Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024

Division 1—Amendment of the Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006

Division 2—Amendments of other Acts

Australian Securities and Investments Commission Act 2001

Criminal Code Act 1995

Surveillance Devices Act 2004

Part 3—Transitional provisions

Schedule 12—Transitional rules

Commonwealth Coat of Arms of Australia

Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024

No. 110, 2024

An Act to amend the Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006 and repeal the Financial Transaction Reports Act 1988, and for related purposes

[Assented to 10 December 2024]

The Parliament of Australia enacts:

1  Short title

  This Act is the Anti‑Money Laundering and Counter‑Terrorism Financing Amendment Act 2024.

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. 10 December 2024
• 2. Schedules 1, 2 and 3 31 March 2026. 31 March 2026
• 3. Schedule 4 1 July 2026. 1 July 2026
• 3A. Schedule 5, item 1 31 March 2026. 31 March 2026
• 3B. Schedule 5, item 2 31 March 2025. 31 March 2025
• 4. Schedule 5, Part 1, Division 2 31 March 2026. 31 March 2026
• 5. Schedule 5, Part 2 The later of:(a) the commencement of the provisions covered by table item 3B; and(b) immediately after the commencement of item 94 of Schedule 1 to the Intelligence Services Legislation Amendment Act 2024.However, the provisions do not commence at all if the event mentioned in paragraph (b) does not occur.
• 6. Schedule 6, Part 1 31 March 2026. 31 March 2026
• 7. Schedule 6, Part 2 The later of:(a) the commencement of the provisions covered by table item 6; and(b) immediately after the commencement of Schedule 2 to the Crimes and Other Legislation Amendment (Omnibus No. 1) Act 2024.However, the provisions do not commence at all if the event mentioned in paragraph (b) does not occur. 31 March 2026(paragraph (a) applies)
• 8. Schedule 7 1 July 2026. 1 July 2026
• 9. Schedule 8 31 March 2026. 31 March 2026
• 10. Schedule 9, Parts 1 to 3 The 28th day after this Act receives the Royal Assent. 7 January 2025
• 11. Schedule 9, Part 4 The later of:(a) the commencement of the provisions covered by table item 10; and(b) immediately after the commencement of item 94 of Schedule 1 to the Intelligence Services Legislation Amendment Act 2024.However, the provisions do not commence at all if the provisions covered by table item 3B commence before the event mentioned in paragraph (b) occurs.
• 12. Schedule 10 31 March 2026. 31 March 2026
• 13. Schedules 11 and 12 The 28th day after this Act receives the Royal Assent. 7 January 2025

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—AML/CTF programs and business groups

1  Section 4

• A reporting entity is a financial institution, or other person, who provides designated services. (Designated services are listed in section 6.)

• A reporting entity is a person who provides designated services. (Designated services are listed in section 6.). Lead entities of certain business groups (known as reporting groups) are also reporting entities.

• A reporting entity must have and comply with an AML/CTF program.

• Reporting entities must have and comply with anti‑money laundering and counter‑terrorism financing programs.

3  Section 5

AML/CTF compliance officer for a reporting entity means the individual designated as the AML/CTF compliance officer for the reporting entity under subsection 26J(1).

AML/CTF policies of a reporting entity:

 (a) means the policies, procedures, systems and controls of the reporting entity developed under section 26F; and

 (b) if the policies, procedures, systems and controls of the reporting entity are updated—includes the policies, procedures, systems and controls as updated.

AML/CTF program: see section 26B.

4  Section 5 (definition of anti‑money laundering and counter‑terrorism financing program)

5  Section 5

business group: see subsection 10A(3).

control has the meaning given by section 11.

6  Section 5 (definition of control test)

7  Section 5 (definition of designated business group)

governing body of a reporting entity means:

 (a) if the reporting entity is an individual—the individual; or

 (b) otherwise—the individual, or group of individuals, with primary responsibility for the governance and executive decisions of the reporting entity.

9  Section 5 (definition of joint anti‑money laundering and counter‑terrorism financing program)

lead entity of a reporting group: see subsection 10A(5).

member of a reporting group or a business group: see subsection 10A(4).

ML/TF risk assessment of a reporting entity:

 (a) means the risk assessment undertaken by the reporting entity under section 26C; and

 (b) if the assessment is updated under section 26D—includes the risk assessment as updated.

11  Section 5 (definition of money laundering and terrorism financing risk assessment)

12  Section 5

proliferation financing means conduct that amounts to:

 (a) an offence against the Charter of the United Nations Act 1945, or regulations made under that Act, that is prescribed by regulations made under this Act for the purposes of this paragraph; or

 (b) an offence against the Autonomous Sanctions Act 2011, or a contravention of regulations made under that Act, that involves sanctions addressing the proliferation of weapons of mass destruction; or

 (c) an offence against the Autonomous Sanctions Act 2011, or a contravention of regulations made under that Act, that is prescribed by regulations made under this Act for the purposes of this paragraph; or

 (d) the provision of assets (including funds) or financial services, or other dealing with assets, in contravention of a law of the Commonwealth that:

 (i) implements an international agreement, convention or treaty relating to the proliferation of weapons of mass destruction; and

 (ii) is prescribed by the regulations for the purposes of this paragraph; or

 (e) an offence against a law of a State or Territory that corresponds to an offence referred to in paragraph (a), (b), (c) or (d); or

 (f) an offence against a law of a foreign country or a part of a foreign country that corresponds to an offence referred to in paragraph (a), (b), (c), (d) or (e); or

 (g) an offence against a law of the Commonwealth, a State or a Territory that is prescribed by the regulations for the purposes of this paragraph.

13  Section 5 (definition of reporting entity)

reporting entity means:

 (a) a person who provides a designated service; or

 (b) the lead entity of a reporting group.

14  Section 5

reporting group: see subsection 10A(1).

senior manager of a reporting entity means an individual who makes, or participates in making, decisions that affect the whole, or a substantial part, of the business of the reporting entity.

15  Section 5 (definition of shell bank)

Omit “section 15”, substitute “section 94A”.

16  Section 5 (definition of special anti‑money laundering and counter‑terrorism financing program)

17  Section 5 (definition of standard anti‑money laundering and counter‑terrorism financing program)

18  After subsection 6(6)

Designated services provided within business groups

 (6A) Despite anything in this section, a service is not a designated service if:

 (a) any of the following apply:

 (i) a member of a business group provides the service to another member of the business group;

 (ii) the service is of a kind described in item 48 of table 1 and the guarantor and borrower are members of the same business group;

 (iii) the service is of a kind described in item 49 of table 1 and the guarantor and borrower are members of the same business group;

 (iv) the service is of a kind specified in the AML/CTF Rules; and

 (b) the service is not of a kind specified in the AML/CTF Rules; and

 (c) the requirements (if any) specified in the AML/CTF Rules are met.

Note 1: Item 48 of table 1 covers guaranteeing a loan, where the guarantee is given in the course of carrying on a business of guaranteeing loans.

Note 2: Item 49 of table 1 covers making a payment, in the capacity of guarantor of a loan, to the lender, where the guarantee was given in the course of carrying on a business of guaranteeing loans.

19  Section 11

10A  Key terms relating to reporting groups

Reporting group

 (1) A reporting group is:

 (a) a business group, where:

 (i) at least one person in the group provides a designated service; and

 (ii) each member of the group satisfies such conditions (if any) as are specified in the AML/CTF Rules; and

 (iii) the group is not of a kind that, under the AML/CTF Rules, is ineligible to be a reporting group to which this paragraph applies; and

 (iv) the conditions (if any) relating to changes in membership, dissolution, administration or operation of the group that are specified in the AML/CTF Rules are satisfied; or

 (b) a group of 2 or more persons, where:

 (i) each member of the group has elected, in writing, to be a member of the group, and the election is in force; and

 (ii) each election was made in accordance with the AML/CTF Rules; and

 (iii) no member of the group is a member of another group to which this paragraph applies; and

 (iv) each member of the group satisfies such conditions (if any) as are specified in the AML/CTF Rules; and

 (v) the group is not of a kind that, under the AML/CTF Rules, is ineligible to be a reporting group; and

 (vi) the conditions (if any) relating to changes in membership, dissolution, administration or operation of the group that are specified in the AML/CTF Rules are satisfied.

 (1A) Subject to subsection (2A), a person may be a member of a group to which paragraph (1)(b) applies even if the person is a member of a group to which paragraph (1)(a) applies.

 (1B) The requirement in subparagraph (1)(b)(i) to make a written election does not apply in relation to a member of a group in the circumstances specified in the AML/CTF Rules.

 (2) Subparagraph (1)(b)(iii) does not apply in the circumstances specified in the AML/CTF Rules.

 (2A) If a person is a member of more than one reporting group, the AML/CTF Rules may specify circumstances in which that person is taken, for the purposes of this Act, to be a member of only one of those reporting groups.

Business groups

 (3) A business group is a group of 2 or more persons, where either of the following paragraphs applies:

 (a) one person in the group controls each other person in the group;

 (b) the group meets the requirements (if any) specified in the AML/CTF Rules.

Members of reporting groups and business groups

 (4) Each person in a reporting group or a business group is a member of that group.

Lead entity of a reporting group

 (5) The lead entity of a reporting group means the person in the group that is specified in the AML/CTF Rules as the lead entity for the reporting group.

Note: The lead entity of a reporting group is a reporting entity, see the definition of reporting entity in section 5.

11  Meaning of control

 (1) Control, of a body corporate, is:

 (a) having the capacity to cast, or control the casting of, more than one half of the maximum number of votes that might be cast at a general meeting of the body corporate; or

 (b) directly or indirectly holding more than one half of the issued share capital of the body corporate (not including any part of the issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital, and not including mutual capital instruments within the meaning of section 167AD of the Corporations Act 2001); or

 (c) having the capacity to control the composition of the body corporate’s board or governing body; or

 (d) having the capacity to determine the outcome of decisions about the body corporate’s financial and operating policies, taking into account:

 (i) the practical influence that can be exerted (rather than the rights that can be enforced); and

 (ii) any practice or pattern of behaviour affecting the body corporate’s financial or operating policies (whether or not it involves a breach of an agreement or a breach of trust).

 (2) Control, of a person other than a body corporate, is:

 (a) having the capacity to control the composition of the person’s board or governing body (if any); or

 (b) having the capacity to determine the outcome of decisions about the person’s financial and operating policies, taking into account:

 (i) the practical influence that can be exerted (rather than the rights that can be enforced); and

 (ii) any practice or pattern of behaviour affecting the person’s financial or operating policies (whether or not it involves a breach of an agreement or a breach of trust).

20  Subparagraph 14(2)(b)(i)

Omit “passes the control test in relation to”, substitute “controls”.

21  Subparagraph 14(3)(b)(i)

Omit “passes the control test in relation to”, substitute “controls”.

22  Section 15

23  Subsection 21(3)

Omit “regulations” (wherever occurring), substitute “AML/CTF Rules”.

24  After Part 1

Part 1A—AML/CTF programs

26A  Simplified outline

• A reporting entity must have and comply with an AML/CTF program. An AML/CTF program comprises the reporting entity’s ML/TF risk assessment and AML/CTF policies.

• The ML/TF risk assessment is an assessment of the risks of money laundering, financing of terrorism and proliferation financing that the reporting entity may reasonably face in providing its designated services.

• The AML/CTF policies must appropriately manage and mitigate those risks and ensure the reporting entity complies with this Act and instruments under this Act.

• The AML/CTF program must be appropriate to the nature, size and complexity of the reporting entity’s business. For a lead entity of a reporting group, it must be appropriate to the nature, size and complexity of the business of each reporting entity in the reporting group.

• The governing body of the reporting entity has responsibilities relating to the AML/CTF program, including relating to overseeing and ensuring the reporting entity complies with the AML/CTF policies, this Act and instruments under this Act.

• The reporting entity must have an AML/CTF compliance officer. The AML/CTF compliance officer has various functions, including to oversee and coordinate the effective operation of, and compliance with, the AML/CTF policies.

26B  What is an AML/CTF program?

  An AML/CTF program of a reporting entity comprises:

 (a) the reporting entity’s ML/TF risk assessment; and

 (b) the reporting entity’s AML/CTF policies.

Division 2—ML/TF risk assessment

26C  Reporting entities must undertake an ML/TF risk assessment

 (1) A reporting entity must undertake an assessment (an ML/TF risk assessment) that identifies and assesses the risks of money laundering, financing of terrorism and proliferation financing that the reporting entity may reasonably face in providing its designated services.

 (2) The steps taken by a reporting entity in relation to undertaking the reporting entity’s ML/TF risk assessment must be appropriate to the nature, size and complexity of the reporting entity’s business.

Additional obligations that apply to reporting entities that provide designated services at or through permanent establishments in Australia

 (3) If the reporting entity provides designated services at or through a permanent establishment of the reporting entity in Australia, the reporting entity must have regard to the following matters in undertaking an ML/TF risk assessment:

 (a) the kinds of designated services provided, or proposed to be provided, by the reporting entity, including any new or emerging technologies relating to those services;

 (b) the kinds of customers to whom the reporting entity’s designated services are or will be provided;

 (c) the delivery channels by which the reporting entity’s designated services are or will be provided, including any new or emerging technologies relating to those delivery channels;

 (d) the countries with which the reporting entity deals, or will deal, in providing its designated services;

 (e) information communicated either directly or indirectly by AUSTRAC to the reporting entity that identifies or assesses the risks associated with the reporting entity’s provision of its designated services;

 (f) the matters (if any) specified in the AML/CTF Rules.

