26FReporting entities must develop and maintain AML/CTF policies

26F Reporting entities must develop and maintain AML/CTF policies

(1) A reporting entity must develop and maintain policies, procedures, systems and controls (AML/CTF policies) that: (a) appropriately manage and mitigate the risks of money laundering, financing of terrorism and proliferation financing that the reporting entity may reasonably face in providing its designated services; and (b) ensure the reporting entity complies with the obligations imposed by this Act, the regulations and the AML/CTF Rules on the reporting entity; and (c) are appropriate to the nature, size and complexity of the reporting entity’s business; and (d) comply with any requirements specified in the AML/CTF Rules.

Note: See also section 26U (business of a lead entity of a reporting group).

Additional obligations that apply to reporting entities that provide designated services at or through permanent establishments in Australia (2) Subsections (3) and (4) apply if the reporting entity provides a designated service at or through a permanent establishment of the reporting entity in Australia. (3) Without limiting paragraph (1)(a), the AML/CTF policies of a reporting entity must deal with the following: (a) identifying significant changes to any of the matters mentioned in subsection 26C(3); (b) carrying out customer due diligence in accordance with Part 2; (c) reviewing and updating the AML/CTF policies in the following circumstances: (i) in response to a review of the reporting entity’s ML/TF risk assessment under section 26D; (ii) circumstances specified in the AML/CTF Rules; (d) reviewing the AML/CTF policies of the reporting entity at the intervals or with the frequency specified in the AML/CTF Rules (and in any event at least once every 3 years); (e) any other matters specified in the AML/CTF Rules. (4) Without limiting paragraph (1)(b), the AML/CTF policies of a reporting entity must deal with the following: (a) if the reporting entity is not an individual—ensuring its governing body is sufficiently informed of the risks of money laundering, financing of terrorism and proliferation financing that the reporting entity may reasonably face in providing its designated services; (b) designating an AML/CTF compliance officer for the reporting entity; (c) designating one or more senior managers of the reporting entity as responsible for approving: (i) the AML/CTF policies of the reporting entity; and (ii) the ML/TF risk assessment of the reporting entity; (d) undertaking due diligence in relation to persons who are, or will be, employed or otherwise engaged by the reporting entity and who perform, or will perform, functions relevant to the reporting entity’s obligations under this Act; (e) providing training to persons who are employed or otherwise engaged by the reporting entity and who perform, or will perform, functions relevant to the reporting entity’s obligations under this Act in relation to: (i) the risk of money laundering, financing of terrorism and proliferation financing that the reporting entity may reasonably face in providing its designated services; and (ii) the obligations imposed by this Act, the regulations and the AML/CTF Rules on the reporting entity; (f) the conduct of independent evaluations of the reporting entity’s AML/CTF program, including the frequency with which such evaluations must be conducted, which must: (i) be appropriate to the nature, size and complexity of the reporting entity’s business; and (ii) be at least once every 3 years; (g) any other matters specified in the AML/CTF Rules.