounts to be used by a shell bank. Note: For geographical links, see section 100. Termination (2) If a financial institution (the first institution) is in a correspondent banking relationship with another person and the first institution becomes aware that: (a) the other person is a shell bank; or (b) the other person is a financial institution that has a correspondent banking relationship with a shell bank; or (c) the other person is a financial institution that permits its accounts to be used by a shell bank; the first institution must, within 20 days after becoming so aware or such longer period (if any) as the AUSTRAC CEO allows, do one of the following: (d) terminate the correspondent banking relationship; (e) if paragraph (b) applies—request the other financial institution to terminate the correspondent banking relationship mentioned in that paragraph. Note: For geographical links, see section 100. (3) If: (a) the first institution makes a request under paragraph (2)(e) of another financial institution; and (b) at the end of the period (the first period) of 20 business days after the request was made, the other financial institution has not complied with the request; the first institution must terminate its correspondent banking relationship with the other financial institution within 20 days after the end of the first period or such longer period (if any) as the AUSTRAC CEO allows. Note: For geographical links, see section 100. Civil penalty (4) Subsections (1), (2) and (3) are civil penalty provisions. 96 Due diligence assessments and records of correspondent banking relationships Entry (1) A financial institution (the first institution) must not enter into a correspondent banking relationship with another financial institution that will involve a vostro account unless: (a) the first institution carries out a due diligence assessment in accordance with the AML/CTF Rules and prepares a written record of the assessment; and (b) a senior officer of the first institution approves the entering into of that relationship, having regard to such matters (if any) as are specified in the AML/CTF Rules. Note: For geographical links, see section 100. (2) If a financial institution (the first institution) enters into a correspondent banking relationship with another financial institution that involves a vostro account, the first institution must, within 20 business days after the day of entering into the relationship, prepare a written record that sets out: (a) its responsibilities under that relationship; and (b) the responsibilities of the other financial institution under that relationship. Ongoing assessments (3) If a financial institution (the first institution) is in a correspondent banking relationship with another financial institution that involves a vostro account, the first institution must: (a) carry out due diligence assessments in accordance with the AML/CTF Rules; and (b) carry out those assessments at the times worked out in accordance with the AML/CTF Rules; and (c) in relation to each assessment, prepare a written record of the assessment within 10 business days after the day of completing the assessment; and (d) in relation to each assessment, ensure that, within 20 business days after the preparation of the written record, a senior officer of the first institution reviews the written record and makes a decision about whether the first institution should remain in a correspondent banking relationship with the other financial institution. Note: For geographical links, see section 100. Civil penalty (4) Subsections (1), (2) and (3) are civil penalty provisions. 12 Division 6 of Part 10 (heading) Repeal the heading, substitute: Division 6—Records about correspondent banking relationships 13 Section 117 (heading) Repeal the heading, substitute: 117 Retention of records about correspondent banking relationships 14 Subsection 117(1) Omit "subsection 97(2) or 98(2)", substitute "section 96". 15 Paragraph 1(5)(a) of Schedule 1 Omit ", 96 or 99". 16 Paragraph 1(5)(b) of Schedule 1 Omit "96, 97 or 98", substitute "95 or 96". 17 Application provisions (1) Subsection 95(1) of the Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006, as substituted by this Part, applies in relation to a correspondent banking relationship first mentioned in that subsection that is entered into on or after the commencement of this item. (2) Subsection 95(2) of the Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006, as substituted by this Part, applies on and after the commencement of this item in relation to a correspondent banking relationship first mentioned in that subsection that was entered into before, on or after that commencement, where the first institution becomes aware as mentioned in that subsection on or after that commencement. (3) Subsections 96(1) and (2) of the Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006, as substituted by this Part, apply in relation to a correspondent banking relationship that is entered into on or after the commencement of this item. (4) Subsection 96(3) of the Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006, as substituted by this Part, applies on and after the commencement of this item in relation to a correspondent banking relationship that was entered into before, on or after that commencement, where the assessments are required to be carried out on or after that commencement. 