 (4) Subsection (3) does not limit subsection (1).

26D  Reporting entities must review and update ML/TF risk assessment

Review of ML/TF risk assessment

 (1) A reporting entity must review its ML/TF risk assessment for the purpose of identifying and assessing any new or changed risks of money laundering, financing of terrorism and proliferation financing that the reporting entity may reasonably face in providing its designated services:

 (a) if any of the following occur:

 (i) there is a significant change to any of the matters mentioned in subsection 26C(3);

 (ii) AUSTRAC communicates to the reporting entity information that identifies or assesses risks associated with the reporting entity’s provision of its designated services;

 (iii) circumstances specified in the AML/CTF Rules; and

 (b) in any event—at least once every 3 years.

 (2) The review must be undertaken:

 (a) for a significant change that is within the control of the reporting entity—before the significant change occurs; or

 (b) for a significant change that is not within the control of the reporting entity—as soon as practicable after the significant change occurs; or

 (c) for information communicated for the purposes of subparagraph (1)(a)(ii)—as soon as practicable after the information is communicated to the reporting entity; or

 (d) for circumstances specified in the AML/CTF Rules—at the time, or within the period, specified in the AML/CTF Rules.

 (3) The review must be appropriate to the nature, size and complexity of the reporting entity’s business.

Updating ML/TF risk assessment

 (4) A reporting entity must update its ML/TF risk assessment to address any issues identified by a review:

 (a) for a significant change that is within the control of the reporting entity—before the significant change occurs; or

 (b) in any other case—as soon as practicable after the review is completed.

26E  Reporting entities must have up‑to‑date ML/TF risk assessment before providing designated services

 (1) A reporting entity must not commence to provide a designated service to a customer if the reporting entity does not comply with section 26C or 26D in relation to the designated service.

 (3) A reporting entity that contravenes subsection (1) commits a separate contravention of that subsection in respect of each designated service that the reporting entity provides to a customer at or through a permanent establishment of the reporting entity in Australia.

 (4) A reporting entity that contravenes subsection (1) commits a separate contravention of that subsection on each day that the reporting entity provides designated services at or through a permanent establishment of the reporting entity in a foreign country.

Division 3—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.

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.

Additional obligations that apply to lead entities of reporting groups

 (5) Without limiting paragraph (1)(a), if a reporting entity is the lead entity of a reporting group, the AML/CTF policies of the reporting entity must deal with the following:

 (a) ensuring the appropriate sharing of information between members of the reporting group for the following purposes:

 (i) carrying out customer due diligence under Part 2;

 (ii) appropriately identifying, assessing, managing and mitigating the risks of money laundering, financing of terrorism and proliferation financing that each reporting entity that is a member of the reporting group may reasonably face in providing its designated services;

 (b) any other matters specified in the AML/CTF Rules.

 (6) Without limiting paragraph (1)(b), if a reporting entity is the lead entity of a reporting group, the AML/CTF policies of the reporting entity must deal with the following:

 (a) ensuring the sharing of information between members of the reporting group that is necessary for the members of the reporting group who are reporting entities to comply with:

 (i) their obligations imposed by this Act, the regulations and the AML/CTF Rules; and

 (ii) the AML/CTF policies of the lead entity;

 (b) if any member of the reporting group discharges an obligation imposed on another member of the reporting group by this Act, the regulations or the AML/CTF Rules:

 (i) which members of the reporting group may discharge which obligations of which other member; and

 (ii) ensuring that each member of the reporting group that is a reporting entity makes, or has access to, records to demonstrate any discharge by another member of the reporting group of any such obligations imposed on the reporting entity;

 (c) ensuring the confidentiality and appropriate use of any information shared between members of the reporting group, including to prevent any contravention of subsection 123(1) by any member of the reporting group;

 (d) any other matters specified in the AML/CTF Rules.

Note: For other rules about how this Part applies in relation to reporting groups, see sections 26U and 236B.

 (7) The AML/CTF Rules may do either or both of the following:

 (a) specify requirements that must be complied with in relation to a matter mentioned in subsection (3), (4), (5) or (6);

 (b) set out circumstances in which the AML/CTF policies of a reporting entity are taken to comply with a matter mentioned in those subsections.

Reporting entities must develop and maintain AML/CTF policies before providing designated services

 (8) A reporting entity must not commence to provide a designated service to a customer if the reporting entity does not comply with subsection (1).

 (8A) Subsection (8) is a civil penalty provision.

 (9) A reporting entity that contravenes subsection (8) commits a separate contravention of that subsection in respect of each designated service that the reporting entity provides to a customer at or through a permanent establishment of the reporting entity in Australia.

 (10) A reporting entity that contravenes subsection (8) commits a separate contravention of that subsection on each day that the reporting entity provides designated services at or through a permanent establishment of the reporting entity in a foreign country.

Exception

 (11) Despite subsection (1), a reporting entity is not required to develop or maintain policies, procedures, systems and controls that specifically deal with the risk of proliferation financing if:

 (a) the reporting entity reasonably assesses, under section 26C or 26D, the risk of proliferation financing that the reporting entity may reasonably face as low; and

 (b) the reporting entity reasonably assesses that its risk of proliferation financing can be appropriately managed and mitigated by its policies, procedures, systems and controls that manage and mitigate the risks of money laundering or financing of terrorism.

 (12) A person who wishes to rely on subsection (11) bears a legal burden in relation to that matter.

26G  Reporting entities must comply with AML/CTF policies

 (1) A reporting entity must comply with the AML/CTF policies of the reporting entity.

 (2) If:

 (a) a reporting entity is a member of a reporting group; and

 (b) the reporting entity is not the lead entity of the reporting group;

the reporting entity must also comply with the AML/CTF policies of the lead entity of the reporting group that apply to the reporting entity.

Note: The lead entity of the reporting group must comply with its own AML/CTF policies under subsection (1).

 (3) Subsections (1) and (2) are civil penalty provisions.

Division 4—AML/CTF responsibilities of governing bodies

26H  AML/CTF responsibilities of governing bodies

 (1) The governing body of a reporting entity must:

 (a) exercise appropriate ongoing oversight of:

 (i) the reporting entity’s identification and assessment of risk for the purposes of its ML/TF risk assessment; and

 (ii) the reporting entity’s compliance with its AML/CTF policies, the Act, the regulations and the AML/CTF Rules; and

 (b) take reasonable steps to ensure that the reporting entity:

 (i) is appropriately identifying, assessing, managing and mitigating the risks of money laundering, financing of terrorism and proliferation financing that the reporting entity may reasonably face in providing its designated services; and

 (ii) is otherwise complying with its AML/CTF policies, the Act, the regulations and the AML/CTF Rules.

 (2) A reporting entity contravenes this subsection if the governing body of the reporting entity contravenes subsection (1).

Division 5—AML/CTF compliance officers

26J  Reporting entities must designate an individual as the AML/CTF compliance officer for the reporting entity

 (1) The reporting entity must designate an individual as the compliance officer (the AML/CTF compliance officer) for the reporting entity.

AML/CTF compliance officers must have sufficient authority etc.

 (2) A reporting entity must ensure that the individual designated as the AML/CTF compliance officer for the reporting entity:

 (a) is a person employed or otherwise engaged by the reporting entity at management level; and

 (b) has sufficient authority, independence and access to resources and information to ensure the individual can perform the functions of an AML/CTF compliance officer effectively.

AML/CTF compliance officers must meet certain requirements

 (3) An individual is not eligible to be designated as the AML/CTF compliance officer for a reporting entity unless the individual:

 (a) if the reporting entity provides its designated services at or through a permanent establishment of the reporting entity in Australia—is a resident of Australia; and

 (b) is a fit and proper person; and

 (c) meets the requirements (if any) specified in the AML/CTF Rules.

 (4) The AML/CTF Rules may specify matters to which a reporting entity must have regard in determining whether an individual is a fit and proper person for the purposes of paragraph (3)(b).

Civil penalties

 (5) Subsection (2) is a civil penalty provision.

 (6) A reporting entity contravenes this subsection if:

 (a) the reporting entity designates an individual as its AML/CTF compliance officer; and

 (b) the individual is not eligible under subsection (3) to be designated as the AML/CTF compliance officer for the reporting entity.

 (7) Subsection (6) is a civil penalty provision.

26K  Reporting entities must have an AML/CTF compliance officer

 (1) If:

 (a) a reporting entity commences to provide a designated service; and

 (b) an individual is not designated as the AML/CTF compliance officer for the reporting entity;

the reporting entity must, no later than 28 days after the day on which the reporting entity commences to provide the designated service, designate an individual as the AML/CTF compliance officer for the reporting entity.

 (2) If:

 (a) a reporting entity commences to provide a designated service; and

 (b) the individual designated as the AML/CTF compliance officer for the reporting entity ceases to be eligible under subsection 26J(3) to be so designated;

the reporting entity must, no later than 28 days after the day on which the individual ceases to be eligible, designate another individual as the AML/CTF compliance officer for the reporting entity.

 (a) a reporting entity is required under subsection (1) or (2) to designate an individual as the AML/CTF compliance officer for the reporting entity by a particular time; and

 (b) the reporting entity does not do so by that time;

then the obligation to comply with the requirement continues until:

 (c) the reporting entity designates an individual as the AML/CTF compliance officer for the reporting entity; or

 (d) the reporting entity ceases to be a reporting entity;

whichever occurs first.

 (4) A reporting entity that contravenes subsection (1) or (2) by failing to designate an individual as the AML/CTF compliance officer for the reporting entity by a particular time (the deadline) is taken to commit a separate contravention of that subsection on each day that occurs during the period:

 (a) beginning on the day on which the deadline occurs; and

 (b) ending on the day on which the reporting entity’s obligation to comply with the requirement ends (see subsection (3)).

 (5) To avoid doubt, a reporting entity does not contravene subsection (1) or (2) more than once on any particular day, even if the reporting entity commences to provide a designated service more than once on a particular day or during a particular period.

 (6) Subsections (1) and (2) are civil penalty provisions.

26L  AML/CTF compliance officer’s functions

  The functions of the AML/CTF compliance officer for a reporting entity are:

 (a) to oversee and coordinate the reporting entity’s day‑to‑day compliance with this Act, the regulations and the AML/CTF Rules; and

 (b) to oversee and coordinate the effective operation of and compliance with the reporting entity’s AML/CTF policies; and

 (c) to communicate, on behalf of the reporting entity, with AUSTRAC; and

 (d) to do anything incidental to or conducive to the performance of any of the above functions; and

 (e) any other functions specified in the AML/CTF Rules.

26M  Reporting entities must notify AUSTRAC of entity’s AML/CTF compliance officer

 (1) A reporting entity must notify AUSTRAC of the individual who is designated as the reporting entity’s AML/CTF compliance officer within 14 days after the individual is designated as the AML/CTF compliance officer for the reporting entity.

 (2) A notice under subsection (1):

 (a) must be in the approved form; and

 (b) must contain such information, and be accompanied by such documents, as is required by the approved form.

 (3) Subsection (1) is a civil penalty provision.

Division 6—AML/CTF program documentation and approvals

26N  AML/CTF program documentation

 (1) A reporting entity must document the following, within the period (if any) specified in the AML/CTF Rules:

 (a) its AML/CTF program;

 (b) any other matter relating to the AML/CTF program of the reporting entity specified in the AML/CTF Rules.

 (2) A reporting entity must comply with subsection (1).

 (4) If a reporting entity is the responsible entity of a registered scheme (within the meaning of the Corporations Act 2001), the reporting entity’s AML/CTF program may be documented in the same document as the registered scheme’s compliance plan under that Act.

26P  AML/CTF program approvals

 (1) A reporting entity’s ML/TF risk assessment and AML/CTF policies, including any updates to either, must be approved by a senior manager of the reporting entity.

 (2) Any updates to a reporting entity’s ML/TF risk assessment must be notified, in writing, to the governing body of the reporting entity as soon as practicable after the update is made.

 (3) A reporting entity must comply with a requirement under this section.

26Q  Requests for AML/CTF documentation

 (1) The AUSTRAC CEO may, by written notice, request a reporting entity to produce one or more of the documents required by subsection 26N(1) within the period specified in the notice.

 (2) A reporting entity must comply with a notice given under subsection (1).

Division 7—Other matters

26R  AUSTRAC CEO may require reporting entity to undertake ML/TF risk assessment etc.

 (1) This section applies if the AUSTRAC CEO is satisfied that:

 (a) a reporting entity does not have an AML/CTF program; or

 (b) the AML/CTF program of a reporting entity is not up to date; or

 (c) the AML/CTF program of a reporting entity does not appropriately identify, assess, manage or mitigate the risk of money laundering, financing of terrorism and proliferation financing that the reporting entity may reasonably face in providing its designated services.

Requirement

 (2) The AUSTRAC CEO may, by written notice given to the reporting entity, require the reporting entity to:

 (a) do one or more of the following:

 (i) undertake and document an ML/TF risk assessment of the reporting entity;

 (ii) review and update the ML/TF risk assessment of the reporting entity;

 (iii) develop and document AML/CTF policies of the reporting entity;

 (iv) review and update the AML/CTF policies of the reporting entity; and

 (b) provide a copy of the documentation within:

 (i) the period specified in the notice; or

 (ii) if the AUSTRAC CEO allows a longer period—that longer period.

 (3) A person commits an offence if:

 (a) the person is subject to a requirement under subsection (2); and

 (b) the person engages in conduct; and

 (c) the person’s conduct breaches the requirement.

Penalty: Imprisonment for 6 months or 30 penalty units, or both.

 (4) A reporting entity must comply with a requirement under subsection (2).

 (5) Subsection (4) is a civil penalty provision.

26S  Registered remittance affiliates of a registered remittance network provider

 (1) A reporting entity that is a registered remittance network provider must make available an AML/CTF program to its registered remittance affiliates.

 (3) To avoid doubt, subsection (1) does not prevent any of the registered remittance affiliates from:

 (a) undertaking a risk assessment for the remittance affiliate; or

 (b) developing AML/CTF policies for the remittance affiliate.

 (4) If a senior manager of a remittance affiliate of a registered remittance network provider approves the registered remittance network provider’s:

 (a) ML/TF risk assessment; and

 (b) AML/CTF policies;

the remittance affiliate is taken to have complied with the remittance affiliate’s obligations under section 26C and 26F in respect of the remittance affiliate’s designated services to which the registered remittance network provider’s AML/CTF program applies.

26T  Application of Part to holders of Australian financial services licences

 (1) This section applies if all of the designated services provided by a reporting entity are covered by item 54 of table 1 in section 6.

Note: Item 54 of table 1 in section 6 covers a holder of an Australian financial services licence who arranges for a person to receive a designated service.

 (2) Paragraph 26F(1)(a) applies in relation to the reporting entity as if it instead required policies, procedures, systems and controls that:

 (a) relate to undertaking initial customer due diligence in accordance with section 28; and

 (b) are appropriate to the risks of money laundering, financing of terrorism and proliferation financing that the reporting entity may reasonably face in providing its designated services.

 (3) The following provisions of this Part do not apply to the reporting entity:

 (a) paragraphs 26F(1)(b) and (3)(a) to (d) and subsection 26F(4);

 (b) section 26H;

 (c) subsection 26P(2);

 (d) Division 5.

26U  Business of a lead entity of a reporting group

  In applying this Part in relation to a reporting entity that is the lead entity of a reporting group, a reference to the nature, size and complexity of the reporting entity’s business is taken to be a reference to the nature, size and complexity of the business of the lead entity and each other reporting entity that is a member of the reporting group.

Note: For other rules about how this Part applies in relation to a lead entity of a reporting group, see section 236B.

26V  General exemptions

 (1) This Part does not apply to a designated service that is of a kind specified in the AML/CTF Rules.

 (2) The AML/CTF Rules may provide that a specified provision of this Part does not apply to a designated service that is of a kind specified in the AML/CTF Rules.

 (3) This Part does not apply to a designated service that is provided in circumstances specified in the AML/CTF Rules.

 (4) The AML/CTF Rules may provide that a specified provision of this Part does not apply to a designated service that is provided in circumstances specified in the AML/CTF Rules.

25  Subsection 35F(5)

26  Paragraph 38(d)

Omit “money laundering or financing of terrorism”, substitute “money laundering, financing of terrorism or proliferation financing”.

27  Subsection 39(5)

28  Subsections 47(6) and (7)

Repeal the subsections.

29  Section 51A

• Providers of designated services must be entered on the Reporting Entities Roll.

• Reporting entities must be entered on the Reporting Entities Roll.

30  Part 7

Repeal the Part.

31  After section 94

94A  Shell banks

 (1) A shell bank is a corporation that:

 (a) is incorporated in a foreign country; and

 (b) is authorised to carry on banking business in its country of incorporation; and

 (c) does not have a physical presence in its country of incorporation; and

 (d) is not an affiliate of another corporation that:

 (i) is incorporated in a particular country; and

 (ii) is authorised to carry on banking business in its country of incorporation; and

 (iii) has a physical presence in its country of incorporation.

When a corporation has a physical presence in a country

 (2) For the purposes of determining what is a shell bank, a corporation has a physical presence in a country if, and only if:

 (a) the corporation carries on banking business at a place in that country; and

 (b) at least one full‑time employee of the corporation performs banking‑related duties at that place.

When a corporation is affiliated with another corporation

 (3) For the purposes of determining what is a shell bank, a corporation is affiliated with another corporation if, and only if:

 (a) the corporation is a subsidiary of the other corporation; or

 (b) at least one individual controls both corporations; or

 (c) under the regulations, both corporations are taken to be under common control.

32  Section 104

• A reporting entity must retain a copy of its anti‑money laundering and counter‑terrorism financing program.

• A reporting entity must retain records relating to its AML/CTF program.

33  Subsection 108(4)

34  Subsection 114B(4)

35  Division 5 of Part 10

Division 5—AML/CTF program record‑keeping requirements

116  Retention of records relating to Part 1A

 (1) A reporting entity must keep records that:

 (a) are reasonably necessary to demonstrate compliance with the reporting entity’s obligations under Part 1A; and

 (b) are in the English language, or in a form in which the records are readily accessible and readily convertible into writing in the English language.

 (3) A person who is or was a reporting entity must retain the records referred to in subsection (1) throughout the period:

 (a) beginning at the time the record was made; and

 (b) ending 7 years after the record is no longer relevant to the reporting entity’s compliance with its obligations under Part 1A.

35A  Paragraph 123(1)(a)

 (a) the person is or has been:

 (i) a reporting entity; or

 (ii) an officer, employee or agent of a reporting entity; or

 (iii) a member of a reporting group; or

 (iv) an officer, employee or agent of a member of a reporting group; or

 (v) required by a notice under subsection 49(1) to give information or produce documents; or

 (vi) required by notice under subsection 49B(2) to give information or produce documents; and

36  Paragraph 124(2)(a)

After “section”, insert “26R,”.

37  Paragraph 124(2)(a)

Omit “, 162 or 165”, substitute “or 162”.

38  Subsection 161(1)

 (1) This section applies if the AUSTRAC CEO has reasonable grounds to suspect that a reporting entity has not taken, or is not taking, appropriate action to identify, assess, manage or mitigate the risks of money laundering, financing of terrorism and proliferation financing that the reporting entity may reasonably face in providing its designated services at or through a permanent establishment of the reporting entity in Australia.

39  Paragraph 161(2)(b)

 (b) arrange for the external auditor to carry out an external audit of the reporting entity’s capacity and endeavours to identify, assess, manage or mitigate the risks of money laundering, financing of terrorism and proliferation financing that the reporting entity may reasonably face in providing its designated services at or through a permanent establishment of the reporting entity in Australia; and

40  Subsection 161(4)

 (4) The matters that may be specified under paragraph (3)(a) may include either or both of the following:

 (a) an assessment of the risks of money laundering, financing of terrorism and proliferation financing that the reporting entity may reasonably face in providing its designated services at or through a permanent establishment of the reporting entity in Australia;

 (b) an assessment of what the reporting entity will need to do, or continue to do, to appropriately identify, assess, manage or mitigate the risks of money laundering, financing of terrorism and proliferation financing that the reporting entity may reasonably face in providing its designated services at or through a permanent establishment of the reporting entity in Australia.

41  Subparagraph 161(6)(b)(i)

Omit “belongs to a designated business group”, substitute “is a member of a reporting group”.

42  Subparagraph 161(6)(b)(ii)

43  Subparagraph 162(6)(b)(i)

Omit “belongs to a designated business group”, substitute “is a member of a reporting group”.

44  Subparagraph 162(6)(b)(ii)

45  Division 8 of Part 13

Repeal the Division.

46  Subsection 184(4) (before paragraph (b) of the definition of designated infringement notice provision)

 (aa) subsection 26K(1) or (2) (which deal with reporting entities’ obligation to designate an AML/CTF compliance officer);

 (ab) subsection 26M(1) (which deals with notifications about AML/CTF compliance officers);

 (ac) subsection 26N(2) (which deals with AML/CTF program documentation);

 (ad) subsection 26P(3) (which deals with AML/CTF program approvals);

 (ae) subsection 26Q(2) (which deals with requests for AML/CTF program documentation);

47  Subsection 184(4) (paragraph (g) of the definition of designated infringement notice provision)

 (g) subsection 116(1) or (3) (which deal with retaining records relating to AML/CTF programs);

48  Paragraphs 207(3)(a) and (b)

49  Section 234

After:

• In proceedings for a contravention of this Act or the regulations, it is a defence if the defendant proves that the defendant took reasonable precautions, and exercised due diligence, to avoid the contravention.

insert:

• There is a defence to a contravention of certain civil penalty provisions relating to the law of a foreign country preventing compliance.

• Provision is made in relation to how this Act applies to reporting groups.

50  After section 236

236A  Defence of law of foreign country preventing compliance

 (1) A reporting entity does not contravene a civil penalty provision in Part 1A or 2 if:

 (a) the reporting entity provides a designated service at or through a permanent establishment in a foreign country; and

 (b) a law of the foreign country that applies in the place where the permanent establishment is located prevents the reporting entity from complying with that civil penalty provision; and

 (c) before the conduct alleged to constitute the contravention occurs, the reporting entity has given written notice, in the approved form, to the AUSTRAC CEO of those facts; and

 (d) at the time the conduct alleged to constitute the contravention occurs, the reporting entity is taking reasonable steps to ensure that the reporting entity is appropriately identifying, assessing, managing and mitigating any additional risk of money laundering, terrorism financing or proliferation financing associated with being prevented from complying with that civil penalty provision.

 (2) A person who wishes to rely on subsection (1) bears a legal burden in relation to that matter.

236B  Application of this Act in relation to reporting groups

Designated services of reporting group taken to be provided by lead entity for certain purposes

 (1) Subsection (2) applies if a reporting entity (the ordinary member) that is a member of a reporting group but is not the lead entity of the reporting group proposes to provide, commences to provide, or provides, a designated service.

 (2) For the purposes of Parts 1A, 2, 3A and 10, and Division 9 of Part 15, the lead entity is also taken to have proposed to provide, commenced to provide, or provided, as the case requires, the designated service in the same circumstances as those in which the service is proposed to be provided, is commenced to have been provided, or is provided, by the ordinary member.

Note: In relation to the application of Part 1A to reporting groups, see also section 26U (business of a lead entity of a reporting group).

 (3) For the purposes of subsection (2), the same circumstances include:

 (a) that a permanent establishment of the ordinary member is taken to be a permanent establishment of the lead entity; and

 (b) that the lead entity is taken to provide the designated service in the same capacity as the ordinary member; and

 (c) that the lead entity is taken to have received any information communicated either directly or indirectly by AUSTRAC to the ordinary member that identifies or assesses the risks associated with the ordinary member’s provision of the designated service; and

 (d) a circumstance specified by the AML/CTF Rules.

 (4) Subsection (3) does not limit subsection (2).

Discharge of obligations by members of a reporting group

 (a) a reporting entity is a member of a reporting group; and

 (b) an obligation is imposed on the reporting entity by a provision of this Act, the regulations or the AML/CTF Rules; and

 (c) such other conditions (if any) as are specified in the AML/CTF Rules are satisfied; and

 (d) the obligation is not of a kind, or does not arise in circumstances, specified in the AML/CTF Rules;

the obligation may be discharged by any other member of the reporting group.

Note: The member who discharges the obligation need not be a reporting entity.

Contraventions of civil penalty provisions by members of reporting groups

 (6) A civil penalty provision that would otherwise be contravened only by a reporting entity that is:

 (a) a member of a reporting group; and

 (b) not the lead entity of the reporting group;

is taken to have been contravened by both the reporting entity and the lead entity.

Schedule 2—Customer due diligence

• A reporting entity must carry out a procedure to verify a customer’s identity before providing a designated service to the customer. However, in special cases, the procedure may be carried out after the provision of the designated service.

• A reporting entity must undertake initial customer due diligence before providing a designated service to the customer. However, in special cases, initial customer due diligence may be carried out after the provision of the designated service.

• Certain pre‑commencement customers are subject to modified identification procedures.

• Certain pre‑commencement customers are subject to modified customer due diligence.

3  Section 4

• Certain low‑risk services are subject to modified identification procedures.

• Simplified customer due diligence may be undertaken in certain low risk circumstances as part of initial and ongoing customer due diligence.