18 Saving provisions (1) Section 95 of the Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006, as in force immediately before the commencement of this item, continues to apply on and after that commencement in relation to a correspondent banking relationship first mentioned in that section that was entered into before that commencement. (2) Section 96 of the Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006, as in force immediately before the commencement of this item, continues to apply on and after that commencement in relation to a correspondent banking relationship first mentioned in that section that was entered into before that commencement, where the first financial institution became aware as mentioned in that section before that commencement. (3) Section 97 of the Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006, as in force immediately before the commencement of this item, continues to apply on and after that commencement in relation to a correspondent banking relationship that was entered into before that commencement. (4) Section 98 of the Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006, as in force immediately before the commencement of this item, continues to apply on and after that commencement in relation to a correspondent banking relationship that was entered into before that commencement, where the assessments were required to be carried out before that commencement. (5) Section 99 of the Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006, as in force immediately before the commencement of this item, continues to apply on and after that commencement in relation to a correspondent banking relationship that was entered into before that commencement. (6) Section 117 of the Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006, as in force immediately before the commencement of this item, continues to apply on and after that commencement in relation to a record prepared under subsection 97(2) or 98(2) of that Act before that commencement. Part 3—Tipping‑off offence Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006 19 Subsections 123(1), (2) and (3) Repeal the subsections, substitute: Prohibitions (1) A reporting entity must not disclose to a person other than an AUSTRAC entrusted person: (a) that the reporting entity has given, or is required to give, a report under subsection 41(2); or (b) any information from which it could reasonably be inferred that the reporting entity has given, or is required to give, that report. (2) If: (a) a reporting entity gives a report to the AUSTRAC CEO under section 41, 43 or 45; and (b) in connection with that report, the reporting entity (the recipient) or another person (also the recipient) is required by a notice under subsection 49(1) to give information or produce a document; the recipient must not disclose to a person (except an AUSTRAC entrusted person, the person who gave the notice or any other person who has given a notice to the recipient under subsection 49(1) in connection with that report): (c) that the recipient is or has been required by a notice under subsection 49(1) to give information or produce a document; or (d) that the information has been given or the document has been produced; or (e) any information from which it could reasonably be inferred that: (i) the recipient had been required under subsection 49(1) to give information or produce a document; or (ii) the information had been given under subsection 49(1); or (iii) the document had been produced under subsection 49(1). 20 Subsection 123(4) (heading) Repeal the heading, substitute: Exception—crime prevention 21 Subsection 123(4) Omit "Subsection (2)", substitute "Subsection (1)". 22 Before subsection 123(5) Insert: Exception—legal advice 23 Subsection 123(5) Omit "Subsection (2)", substitute "Subsection (1)". 24 After subsection 123(5A) Insert: Exception—audit or review of anti‑money laundering and counter‑terrorism financing program (5B) Subsection (1) does not apply to the disclosure of information by a reporting entity if the disclosure is to a person appointed or engaged by the reporting entity to audit or review the reporting entity's anti‑money laundering and counter‑terrorism financing program. Note: A defendant bears an evidential burden in relation to the matter in subsection (5B) (see subsection 13.3(3) of the Criminal Code). (5C) A person to whom information has been disclosed under subsection (5B) must not disclose the information unless the disclosure is made to another person in connection with the audit or review of the reporting entity's anti‑money laundering and counter‑terrorism financing program. Exception—Charter of the United Nations Act 1945 25 Subsection 123(6) Omit "Subsection (2)", substitute "Subsection (1)". 26 Subsections 123(7) and (7AA) Repeal the subsections, substitute: Exception—members of a corporate group (7) Subsection (1) does not apply to the disclosure of information by a reporting entity (the first entity) if: (a) the first entity belongs to a corporate group; and (b) the information relates to the affairs of a person (the relevant person) who is, or was, a customer of the first entity or who made inquiries referred to in subparagraph 41(1)(c)(i) of the first entity; and (c) the disclosure is made to a body corporate (the related body corporate) that belongs to the corporate group; and (d) the related body corporate is a reporting entity or is regulated by one or more laws of a foreign country that give effect to some or all of the FATF Recommendations; and (e) if the related body corporate is regulated by one or more laws of a foreign country that give effect to some or all of the FATF Recommendations—the related body corporate has given the first entity a written undertaking for: (i) protecting the confidentiality of information that may be disclosed to the related body corporate under this subsection; and (ii) controlling the use that will be made of the