4  Section 5 (definition of applicable customer identification procedure)

5  Section 5

beneficial owner of a person (other than an individual) means an individual who:

 (a) ultimately owns (either directly or indirectly) 25% or more of the person; or

 (b) controls (directly or indirectly) the person.

business relationship means a relationship between a reporting entity and a customer involving the provision of a designated service or designated services that has, or could reasonably be expected to have, an element of duration.

child: without limiting who is a child of another person for the purposes of this Act, each of the following is the child of a person:

 (a) a stepchild or an adopted child of the person;

 (b) someone who would be the stepchild of the person except that the person is not legally married to the person’s partner;

 (c) someone who is a child of the person within the meaning of the Family Law Act 1975.

de facto partner has the same meaning as in the Acts Interpretation Act 1901.

domestic politically exposed person means:

 (a) an individual who holds an office or position (whether or not in or for the Commonwealth) specified in the AML/CTF Rules; or

 (b) an individual who is a member of the legislature of the Commonwealth or of a State or Territory; or

 (c) a family member of an individual covered by paragraph (a) or (b); or

 (d) an individual who is known (having regard to information that is public or readily available) to have:

 (i) joint beneficial ownership of a body corporate or legal arrangement with an individual covered by paragraph (a) or (b); or

 (ii) sole beneficial ownership of a body corporate or legal arrangement on behalf or for the benefit of an individual covered by paragraph (a) or (b); or

 (iii) any other close business relations with an individual covered by paragraph (a) or (b).

family member of an individual who is covered by:

 (a) paragraph (a) or (b) of the definition of domestic politically exposed person in this section; or

 (b) paragraph (a) of the definition of foreign politically exposed person in this section; or

 (c) paragraph (a) of the definition of international organisation politically exposed person in this section;

includes:

 (d) a spouse, de facto partner, or other person who is equivalent to a spouse or de facto partner under any applicable law of a foreign country, of the individual; and

 (e) a child of the individual; and

 (f) a spouse or de facto partner, or other person who is equivalent to a spouse or de facto partner under any applicable law of a foreign country, of a child of the individual; and

 (g) a parent of the individual.

foreign politically exposed person means:

 (a) an individual who holds a prominent office or position or public function in or for the legislature, executive or judiciary of a foreign country, including an individual who holds any of the following offices or positions:

 (i) head of state or head of government;

 (ii) member of the executive council of government;

 (iii) member of a legislature;

 (iv) minister, deputy minister or equivalent office or position;

 (v) judge of a supreme court, constitutional court or other court of general jurisdiction or last resort;

 (vi) ambassador, high commissioner or charge d’affaires;

 (vii) high ranking military officer;

 (viii) head or board member of a government body;

 (ix) head or board member of a state‑owned company or a state‑owned bank;

 (x) member of a governing body of a political party represented in a legislature;

 (xi) an office or position prescribed in the AML/CTF Rules; or

 (b) a family member of an individual covered by paragraph (a); or

 (c) an individual who is known (having regard to information that is public or readily available) to have:

 (i) joint beneficial ownership of a body corporate or legal arrangement with an individual covered by paragraph (a); or

 (ii) sole beneficial ownership of a body corporate or legal arrangement on behalf or for the benefit of an individual covered by paragraph (a); or

 (iii) any other close business relations with an individual covered by paragraph (a).

Note: Foreign country has an extended meaning—see the definition of foreign country in this section.

international organisation politically exposed person means:

 (a) an individual who is entrusted with a prominent public function, position or office of a public international organisation, including a head, deputy head or board member in a public international organisation;

 (b) a family member of an individual covered by (a);

 (c) an individual who is known (having regard to information that is public or readily available) to have:

 (i) joint beneficial ownership of a body corporate or legal arrangement with an individual covered by paragraph (a); or

 (ii) sole beneficial ownership of a body corporate or legal arrangement on behalf or for the benefit of an individual covered by paragraph (a); or

 (iii) any other close business relations with an individual covered by paragraph (a).

KYC information (short for know your customer information) about a customer of a reporting entity means information about the customer that:

 (a) provides reasonable grounds for the reporting entity to establish the matters mentioned in subsection 28(2); or

 (b) enables the reporting entity to identify or assess the ML/TF risk of the customer.

ML/TF risk, of a customer, means the risks of money laundering, financing of terrorism and proliferation financing that a reporting entity may reasonably face in providing its designated service, or designated services, to the customer.

nested services relationship means a relationship that involves the provision of a designated service by a reporting entity that is a remitter, virtual asset service provider or financial institution to a customer that is a remitter, virtual asset service provider or financial institution where:

 (a) the reporting entity provides the designated service at or through a permanent establishment in one country; and

 (b) the customer uses the designated service to provide services to its own customers at or through a permanent establishment in another country; and

 (c) the relationship is not a correspondent banking relationship.

occasional transaction means the provision of a designated service by a reporting entity to a customer other than as part of a business relationship.

parent: without limiting who is a parent of another person for the purposes of this Act, a person is the parent of another person if the other person is the person’s child because of the definition of child in this section.

person designated for targeted financial sanctions means:

 (a) a designated person or entity (within the meaning of regulations made under the Charter of the United Nations Act 1945); or

 (b) a designated person or entity (within the meaning of regulations made under the Autonomous Sanctions Act 2011).

politically exposed person means:

 (a) a domestic politically exposed person; or

 (b) a foreign politically exposed person; or

 (c) an international organisation politically exposed person.

pre‑commencement customer: see subsection 36(1).

public international organisation has the same meaning as in section 70.1 of the Criminal Code.

spouse of a person includes a de facto partner of the person within the meaning of the Acts Interpretation Act 1901.

6  Part 2 (heading)

Repeal the heading, substitute:

Part 2—Customer due diligence

7  Divisions 1 to 5 of Part 2

Repeal the Divisions, substitute:

27  Simplified outline

• A reporting entity must undertake initial customer due diligence before providing a designated service to a customer. However, in special cases, initial customer due diligence may be carried out after the provision of the designated service.

• A reporting entity must undertake ongoing customer due diligence in relation to the provision by the reporting entity of designated services.

• Simplified customer due diligence may be undertaken in certain low risk circumstances as part of initial and ongoing customer due diligence.

• Enhanced customer due diligence must be undertaken in certain circumstances as part of initial and ongoing customer due diligence.

• Certain pre‑commencement customers are subject to modified customer due diligence.

• Exemptions from initial customer due diligence, and ongoing customer due diligence, apply in certain circumstances.

Division 2—Initial customer due diligence

28  Undertaking initial customer due diligence

 (1) A reporting entity must not commence to provide a designated service to a customer if the reporting entity has not established on reasonable grounds each of the matters in subsection (2) in relation to the customer.

Note 1: See also section 31 (simplified customer due diligence).

Note 2: See also section 32 (enhanced customer due diligence).

Note 3: See section 36 for rules that apply to pre‑commencement customers.

 (2) The matters are as follows:

 (a) the identity of the customer;

 (b) the identity of any person on whose behalf the customer is receiving the designated service;

 (c) the identity of any person acting on behalf of the customer and their authority to act;

 (d) if the customer is not an individual—the identity of any beneficial owners of the customer;

 (e) whether the customer, any beneficial owner of the customer, any person on whose behalf the customer is receiving the designated service, or any person acting on behalf of the customer is:

 (i)  a politically exposed person; or

 (ii) a person designated for targeted financial sanctions;

 (f) the nature and purpose of the business relationship or occasional transaction;

 (g) any other matter relating to the customer that is specified in the AML/CTF Rules.

 (3) Without limiting subsection (1), a reporting entity must do the following for the purposes of establishing on reasonable grounds the matters in subsection (2):

 (a) if the customer is an individual—take reasonable steps to establish that the customer is the person the customer claims to be;

 (b) identify the ML/TF risk of the customer, based on KYC information about the customer that is reasonably available to the reporting entity before commencing to provide the designated service;

 (c) collect KYC information about the customer that is appropriate to the ML/TF risk of the customer;

 (d) verify, using reliable and independent data, such of the KYC information referred to in paragraph (c) as is appropriate to the ML/TF risk of the customer.

 (4) If a reporting entity provides its designated services at or through a permanent establishment of the reporting entity in Australia, a reporting entity must take into account the following matters when identifying the ML/TF risk of the customer for the purposes of paragraph (3)(b):

 (a) the reporting entity’s ML/TF risk assessment;

 (b) the kind of customer to whom the designated services will be provided;

 (c) the kinds of designated services provided, or proposed to be provided, by the reporting entity to the customer;

 (d) the delivery channels by which the reporting entity’s designated services are or will be provided to the customer;

 (e) the countries with which the reporting entity deals, or will deal, in providing its designated services to the customer;

 (f) the matters (if any) specified in the AML/CTF Rules.

 (5) Subsection (4) does not limit the matters a reporting entity may take into account for the purposes of paragraph (3)(b).

 (6) The AML/CTF Rules may do either or both of the following:

 (a) specify requirements that must be complied with for the purposes of establishing on reasonable grounds the matters in subsection (2);

 (b) set out circumstances in which a reporting entity is taken to comply with a matter mentioned in that subsection.

 (7) Without limiting paragraph (2)(g) or (4)(f) or subsection (6), AML/CTF Rules made for the purposes of any of those provisions may make different provision in relation to different classes of customers, including:

 (a) customers in relation to whom simplified due diligence measures may be taken in accordance with section 31; and

 (b) customers in relation to whom enhanced customer due diligence measures must be undertaken in accordance with section 32.

Note: This subsection also does not limit subsection 13(3) of the Legislation Act 2003 or subsection 33(3AB) of the Acts Interpretation Act 1901: see section 249.

 (8) Subsection (1) is a civil penalty provision.

 (9) A reporting entity that contravenes subsection (1) in relation to a customer commits a separate contravention of that subsection in respect of each designated service that the reporting entity provides to the customer at or through a permanent establishment of the reporting entity in Australia.

 (10) A reporting entity that contravenes subsection (1) in relation to a customer commits a separate contravention of that subsection on each day that the reporting entity provides designated services to the customer at or through a permanent establishment of the reporting entity in a foreign country.

29  Exemptions from initial customer due diligence

  Despite subsection 28(1), a reporting entity may commence to provide a designated service to a customer before the reporting entity complies with that subsection if:

 (a) circumstances specified in the AML/CTF Rules apply; and

 (b) the reporting entity determines on reasonable grounds that commencing to provide the designated service to the customer before subsection 28(1) is complied with in relation to the customer is essential to avoid interrupting the ordinary course of business; and

 (c) the reporting entity has AML/CTF policies to comply with subsection 28(1) in relation to the customer:

 (i) as soon as reasonably practicable after commencing to provide the designated service to the customer; and

 (ii) within the period (if any) specified in the AML/CTF Rules; and

 (d) the reporting entity determines on reasonable grounds that any additional risk of money laundering, terrorism financing or proliferation financing associated with complying with subsection 28(1) in relation to the customer after commencing to provide the designated service to the customer is low; and

 (e) the reporting entity implements AML/CTF policies to mitigate and manage the associated risks; and

 (f) the reporting entity complies with the requirements (if any) specified in the AML/CTF Rules.

Division 3—Ongoing customer due diligence

30  Undertaking ongoing customer due diligence

 (1) A reporting entity must monitor its customers in relation to the provision of its designated services to appropriately identify, assess, manage and mitigate the risks of money laundering, financing of terrorism and proliferation financing that the reporting entity may reasonably face in providing designated services.

Note 1: See also section 31 (simplified customer due diligence).

Note 2: See also section 32 (enhanced customer due diligence).

Note 3: See section 36 for rules that apply to pre‑commencement customers.

 (2) Without limiting subsection (1), if the reporting entity provides its designated services at or through a permanent establishment of the reporting entity in Australia, the reporting entity must:

 (a) monitor for unusual transactions and behaviours of customers that may give rise to a suspicious matter reporting obligation; and

 (b) if the reporting entity has a business relationship with a customer—review and, where appropriate, update the reporting entity’s identification and assessment of the ML/TF risk of the customer in the following circumstances:

 (i) if there is a significant change to any of the matters mentioned in subsection 28(4);

 (ii) if there are unusual transactions and behaviours in relation to the customer that may give rise to a suspicious matter reporting obligation;

 (iii) circumstances specified in the AML/CTF Rules; and

 (c) if the reporting entity has a business relationship with a customer—review and, where appropriate, update and reverify KYC information relating to the customer at a frequency appropriate to the ML/TF risk of the customer, and if either of the following occur:

 (i) the reporting entity has doubts about the adequacy or veracity of the KYC information relating to the customer;

 (ii) circumstances specified in the AML/CTF Rules; and

 (d) if the reporting entity has a business relationship with a customer that is a pre‑commencement customer—monitor for significant changes in the nature and purpose of the business relationship that may result in the ML/TF risk of the customer being medium or high; and

 (e) comply with any other requirements specified in the AML/CTF Rules.

 (3) The AML/CTF Rules may do either or both of the following:

 (a) specify requirements that must be complied with in relation to the matters mentioned in subsection (2);

 (b) set out circumstances in which a reporting entity is taken to comply with a matter mentioned in that subsection.

 (4) Without limiting subparagraph (2)(b)(iii) or (2)(c)(ii), paragraph (2)(e) or subsection (3), AML/CTF Rules made for the purposes of any of those provisions may make different provision in relation to different classes of customers, including:

 (a) customers in relation to whom simplified due diligence measures may be taken in accordance with section 31; and

 (b) customers in relation to whom enhanced customer due diligence measures must be undertaken in accordance with section 32.

Note: This subsection also does not limit subsection 13(3) of the Legislation Act 2003 or subsection 33(3AB) of the Acts Interpretation Act 1901: see section 249.

 (5) For the purposes of this section, unusual transactions and behaviours of a customer include the following:

 (a) unusually large or complex transactions relating to the customer;

 (b) transactions and behaviours that are part of an unusual pattern of transactions and behaviours relating to the customer;

 (c) transactions and behaviours that have no apparent economic or lawful purpose;

 (d) transactions and behaviours that are inconsistent with what the reporting entity reasonably knows about any of the following:

 (i) the customer;

 (ii) the nature and purpose of the business relationship;

 (iii) the ML/TF risk of the customer;

 (iv) where relevant, the customer’s source of funds or source of wealth.

 (6) Subsection (1) is a civil penalty provision.

 (7) A reporting entity that contravenes subsection (1) in relation to a customer commits a separate contravention of that subsection in respect of each designated service that the reporting entity provides to the customer at or through a permanent establishment of the reporting entity in Australia.

 (8) A reporting entity that contravenes subsection (1) in relation to a customer commits a separate contravention of that subsection on each day that the reporting entity provides designated services to the customer at or through a permanent establishment of the reporting entity in a foreign country.

Registered remittance affiliates

 (9) If an obligation is imposed by subsection (1) on a reporting entity in its capacity as a registered remittance affiliate of a registered remittance network provider, the obligation may be discharged by the registered remittance network provider.

Exemption

 (10) This section does not apply to a designated service covered by item 54 of table 1 in section 6.

Note: Item 54 of table 1 in section 6 covers a holder of an Australian financial services licence who arranges for a person to receive a designated service.

Division 4—Simplified and enhanced customer due diligence

31  Simplified customer due diligence

  In complying with the obligation imposed on a reporting entity under subsection 28(1) or 30(1) in relation to a customer, the reporting entity may apply simplified customer due diligence measures if:

 (a) the ML/TF risk of the customer is low; and

 (b) section 32 does not apply to the customer; and

 (c) the reporting entity complies with the requirements specified in the AML/CTF Rules.

32  Enhanced customer due diligence obligation

  In complying with the obligation imposed on a reporting entity under subsection 28(1) or 30(1) in relation to a customer, the reporting entity must apply enhanced customer due diligence measures appropriate to the ML/TF risk of the customer if one or more of the following apply to the customer:

 (a) the ML/TF risk of the customer is high;

 (b) if:

 (i) a suspicious matter reporting obligation arises for the reporting entity in relation to the customer; and

 (ii) the reporting entity proposes to continue to provide a designated service or designated services to the customer;

 (c) the customer, any beneficial owner of the customer, any person on whose behalf the customer is receiving the designated service, or any person acting on behalf of the customer, is a foreign politically exposed person;

 (d) the customer, any beneficial owner of the customer, any person on whose behalf the customer is receiving the designated service, or any person acting on behalf of the customer, is:

 (i) an individual who is physically present in a high risk jurisdiction for which the international body known as the Financial Action Task Force has called for enhanced due diligence to be applied; or

 (ii) a body corporate or legal arrangement that was formed in a high risk jurisdiction for which the international body known as the Financial Action Task Force has called for enhanced due diligence to be applied;

 (e) the designated service provided or proposed to be provided to the customer is provided or proposed to be provided as part of a nested services relationship;

 (f) the customer is of a kind specified in the AML/CTF Rules.

8  Division 6 of Part 2

Division 6—Pre‑commencement customers

36  Pre‑commencement customers

 (1) A customer of a reporting entity is a pre‑commencement customer if:

 (a) the reporting entity commenced before 12 December 2007 to provide a designated service covered by an item of table 1, 2 or 3 in section 6 of this Act to the customer; or

 (b) the business relationship between the reporting entity and the customer involved the provision of only any of the following designated services in section 6 of this Act as at the start of 1 July 2026:

 (i) designated services covered by item 2 of table 2 in section 6;

 (ii) designated services covered by table 5 in section 6;

 (iii) designated services covered by table 6 in section 6.

 (2) A pre‑commencement customer of a reporting entity ceases to be a pre‑commencement customer when the reporting entity complies with subsection 28(1) in relation to the customer.

 (3) Subsection 28(1) and paragraph 30(2)(b) do not apply in relation to a customer that is a pre‑commencement customer.

 (4) However, subsection 28(1) applies in relation to a customer that is a pre‑commencement customer if:

 (a) a suspicious matter reporting obligation arises for the reporting entity in relation to the customer; or

 (b) there is a significant change in the nature and purpose of the business relationship with the customer which results in the ML/TF risk of the customer being medium or high.

9  Section 37 (heading)

Omit “Applicable customer identification procedures”, substitute “Collection and verification of KYC information”.

10  Subsection 37(1)

Omit “the carrying out by a reporting entity of an applicable customer identification procedure or an identity verification procedure”, substitute “a reporting entity complying with paragraphs 28(3)(c) and (d)”.

11  Subsection 37(1) (note)

Omit “carrying out the applicable customer identification procedures”, substitute “complying with paragraphs 28(3)(c) and (d)”.

12  Subsection 37(2)

Omit “carrying out applicable customer identification procedures or identity verification procedures”, substitute “complying with paragraphs 28(3)(c) and (d)”.

13  Subsection 37(3)

Omit “carrying out the applicable customer identification procedure or an identity verification procedure”, substitute “complying with paragraphs 28(3)(c) and (d)”.

14  Section 37A (heading)

Omit “applicable customer identification procedures”, substitute “collection and verification of KYC information”.

15  Paragraph 37A(1)(a)

Omit “applicable customer identification procedures”, substitute “the collection and verification of KYC information relating to a customer in accordance with paragraphs 28(3)(c) and (d)”.

16  Subsection 37A(2)

Omit “carried out the applicable customer identification procedure”, substitute “complied with paragraphs 28(3)(c) and (d)”.

17  Section 38 (heading)

Omit “applicable customer identification procedures”, substitute “collection and verification of KYC information”.

18  Paragraph 38(b)

Omit “carried out an applicable customer identification procedure”, substitute “complied with paragraph 28(3)(c) or (d)”.

19  Section 38

Omit “carried out the applicable customer identification procedure”, substitute “complied with paragraph 28(3)(c) or (d)”.

20  Subsection 39(6)

Omit “Division 6”, substitute “Divisions 3 and 4”.

21  Section 104 (paragraph (a))

Omit “applicable customer identification procedures it carries out or that it is taken to have carried out”, substitute “customer due diligence”.

22  Section 104 (paragraph (b))

Omit “applicable customer identification procedures”, substitute “the collection and verification of KYC information about a customer”.

23  Division 3 of Part 10 (heading)

Omit “the carrying out of identification procedures”, substitute “customer due diligence and other procedures”.

24  Sections 111 to 113

Repeal the sections, substitute:

111  Retention of records of customer due diligence

 (1) This section applies to a reporting entity if the reporting entity complies with section 28 (undertaking initial customer due diligence) or 30 (undertaking ongoing customer due diligence) in relation to a customer to whom the reporting entity provides a designated service, or proposed or proposes to provide a designated service.

 (2) The reporting entity must retain, until the end of the 7 year period that begins when the business relationship ends or the reporting entity completes the provision of the occasional transaction, records that:

 (a) are reasonably necessary to demonstrate compliance with the reporting entity’s obligations under Part 2; and

 (b) are in the English language, or in a form in which the records are readily accessible and readily convertible into writing in the English language.

 (3) Without limiting paragraph (2)(a), the records must include:

 (a) sufficient and accurate records which demonstrate the type and content of the data collected by the reporting entity in relation to the customer for the purposes of complying with section 28 or 30; and

 (b) records of any analysis, identification or assessment of ML/TF risk, or decision making, undertaken by the reporting entity in relation to the customer for the purposes of complying with section 28 or 30.

 (4) Subsection (2) is a civil penalty provision.

25  Section 114 (heading)

Omit “identification procedures”, substitute “initial customer due diligence”.

26  Paragraph 114(1)(b)

Omit “carried out an applicable customer identification procedure”, substitute “complied with paragraph 28(3)(c) or (d)”.

27  Section 135 (paragraph (c))

Omit “an applicable customer identification procedure”, substitute “customer due diligence under Part 2”.

28  Paragraph 138(1)(a)

Omit “an applicable customer identification procedure”, substitute “customer due diligence”.

29  Paragraph 138(1)(b)

 (b) the customer due diligence is under section 28 (undertaking initial customer due diligence) or 30 (undertaking ongoing customer due diligence).

30  Subsection 138(2)

Omit “applicable customer identification procedure is under this Act”, substitute “customer due diligence is under section 28 or 30”.

31  Paragraph 138(3)(b)

Omit “an applicable customer identification procedure”, substitute “customer due diligence”.

32  Paragraph 138(3)(c)

 (c) the customer due diligence is under section 28 or 30.

33  Subsection 138(4)

Omit “applicable customer identification procedure is under this Act”, substitute “customer due diligence is under section 28 or 30”.

34  Subsection 184(4) (paragraph (a) of the definition of designated infringement notice provision)

Repeal the paragraph.

35  Subsection 184(4) (before paragraph (fl) of the definition of designated infringement notice provision)

 (fk) subsection 111(2) (which deals with retaining records relating to customer due diligence);

36  Paragraph 235(1)(c)

 (c) in complying with subsection 28(1) or 30(1); or

Banking Act 1959

37  Subsection 16AH(7) (heading)

Omit “section 32”, substitute “section 28”.

38  Subsection 16AH(7)

Omit “Section 32”, substitute “Section 28”.

39  Subsection 90B(4) (table item 6, column headed “Person or organisation”, paragraph (b))

Omit “carries out applicable customer identification procedures under”, substitute “collects and verifies information relating to a customer in accordance with section 28 of”.

40  Subsection 90B(4) (table item 7, column headed “Person or organisation”)

Omit “carrying out of applicable customer identification procedures under”, substitute “collection or verification of information relating to a customer in accordance with section 28 of”.

41  Subsection 90B(10) (definition of applicable customer identification procedure)

42  Subsection 91A(2D)

Omit “carry out an applicable customer identification procedure under”, substitute “collect and verify information relating to a customer in accordance with section 28 of”.

43  Subsection 91A(2E)

Omit “carrying out of an applicable customer identification procedure under”, substitute “collection or verification of information relating to a customer in accordance with section 28 of”.

44  Subsection 91A(3) (definition of applicable customer identification procedure)

Schedule 3—Regulating additional high‑risk services

Part 1—Real estate

land includes:

 (a) land in Australia or a foreign country; and

 (b) land the subject of a subdivision arrangement.

land use entitlement means an entitlement to occupy land conferred through an ownership of shares in a company or units in a unit trust scheme, or a combination of a shareholding or ownership of units together with a lease or licence.

real estate means:

 (a) any of the following interests in land in Australia:

 (i) a fee simple interest;

 (ii) a leasehold interest;

 (iii) a land use entitlement; or

 (b) an interest, estate, right or entitlement in land in a foreign country that:

 (i) is equivalent to an interest mentioned in paragraph (a); or

 (ii) otherwise confers ownership rights on the holder of that interest, estate; right or entitlement; or

 (c) an interest prescribed by the regulations;

but does not include the following:

 (d) incorporeal hereditaments;

 (e) the interest of a mortgagee;

 (f) a leasehold interest under a lease for a term (excluding options for further terms) of 30 years or less;

 (g) any other interest, estate, right or entitlement in land in a foreign country that is equivalent to an interest mentioned in paragraph (d), (e) or (f);

 (h) an interest prescribed by the regulations.

subdivision arrangement means:

 (a) an arrangement:

 (i) under which the title (whether freehold or leasehold) to a portion of land is subdivided into separate freehold or leasehold titles relating to smaller portions of land within the first‑mentioned portion; and

 (ii) under which property that is common between the owners or occupiers of the smaller portions is owned or managed by a single body corporate (however described); and

 (iii) that exists under a law, of the State or Territory in which the land is located, relating to “strata titles”, “community titles”, “unit titles”, “cluster titles” or something referred to by another term reflecting the features referred to in subparagraphs (i) and (ii); or

 (b) an arrangement under which:

 (i) a body corporate owns an interest (whether freehold or leasehold) in land; and

 (ii) under the constitution of the body corporate, a holder of shares in the body has, or may be granted, a right to occupy or use some or all of the land, whether the right is by way of a lease or licence or otherwise; or

 (c) an arrangement in relation to which all of the following subparagraphs apply:

 (i) under the arrangement, an interest (whether freehold or leasehold) in land is held on trust;

 (ii) under the terms of the trust, a holder of an interest in the trust has, or may be granted, a right to occupy or use part of the land, whether the right is by way of a lease or licence or otherwise;

 (iii) the trustee of the trust is a body corporate;

 (iv) there are at least 2 distinct parts of the land for which subparagraph (ii) is satisfied.