information; and (iii) ensuring that the information will be used only for the purpose for which it is disclosed to the related body corporate; and (f) the disclosure is made for the purpose of informing the related body corporate about the risks involved in dealing with the relevant person. Note: A defendant bears an evidential burden in relation to the matter in subsection (7) (see subsection 13.3(3) of the Criminal Code). (7AA) A reporting entity to whom information has been disclosed under subsection (7) must not disclose the information unless: (a) the disclosure is made to another reporting entity that belongs to the corporate group; and (b) the disclosure is made for the purpose of informing the other reporting entity about the risks involved in dealing with the relevant person. Exception—members of a designated business group (7AB) Subsection (1) does not apply to the disclosure of information by a reporting entity (the first entity) if: (a) the first entity belongs to a designated business group; and (b) the information relates to the affairs of a person (the relevant person) who is, or was, a customer of the first entity or who made inquiries referred to in subparagraph 41(1)(c)(i) of the first entity; and (c) the disclosure is made to another person (the related person) that belongs to the designated business group; and (d) the related person is a reporting entity or is regulated by one or more laws of a foreign country that give effect to some or all of the FATF Recommendations; and (e) if the related person is regulated by one or more laws of a foreign country that give effect to some or all of the FATF Recommendations—the related person has given the first entity a written undertaking for: (i) protecting the confidentiality of information that may be disclosed to the related person under this subsection; and (ii) controlling the use that will be made of the information; and (iii) ensuring that the information will be used only for the purpose for which it is disclosed to the related person; and (f) the disclosure is made for the purpose of informing the related person about the risks involved in dealing with the relevant person. Note: A defendant bears an evidential burden in relation to the matter in subsection (7AB) (see subsection 13.3(3) of the Criminal Code). (7AC) A reporting entity to whom information has been disclosed under subsection (7AB) must not disclose the information unless: (a) the disclosure is made to another reporting entity that belongs to the designated business group; and (b) the disclosure is made for the purpose of informing the other reporting entity about the risks involved in dealing with the relevant person. Exception—remittance sector 27 Subsection 123(7A) Omit "Subsection (2)", substitute "Subsection (1)". 28 Before subsection 123(8) Insert: Exception—ADI 29 Subsection 123(8) Omit "Subsection (2)", substitute "Subsection (1)". 30 Before subsection 123(9) Insert: Exception—compliance with the law or law enforcement 31 Subsection 123(9) Omit "Subsection (2)", substitute "Subsection (1)". 32 Before subsection 123(10) Insert: Courts or tribunals 33 Subsection 123(10) Omit ", (2) or (3)", substitute "or (2)". 34 Paragraph 123(11)(a) Omit "(3),". 35 Paragraph 123(11)(a) After "(5A),", insert "(5C),". 36 Paragraph 123(11)(a) After "(7AA),", insert "(7AC),". 37 Application provision The amendments of section 123 of the Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006 made by this Part apply in relation to the disclosure of information on or after the commencement of this item, whether the information was obtained before, on or after that commencement. Part 4—Secrecy and access Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006 38 Section 5 Repeal the following definitions: (a) definition of ASD Minister; (b) definition of ASD official; (c) definition of ASIO Minister; (d) definition of ASIO official; (e) definition of ASIS Minister; (f) definition of ASIS official. 39 Section 5 Insert: AUSTRAC entrusted person means: (a) the AUSTRAC CEO; or (b) a member of the staff of AUSTRAC; or (c) a person engaged as a consultant under subsection 225(1); or (d) a person whose services are made available to the AUSTRAC CEO under subsection 225(3); or (e) a member of a task force established by the AUSTRAC CEO under paragraph 212(1)(db); or (f) the Director of AUSTRAC; or (g) a person engaged as a consultant under repealed section 40A of the Financial Transaction Reports Act 1988. Note: The former office of Director of AUSTRAC was established under the Financial Transaction Reports Act 1988. 40 Section 5 (definition of AUSTRAC information) Repeal the definition, substitute: AUSTRAC information means the following: (a) information obtained by, or generated by, an AUSTRAC entrusted person under or for the purposes of this Act; (b) information obtained by an AUSTRAC entrusted person under or for the purposes of any other law of the Commonwealth or a law of a State or a Territory; (c) information obtained by an AUSTRAC entrusted person from a government body; (d) FTR information (within the meaning of the Financial Transaction Reports Act 1988). 41 Section 5 Insert: Commonwealth, State or Territory agency means any of the following: (a) an agency, authority, body or organisation of the Commonwealth, a State or a Territory that has functions in relation to, or that is responsible for or deals with, law enforcement or investigation of corruption; (b) an agency, authority, body or organisation of the Commonwealth, a State or a Territory that has functions in relation to, or that is responsible for or deals with, criminal intelligence, security intelligence, foreign