2  After subsection 6(5)

Table 5—Real estate services

 (5A) Table 5 is as follows:

• Table 5—Real estate services
• 1 brokering the sale, purchase or transfer of real estate on behalf of a buyer, seller, transferee or transferor in the course of carrying on a business both:(a) the seller or transferor; and(b) the buyer or transferee
• 2 selling or transferring real estate in the course of carrying on a business selling real estate, where the sale or transfer is not brokered by an independent real estate agent the buyer or transferee

Part 2—Dealers in precious metals and stones

3  Section 5 (definition of bullion)

bullion means gold, silver, platinum or palladium that:

 (a) is in the form of a bar, coin, ingot, plate, wafer or like form of mass; and

 (b) bears a mark or characteristic generally accepted as identifying and guaranteeing the fineness and quality of the gold, silver, platinum or palladium; and

 (c) is usually traded at a price that is determined by reference to the spot price of the gold, silver, platinum or palladium.

4  Section 5

precious metal: see subsection 5A(1).

precious product: see subsection 5A(6).

precious stone: see subsection 5A(3).

5  After section 5

5A  Precious metal, precious stones and precious products

Precious metal

 (1) Each of the following substances is a precious metal:

 (a) gold;

 (b) silver;

 (c) platinum;

 (d) iridium;

 (e) osmium;

 (f) palladium;

 (g) rhodium;

 (h) ruthenium;

 (i) a substance prescribed by the AML/CTF Rules;

 (j) an alloy substance with at least 2% in weight of any of the substances mentioned in paragraphs (a) to (i).

 (2) For the purposes of subsection (1), it is immaterial whether the substance is in a manufactured or unmanufactured state.

Precious stones

 (3) A precious stone is a substance that:

 (a) has gem quality; and

 (b) has market‑recognised beauty, rarity and value.

 (4) For the purposes of subsection (3), it is immaterial whether the substance is natural, synthetic or reconstructed.

 (5) Without limiting subsection (3), each of the following substances is a kind of precious stone:

 (a) beryl;

 (b) corundum;

 (c) diamond;

 (d) garnet;

 (e) jadeite jade;

 (f) opal;

 (g) pearl;

 (h) topaz;

 (i) a substance prescribed by the AML/CTF Rules.

Precious products

 (6) A precious product is any of the following that is made up of, containing or having attached to it, any precious metal or precious stone, or both:

 (a) jewellery;

 (b) a watch;

 (c) an object of personal adornment not otherwise covered by paragraph (a) or (b);

 (d) an article of goldsmiths’ or silversmiths’ wares.

Examples: A stainless steel watch with rubies set on the watch face, a platinum tie bar or a gold and pearl necklace.

 (7) In subsection (6):

goldsmiths’ or silversmiths’ wares include such articles as ornaments, tableware, smokers’ requisites and other articles of personal, household, office or religious use.

6  Subsection 6(3)

Table 2—Bullion and precious metals, stones and products

 (3) Table 2 is as follows:

• Table 2—Bullion and precious metals, stones and products
• 1 buying or selling bullion, where the buying or selling is in the course of carrying on a bullion‑dealing business the buyer or the seller (as the case may be)
• 2 buying or selling one or more of the following items in the course of carrying on a business, where the purchase involves the transfer of physical currency or virtual assets (or a combination of physical currency and virtual assets) with a total value of not less than $10,000, whether the purchase is made in a single transaction or in several transactions that are linked or appear to be linked:(a) precious metal;(b) precious stones;(c) precious products;(d) any combination of any 2 or more of the items referred to in paragraphs (a) to (c) the buyer or the seller (as the case may be)

Part 3—Professional services

7  Section 5 (definition of exempt legal practitioner service)

express trust means a trust expressly and intentionally created in writing by a settlor but does not include a testamentary trust.

legal arrangement means:

 (a) an express trust; or

 (b) a partnership; or

 (c) a joint venture; or

 (d) an unincorporated association; or

 (e) an arrangement, including a foreign arrangement such as a fiducie, treuhand or fideicomiso, similar to an arrangement mentioned in any of the above paragraphs.

nominee shareholder, in relation to a body corporate or legal arrangement, means a person who:

 (a) holds shares or an interest in the body corporate or legal arrangement on behalf of another person (the nominator); and

 (b) exercises voting rights associated with the shares or interest according to the instructions of the nominator, or receives dividends on behalf of the nominator, or both.

9  Subsection 6(2) (table item 46, column headed “Provision of a designated service”, paragraph (b))

(b) the service is not specified in the AML/CTF Rules

10  Before subsection 6(6)

Table 6—Professional services

 (5B) Table 6 is as follows:

• Table 6—Professional services
• 1 assisting a person in the planning or execution of a transaction, or otherwise acting for or on behalf of a person in a transaction, to sell, buy or otherwise transfer real estate, where:(a) the service is provided in the course of carrying on a business; and(b) the sale, purchase or other transfer is not pursuant to, or resulting from, an order of a court or tribunal the person
• 2 assisting a person in the planning or execution of a transaction, or otherwise acting for or on behalf of a person in a transaction, to sell, buy or otherwise transfer a body corporate or legal arrangement, where:(a) the service is provided in the course of carrying on a business; and(b) the sale, purchase or other transfer is not pursuant to, or resulting from, an order of a court or tribunal the person
• 3 receiving, holding and controlling (including disbursing) or managing a person’s:(a) money; or(b) accounts; or(c) securities and securities accounts; or(d) virtual assets; or(e) other property;as part of assisting the person in the planning or execution of a transaction, or otherwise acting for or on behalf of a person in a transaction, in the course of carrying on a business (other than in a circumstance covered by subsection (5C)) the person
• 4 assisting a person in organising, planning or executing a transaction, or otherwise acting for or on behalf of a person in a transaction, for equity or debt financing relating to:(a) a body corporate (or proposed body corporate); or(b) a legal arrangement (or proposed legal arrangement);in the course of carrying on a business the person
• 5 selling or transferring a shelf company, in the course of carrying on a business the buyer or transferee
• 6 assisting a person to plan or execute, or otherwise acting on behalf of a person in, the creation or restructuring of:(a) a body corporate (other than a corporation under the Corporations (Aboriginal and Torres Strait Islander) Act 2006); or(b) a legal arrangement;in the course of carrying on a business the person and:(a) if the body corporate is a company and the service is creating the company—the beneficial owners and directors of the company; or(b) if the legal arrangement is an express trust and the service is creating the express trust—the trustee, settlor and beneficiaries of the trust
• 7 acting as, or arranging for another person to act as, any of the following, on behalf of a person (the nominator), in the course of carrying on a business:(a) a director or secretary of a company;(b) a power of attorney of a body corporate or legal arrangement;(c) a partner in a partnership;(d) a trustee of an express trust;(e) a position in any other legal arrangement that is functionally equivalent to a position mentioned in any of the above paragraphs;other than in a circumstance covered by subsection (5E) the nominator
• 8 acting as, or arranging for another person to act as, a nominee shareholder of a body corporate or legal arrangement, on behalf of a person (the nominator), in the course of carrying on a business the nominator
• 9 providing a registered office address or principal place of business address of a body corporate or legal arrangement, in the course of carrying on a business the person to whom the service is provided

 (5C) For the purposes of item 3 of the table in subsection (5B), the circumstances are as follows:

 (a) the money, accounts, securities, securities accounts, virtual assets or other property being held or managed is payment by the person for the provision of goods or services by the business;

 (b) both:

 (i) the business does not provide any designated services other than the services referred to in item 3 of the table in subsection (5B); and

 (ii) the money, accounts, securities, securities accounts, virtual assets or other property being held or managed is for payments reasonably incidental to the provision by the business of a service that is not a designated service;

 (c) the money, accounts, securities, securities accounts, virtual assets or other property being held or managed is to be received or payable under an order of a court or tribunal;

 (d) the service provided by the business is the receipt or disbursement of a payment mentioned in subsection (5D);

 (e) the service is any other designated service;

 (f) a circumstance specified in the AML/CTF Rules.

Note: An example of a circumstance to which paragraph (b) applies is fees paid to a barrister for representation in legal proceedings or property management services.

 (5D) For the purposes of paragraph (5C)(d), the payments are:

 (a) a payment to or from any of the following:

 (i) a government body;

 (ii) a court or tribunal of the Commonwealth, a State, a Territory or a foreign country;

 (iii) a public international organisation;

 (iv) a person who is licensed under a law of the Commonwealth, a State or a Territory to provide insurance, including self‑insured licensees; or

 (b) a payment of a kind specified in the AML/CTF Rules.

 (5E) For the purposes of item 7 of the table in subsection (5B), the circumstances are:

 (a) acting, or arranging for another person to act, in a fiduciary capacity pursuant to, or as a result of, an order of a court or a tribunal; or

 (b) acting as the trustee of a regulated debtor’s estate (within the meaning of Schedule 2 to the Bankruptcy Act 1966); or

 (c) a circumstance specified in the AML/CTF Rules.

10A  Before subsection 6(7)

Services provided by barristers on instructions of a solicitor

 (6B) Despite anything in this section, a service is not a designated service if the service is provided by a person in the course of legal practice as a barrister on the instructions of a solicitor, if the instructions are given in connection with the provision of a designated service.

Part 4—Transitional provisions

11  Delayed application of certain provisions of this Act

(1) The following provisions of the Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006 do not apply, until 1 July 2026, to a reporting entity in its capacity as an entity that provides a designated service covered by item 2 of table 2, or an item of table 5 or 6, in section 6 of that Act:

 (a) Part 1A (which deals with AML/CTF programs);

 (b) Part 2 (which deals with customer due diligence);

 (c) Part 3 (which deals with reporting obligations);

 (d) Divisions 2 to 6 of Part 10 (which deal with record keeping).

(2) Subject to anything else in this Act or in rules made under Schedule 12 to this Act (which deals with transitional rules), the remaining provisions of the Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006 apply, on and after the commencement of this item, to such a reporting entity.

12  Application provision—timing of enrolment

(1) This item applies to a person if:

 (a) the person provides, or commences to provide, a designated service covered by item 2 of table 2, or an item of table 5 or 6, in section 6 of the Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006 at any time before 1 July 2026; and

 (b) the person does not, as at that time, provide, or commence to provide, any other designated services.

(2) Subsection 51B(1) of the Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006 applies to the person, in relation to the designated service referred to in paragraph (1)(a) of this item, as if the reference in that subsection to 28 days after the day on which the person commences to provide the designated service were a reference to 29 July 2026.

Schedule 4—Legal professional privilege

legal professional privilege includes privilege under Division 1 of Part 3.10 of the Evidence Act 1995.

LPP form, in relation to information or a document, means a written notice that:

 (a) is in an approved form; and

 (b) specifies the basis on which the information or document is privileged from being given or produced on the ground of legal professional privilege; and

 (c) contains any other information required by the approved form; and

 (d) is accompanied by any documents required by the approved form.

2  After subsection 26Q(2)

 (2A) If:

 (a) a person is given a notice under subsection (1) in relation to one or more documents; and

 (b) the person reasonably believes that the documents are privileged from being produced on the ground of legal professional privilege;

the person must give the AUSTRAC CEO an LPP form in relation to the documents within the period specified in the request.

3  Subsection 26Q(3)

 (3) Subsections (2) and (2A) are civil penalty provisions.

4  Paragraph 41(2)(a)

After “applies”, insert “and paragraph (aa) of this subsection does not apply”.

5  After paragraph 41(2)(a)

 (aa) if:

 (i) paragraph (1)(d), (e), (f), (i) or (j) applies; and

 (ii) the reporting entity reasonably believes that some (but not all) of the information required to be contained in the report may be privileged from being given on the ground of legal professional privilege; and

 (iii) the privilege, if it exists, belongs to a person other than the reporting entity;

  5 business days after the day on which the reporting entity forms the relevant suspicion; or

6  After subsection 41(2)

 (2A) Despite subsection (2), the reporting entity may refuse to give the AUSTRAC CEO a report about the matter if the reporting entity reasonably believes that all of the information comprising the grounds on which the reporting entity holds the relevant suspicion is privileged from being given on the ground of legal professional privilege.

7  After paragraph 41(3)(a)

 (aa) if the reporting entity reasonably believes that some (but not all) of the information required to be contained in the report about the matter is privileged from being given on the ground of legal professional privilege—be accompanied by an LPP form in relation to the information; and

8  At the end of subsection 41(3)

Add:

Note 3: For other provisions dealing with legal professional privilege, see sections 242 and 242A.

9  After paragraph 43(3)(a)

 (aa) if the reporting entity reasonably believes that information required to be contained in the report about the transaction is privileged from being given on the ground of legal professional privilege—be accompanied by an LPP form in relation to the information; and

10  At the end of subsection 43(3)

Add:

Note 3: For other provisions dealing with legal professional privilege, see sections 242 and 242A.

11  Subsection 49(3)

 (3) Subsections (2) and (4) are civil penalty provisions.

 (4) If:

 (a) a person is given a notice under subsection (1) in relation to information or a document; and

 (b) the person reasonably believes that the information or document is privileged from being given or produced on the ground of legal professional privilege;

the person must give the AUSTRAC CEO an LPP form in relation to the information or document within the period specified in the notice.

12  Before paragraph 49B(5)(a)

 (aa) subsection (6A);

13  After subsection 49B(6)

 (6A) If:

 (a) a person is given a notice under subsection (2) in relation to information or a document; and

 (b) the person reasonably believes that the information or document is privileged from being given or produced on the ground of legal professional privilege;

the person must give the AUSTRAC CEO an LPP form in relation to the information or document within the period specified in the notice.

14  Subsection 49B(7)

 (7) Subsections (6) and (6A) are civil penalty provisions.

15  After paragraph 50(6)(a)

 (aa) if the reporting entity reasonably believes that information relating to the matter is privileged from being given on the ground of legal professional privilege—be accompanied by an LPP form in relation to the information; and

16  Subsection 50(6) (note)

Omit “Note”, substitute “Note 1”.

17  At the end of subsection 50(6)

Add:

Note 2: For other provisions dealing with legal professional privilege, see sections 242 and 242A.

18  At the end of section 75N

Add:

 (a) a person is given a request under subsection (1) in relation to information; and

 (b) the person reasonably believes that the information is privileged from being given on the ground of legal professional privilege;

the person must give the AUSTRAC CEO an LPP form in relation to the information within the period specified in the request.

19  At the end of section 76Q

Add:

 (a) a person is given a request under subsection (1) in relation to information; and

 (b) the person reasonably believes that the information is privileged from being given on the ground of legal professional privilege;

the person must give the AUSTRAC CEO an LPP form in relation to the information within the period specified in the request.

Note 1: For other provisions dealing with legal professional privilege, see sections 242 and 242A.

20  Subsection 167(4) (at the end of the heading)

Add “etc.”.

21  After paragraph 167(4)(a)

 (aa) subsection (5);

 (ab) subsection (6);

22  At the end of section 167

Add:

 (a) a person is given a notice under subsection (2) in relation to information, a document or a copy of a document; and

 (b) the person reasonably believes that the information, document or copy is privileged from being given or produced on the ground of legal professional privilege;

the person must give the AUSTRAC CEO an LPP form in relation to the information, document or copy within the period specified in the notice.

 (6) Subsection (5) is a civil penalty provision.

23  Subsection 184(4) (after paragraph (ae) of the definition of designated infringement notice provision)

 (af) subsection 26Q(2A) (which deals with providing an LPP form in relation to certain further information requested);

24  Subsection 184(4) (after paragraph (f) of the definition of designated infringement notice provision)

 (fa) subsection 49(4) (which deals with providing an LPP form in relation to information or documents requested);

25  Subsection 184(4) (after paragraph (fb) of the definition of designated infringement notice provision)

 (fc) subsection 49B(6A) (which deals with providing an LPP form in relation to information or documents requested);

 (fd) subsection 50(4) (which deals with providing certain reports about a card issuer’s response, or lack of response to the AUSTRAC CEO);

 (fe) subsection 50(5) (which deals with providing certain reports about a card issuer’s response, or lack of response to the Commissioner of Taxation);

26  Subsection 184(4) (after paragraph (fh) of the definition of designated infringement notice provision)

 (fi) subsection 75N(3) (which deals with providing an LPP form in relation to certain further information requested);

 (fj) subsection 76Q(3) (which deals with providing an LPP form in relation to certain further information requested);

27  At the end of subsection 184(4) (at the end of the definition of designated infringement notice provision)

Add:

 ; (i) subsection 167(5) (which deals with providing an LPP form in relation to certain information or documents to be provided to an authorised officer);

 (j) subsection 202(5) (which deals with reporting entities providing an LPP form in relation to certain information or documents requested by notice).

28  At the end of section 202

Add:

 (a) a person is given a notice under subsection (2) in relation to information or a document; and

 (b) the person reasonably believes that the information or document is privileged from being given or produced on the ground of legal professional privilege;

the person must give the AUSTRAC CEO an LPP form in relation to the information or document within the period specified in the notice.

 (6) Subsection (5) is a civil penalty provision.

29  After paragraph 203(e)

 (ea) set out the effect of subsections 202(5) and (6) (information or documents privileged from being given or produced on the ground of legal professional privilege); and

30  Section 242

242  Legal professional privilege

 (1) Nothing in this Act affects the right of a person to refuse to give information (including by answering a question) or produce a document if:

 (a) the information would be privileged from being given on the ground of legal professional privilege; or

 (b) the document would be privileged from being produced on the ground of legal professional privilege.

 (2) The fact that a person has provided a description of information or documents that may be or are privileged from being given or produced on the ground of legal professional privilege does not, of itself, amount to a waiver of the privilege.

242A  Guidelines in relation to legal professional privilege

 (1) The Minister may, by notifiable instrument, make guidelines in relation to making or dealing with claims or assertions of legal professional privilege in relation to information or documents required to be given under or for the purposes of this Act.

 (2) Without limiting subsection (1), the guidelines may deal with the following matters:

 (a) arrangements for making or dealing with claims or assertions of legal professional privilege in relation to the exercise of other powers under this Act, including the use of LPP forms;

 (b) facilitating the resolution of disputes in relation to legal professional privilege.

 (3) Before making guidelines under subsection (1), the Minister must consult with such persons (if any) as the Minister considers appropriate.

Schedule 5—Tipping off offence and disclosure of AUSTRAC information to foreign countries or agencies

Division 1—Tipping off offence

 (a) definition of AGO;

 (b) definition of ASD;

 (c) definition of ASIO;

 (d) definition of ASIS;

 (e) definition of Attorney‑General’s Department;

 (f) definition of corporate group;

 (g) definition of Department of Foreign Affairs and Trade;

 (h) definition of DIO;

 (i) definition of ONI.

2  Section 123

123  Offence of tipping off

Offence

 (1) A person commits an offence if:

 (a) the person is or has been:

 (i) a reporting entity; or

 (ii) an officer, employee or agent of a reporting entity; or

 (iii) required by a notice under subsection 49(1) to give information or produce documents; or

 (iv) required by notice under subsection 49B(2) to give information or produce documents; and

 (b) the person discloses information to another person (other than an AUSTRAC entrusted person); and

 (c) the information is covered by subsection (2); and

 (d) the disclosure of the information would or could reasonably be expected to prejudice an investigation:

 (i) of an offence against a law of the Commonwealth or of a State or Territory; or

 (ii) for the purposes of the Proceeds of Crime Act 2002 or regulations under that Act; or

 (iii) for the purposes of a law of a State or Territory that corresponds to the Proceeds of Crime Act 2002 or regulations under that Act.

Penalty: Imprisonment for 2 years or 120 penalty units, or both.

 (2) Information is covered by this subsection if it is any of the following:

 (a) that a reporting entity has given, or is required to give, a report under subsection 41(2);

 (b) a report given under, or prepared for the purposes of, subsection 41(2);

 (c) a copy of such a report;

 (d) a document purporting to set out information (including the formation or existence of a suspicion) contained in such a report;

 (e) a person is or has been required by a notice under subsection 49(1) to give information or produce a document;

 (f) a person has given information or produced a document in response to a notice under subsection 49(1);

 (g) a person is or has been required by a notice under subsection 49B(2) to give information or produce a document;

 (h) a person has given information or produced a document in response to a notice under subsection 49B(2);

 (i) information referred to in paragraph 16(5A)(a), (b) or (c) or (5AA)(a) or (b) of the Financial Transaction Reports Act 1988, as in force immediately before its repeal.

 (3) For the purposes of paragraph (1)(d), it is immaterial whether an investigation has commenced.

Exception—crime prevention

 (4) Subsection (1) does not apply to the disclosure of information covered by paragraphs (2)(a), (b), (c) or (d) by a person if:

 (a) the person is a reporting entity, or an officer, employee or agent of a reporting entity, that is:

 (i) a legal practitioner (however described); or

 (ii) a partnership or company that carries on a business of using legal practitioners (however described) to supply professional legal services; or

 (iii) a qualified accountant; or

 (iv) a partnership or company that carries on a business of using qualified accountants to supply professional accountancy services; or

 (v) a person specified in the AML/CTF Rules; and

 (b) the information relates to the affairs of a customer of the reporting entity; and

 (c) the person makes the disclosure, in good faith, for the purposes of dissuading the customer from engaging in conduct that constitutes, or could constitute, an offence against a law of the Commonwealth or of a State or Territory.

Note: A defendant bears an evidential burden in relation to the matter in subsection (4) (see subsection 13.3(3) of the Criminal Code).

Exception—information sharing to detect, deter or disrupt money laundering, the financing of terrorism, proliferation financing, or other serious crimes

 (5) Subsection (1) does not apply if:

 (a) the disclosure is made to another reporting entity; and

 (b) the disclosure is made for the purpose of detecting, deterring, or disrupting money laundering, the financing of terrorism, proliferation financing, or other serious crimes; and

 (c) the conditions prescribed by the regulations are met.

Note: A defendant bears an evidential burden in relation to the matter in subsection (5) (see subsection 13.3(3) of the Criminal Code).

Courts and Tribunals

 (6) Except where it is necessary to do so for the purposes of giving effect to this Act, a person is not to be required to disclose to a court or tribunal information mentioned in subsection (2).

Division 2—Disclosure of AUSTRAC information to foreign countries or agencies

3  Paragraph 126(2)(a)

 (a) both of the following apply:

 (i) the making of the record, disclosure or use is for the purposes of, or in connection with, the performance or exercise of the person’s functions, duties or powers as an official of a Commonwealth, State or Territory agency;

 (ii) the disclosure is not to the government of a foreign country or to a foreign agency; or

4  Paragraph 127(2)(a)

Omit “referred to in subsection (3)”, substitute “prescribed by the AML/CTF Rules”.

5  Subsection 127(3)

6  Subsection 127(4)

Omit “referred to in subsection (3)”, substitute “prescribed by the AML/CTF Rules for the purposes of paragraph 127(2)(a)”.

Intelligence Services Legislation Amendment Act 2024

7  Item 94 of Schedule 1

Repeal the item.

Schedule 6—Services relating to virtual assets

2  Section 5 (paragraph (a) of the definition of betting instrument)

3  Section 5

casino means a casino operating under a licence granted under a law of a State or a Territory.

4  Section 5 (definition of digital currency)

5  Section 5 (definition of Digital Currency Exchange Register)

6  Section 5 (definition of property)

Omit “digital currency”, substitute “a virtual asset”.

7  Section 5 (definition of registered digital currency exchange provider)

registered virtual asset service provider means a person registered under section 76E as a virtual asset service provider.

9  Section 5 (definition of registrable digital currency exchange service)

registrable virtual asset service means a designated service that:

 (a) is either of the following:

 (i) a designated service covered by item 46A, 50A, 50B or 50C of table 1 in section 6;

 (ii) a designated service covered by item 29 or 30 of that table, if the transfer of value involves the transfer of a virtual asset (whether or not it also involves the transfer of money or property); and

 (b) is not provided by a financial institution or a casino; and

 (c) is not of a kind specified in the AML/CTF Rules.

11  Section 5 (paragraph (b) of the definition of registration)

12  Section 5 (definition of stored value card)

stored value card means a thing (whether real or virtual):

 (a) that stores monetary value other than physical currency; or

 (b) that gives access to monetary value stored in a form other than physical currency; or

 (c) that is prescribed by the AML/CTF Rules;

but does not include:

 (d) a debit card or a credit card; or

 (e) an account for the purposes of items 1 to 3 of table 1 in section 6 or items 11 to 13 of table 3 in section 6; or

 (f) unless prescribed by the AML/CTF Rules for the purposes of paragraph (c):

 (i) a thing that is intended to give access to monetary value in a debit card or credit card account; or

 (ii) a gaming chip or token, or a betting instrument; or

 (iii) a virtual asset (whether or not pegged to any currency); or

 (iv) a thing that stores, or gives access to, virtual assets (whether or not pegged to any currency); or

 (v) a card or other thing that is only used to store or access monetary value for the purposes of purchasing an entry into a lottery or redeeming winnings in respect of a lottery, where the monetary value is denominated in a currency, or is pegged by its issuer to a currency, stored in a form other than physical currency; or

 (g) a thing that, under the AML/CTF Rules, is taken not to be a stored value card.

13  Section 5 (subparagraph (ca)(i) of the definition of threshold transaction)

Omit “digital currency”, substitute “a virtual asset”.

14  Section 5 (paragraph (ca) of the definition of threshold transaction)

After “amount” (wherever occurring), insert “or value”.

15  Section 5 (note 2 to the definition of threshold transaction)

16  Section 5

virtual asset has the meaning given by section 5B.

virtual asset safekeeping service:

 (a) means a service in which virtual assets or private keys are controlled or managed for or on behalf of a person (the customer) or another person nominated by the customer under an arrangement between the provider of the service and the customer, or between the provider of the service and another person with whom the customer has an arrangement (whether or not there are also other parties to any such arrangement); but

 (b) does not include a service of a kind prescribed by the AML/CTF Rules.

Virtual Asset Service Provider Register has the meaning given by section 76B.

17  Before section 6

5B  Meaning of virtual asset

 (1) A virtual asset is a digital representation of value that:

 (a) functions as any of the following:

 (i) a medium of exchange;

 (ii) a store of economic value;

 (iii) a unit of account;

 (iv) an investment; and

 (b) is not issued by or under the authority of a government body; and

 (c) may be transferred, stored or traded electronically.

 (2) A virtual asset is a digital representation of value that:

 (a) enables a person to vote on the management, administration or governance of arrangements connected with a digital representation of value; and

 (b) is not issued by or under the authority of a government body; and

 (c) may be transferred, stored or traded electronically.

 (3) A virtual asset is a digital representation of value of a kind prescribed by the AML/CTF Rules.

 (4) However, the following are not virtual assets:

 (a) money;

 (b) a digital representation of value used exclusively within an electronic game;

 (c) customer loyalty or reward points;

 (d) a digital representation of value that is:

 (i) similar to a thing mentioned in paragraph (b) or (c); and

 (ii) not intended by the issuer to be convertible into another digital representation of value or money;

 (e) a digital representation of value prescribed by the AML/CTF Rules.

18  Subsection 6(2) (after table item 46)

| 46A | providing a virtual asset safekeeping service, where the service is provided in the course of carrying on a business as a virtual asset service provider | the customer of the service |

19  Subsection 6(2) (table item 50A)

Repeal the table item, substitute:

| 50A | exchanging, or making arrangements for the exchange of:<br>(a) a virtual asset for money (whether Australian or not); or<br>(b) money (whether Australian or not) for a virtual asset;<br>for a person, in the course of carrying on a business as a virtual asset service provider | the person whose virtual asset or money is exchanged |

20  Subsection 6(2) (after table item 50A)

| 50B | exchanging, or making arrangements for the exchange of, a virtual asset for another virtual asset (whether or not of the same or a different kind) in the course of carrying on a business as a virtual asset service provider | the person whose virtual asset is exchanged | | 50C | providing a designated service mentioned in another item of this table in connection with the offer or sale of a virtual asset, where the service is provided in the course of carrying on a business participating in the offer or sale | the customer mentioned in the item |

21  Subsection 6(4) (cell at table item 7, column headed “Provision of a designated service”)

22  Subsection 6(4) (cell at table item 7, column headed “Customer of the designated service”)

Omit “digital currency is”, substitute “virtual assets are”.

23  Subsection 6(4) (cell at table item 8, column headed “Provision of a designated service”)

24  Section 19

19  Translation of virtual assets to Australian currency

  In determining, for the purposes of this Act, whether the value of a virtual asset is not less than an Australian dollar amount, the value of the virtual asset is to be translated to Australian currency in accordance with the method specified in the AML/CTF Rules.

25  Part 6A (heading)

26  Section 76

Omit “digital currency exchange” (wherever occurring), substitute “virtual asset”.

27  Section 76

28  Division 2 of Part 6A (heading)

29  Section 76A (heading)

30  Subsection 76A(1)

Registrable virtual asset services

 (1) A person (the first person) must not provide a registrable virtual asset service to another person if the first person is not a registered virtual asset service provider.

31  Subsection 76A(2)

32  Section 76B (heading)

33  Subsections 76B(1), (2) and (3)

34  Subsection 76B(4)

Omit “Digital Currency Exchange” (wherever occurring), substitute “Virtual Asset Service Provider”.

35  Section 76C (heading)

36  Section 76C

37  Subsection 76D(1)

38  Paragraph 76G(2)(a)

39  Paragraph 76G(2)(b)

Omit “volume of digital currency”, substitute “volume of virtual assets”.

40  Paragraph 76G(2)(b)

41  Paragraph 76G(2)(c)

Omit “digital currencies”, substitute “virtual assets”.

42  Paragraph 76G(2)(d)

43  Paragraph 76H(1)(b)

44  Subsection 76J(2)

45  Paragraphs 76K(2)(d) and 76L(2)(d)

46  Section 76M (heading)

47  Subsection 76M(1)

48  Subsections 76M(1), (2) and (3)

49  Section 76R

50  Subsections 142(1) and (2)

51  Paragraph 142(3)(a)

52  Paragraph 184(1A)(e)

53  Paragraph 228A(2)(c)

54  Section 233B (table item 3A)

55  Section 338 (paragraph (ea) of the definition of account)

 (ea) an account relating to a *virtual asset, including:

 (i) an account representing an amount, or the value, of a virtual asset; and

 (ii) an account provided as part of a *registrable virtual asset service.

56  Section 338 (paragraph (h) of the definition of account)

 (h) in the case of an account relating to a virtual asset—the balance of the account is expressed as an amount, or the value, of the virtual asset, or an amount of Australian currency or any other currency.

57  Section 338 (definitions of digital currency and digital currency exchange)

Repeal the definitions.

58  Section 338 (paragraph (i) of the definition of financial institution)

Omit “*digital currency exchange”, substitute “*registrable virtual asset service”.

59  Section 338

registrable virtual asset service has the meaning given by the Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006.

virtual asset has the meaning given by the Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006.

Schedule 7—Definition of bearer negotiable instrument

1  Section 17

17  Bearer negotiable instruments

 (1) A bearer negotiable instrument is an instrument that is one of the following that is payable to bearer:

 (a) a bill of exchange;

 (b) a cheque;

 (c) a promissory note;

 (d) a bearer bond;

 (e) a traveller’s cheque;

 (f) a money order, postal order or similar order;

 (g) a negotiable instrument not covered by any of the above paragraphs.

 (2) Without limiting subsection (1), an instrument is payable to bearer if the instrument:

 (a) is endorsed without restriction; or

 (b) does not express a payee; or

 (c) is payable to a fictitious person; or

 (d) is otherwise in such form that title to the instrument passes on delivery.

Schedule 8—Transfers of value and international value transfer services

Part 1—Transfers of value

Omit “Electronic funds transfer instructions”, substitute “Transfers of value”.

Omit “transferred money”, substitute “transferred value”.

3  Section 4

Omit “registrable designated remittance services”, substitute “registrable remittance services”.

4  Section 5 (definition of batched electronic funds transfer instruction)

5  Section 5 (definition of beneficiary institution)

beneficiary institution: see subsections 63A(5) to (8).

6  Section 5

 (a) definition of complete payer information;

 (b) definition of designated remittance arrangement;

 (c) definition of electronic funds transfer instruction;

 (d) definition of funds transfer chain.

7  Section 5

institution: see subsection 63A(12).

intermediary institution: see subsections 63A(9) and (10).

 (a) definition of multiple‑institution person‑to‑person electronic funds transfer instruction;

 (b) definition of multiple‑institution same‑person electronic funds transfer instruction;

 (c) definition of non‑financier.

9  Section 5 (definition of ordering institution)

ordering institution: see subsections 63A(1) to (4).

 (a) definition of payee;

 (b) definition of payer.

11  Section 5 (definition of registrable designated remittance service)

12  Section 5

registrable remittance service means a designated service that:

 (a) is covered by item 29 or 30 of table 1 in section 6; and

 (b) is provided by a person (other than a financial institution or casino) at or through a permanent establishment of the person in Australia; and

 (c) does not involve a transfer of virtual assets; and

 (d) is not of a kind specified in the AML/CTF Rules.

13  Section 5

 (a) definition of remittance arrangement;

 (b) definition of required transfer information;

 (c) definition of same‑institution person‑to‑person electronic funds transfer instruction;

 (d) definition of same‑institution same‑person electronic funds transfer instruction;

 (e) definition of tracing information.

14  Section 5

transfer message, for a transfer of value, means a message that contains information relating to the content of the payer’s instruction for the transfer of value, but does not include a message of a kind specified in the AML/CTF Rules.

transfer of value means a transfer of money, virtual assets or property, but does not include:

 (a) a transfer of physical currency or other tangible property; or

 (b) a transfer of a kind specified in the AML/CTF Rules.

15  Section 5

 (a) definition of transferor entity;

 (b) definition of ultimate transferee entity;

 (c) definition of unique reference number.

16  Section 5

value transfer chain: see subsection 63A(11).

17  Subsection 6(2) (table items 29 to 32)

Repeal the items, substitute:

| 29 | in the capacity of ordering institution, accepting an instruction for the transfer of value on behalf of a payer | the payer | | 30 | in the capacity of beneficiary institution, in relation to a transfer of value, making the transferred value available to a payee | the payee | | 31 | in the capacity of intermediary institution, passing on a transfer message for a transfer of value in a value transfer chain to another intermediary institution or to the beneficiary institution | the ordering institution or intermediary institution from which the transfer message is received (as the case may be) |

18  Subsection 6(2) (table item 32A, column headed “Provision of a designated service”, paragraph (a))

Omit “31 or 32”, substitute “29 or 30”.

19  Subsection 6(2) (table item 32A, column headed “Provision of a designated service”, paragraph (b))

Omit “a non‑financier”, substitute “not a financial institution”.

20  Sections 8 to 10

Repeal the sections.

21  Part 5 (heading)

Repeal the heading, substitute:

Part 5—Obligations relating to transfers of value

22  Divisions 1 to 3 of Part 5

Repeal the Divisions, substitute:

63  Simplified outline

  The following is a simplified outline of this Part.

         An ordering institution, a beneficiary institution and an intermediary institution in a transfer of value must fulfil certain obligations in relation to the transfer.

         The obligations of an ordering institution relate to the information the institution collects, verifies and provides as part of the transfer.

         The obligations of a beneficiary institution relate to the information the institution receives or otherwise obtains as part of the transfer.

         The obligations of an intermediary institution relate to the information the institution receives and provides as part of the transfer.

         Additional obligations apply if the transfer of value is a transfer of a virtual asset.

63A  Key terms relating to transfers of value

Ordering institutions

 (1) Whether a person is an ordering institution is to be determined in accordance with the AML/CTF Rules.

 (2) Without limiting subsection (1), AML/CTF Rules made for the purposes of that subsection may specify the following:

 (a) criteria or other requirements that a person must satisfy to be an ordering institution;

 (b) circumstances in which a person is an ordering institution.

 (4) However, none of the following persons are an ordering institution:

 (a) a person who transfers value in circumstances where the transfer is reasonably incidental to the provision of another service unless:

 (i) the person is a financial institution; or

 (ii) the person is providing an international value transfer service incidentally to a designated service covered by item 50, 50A or 50B of table 1 in section 6; or

 (iii) the person is providing an international value transfer service incidentally to a designated service covered by table 3 in section 6;

 (b) a person specified in the AML/CTF Rules.

Beneficiary institutions

 (5) Whether a person is a beneficiary institution is to be determined in accordance with the AML/CTF Rules.

 (6) Without limiting subsection (5), AML/CTF Rules made for the purposes of that subsection may specify the following:

 (a) criteria or other requirements that a person must satisfy to be a beneficiary institution;

 (b) circumstances in which a person is a beneficiary institution.

 (8) However, none of the following persons are a beneficiary institution:

 (a) a person who makes value available in circumstances where the making available of the value is reasonably incidental to the provision of another service unless:

 (i) the person is a financial institution;

 (ii) the person is providing an international value transfer service incidentally to a designated service covered by item 50, 50A or 50B of table 1 in section 6;

 (iii) the person is providing an international value transfer service incidentally to a designated service covered by table 3 in section 6;

 (b) a person specified in the AML/CTF Rules.

Intermediary institution

 (9) A person is an intermediary institution if the person:

 (a) in the course of carrying on a business, receives and passes on a transfer message for a transfer of value in a value transfer chain; or

 (b) is specified in the AML/CTF Rules.

 (10) However, none of the following persons are an intermediary institution:

 (a) a person who solely provides the infrastructure that permits persons to send transfer messages for a transfer of value to another person in the value transfer chain;

 (b) a person who is specified in the AML/CTF Rules.

Value transfer chain

 (11) The following persons are taken to form a value transfer chain:

 (a) the ordering institution;

 (b) each intermediary institution (if any) between the ordering institution and the beneficiary institution;

 (c) the beneficiary institution.

Institutions

 (12) Each person in a value transfer chain is an institution.

Payer and payee may be same person etc.

 (13) For the purposes of this Act:

 (a) the payer and the payee in relation to a transfer of value may be the same person; and

 (b) the ordering institution and the beneficiary institution in relation to a transfer of value may be the same person.

Division 2—Obligations of institutions

64  Obligations of ordering institutions

 (1) This section applies if an ordering institution commences to provide the designated service covered by item 29 of table 1 in section 6.

Note 1: For exemptions, see sections 67 and 67A.

Note 2: An ordering institution may also have obligations under the Autonomous Sanctions Act 2011 and the Charter of the United Nations Act 1945 in relation to persons designated for targeted financial sanctions.

Obligations of ordering institution

 (2) Before the ordering institution passes on a transfer message for the transfer of value, or otherwise gives effect to the transfer of value, the ordering institution must:

 (a) collect the information specified in the AML/CTF Rules; and

 (b) if required by the AML/CTF Rules—verify the information specified in the AML/CTF Rules in accordance with sections 28 and 30 (as applicable).

 (3) If the ordering institution and the beneficiary institution for the transfer of value are not the same person, the ordering institution must pass on the information specified in the AML/CTF Rules relating to the transfer of value to the next institution in the value transfer chain.

 (4) If the transfer message for the transfer of value does not give effect to the transfer of value then, for the purposes of subsection (3), the message must be passed on before, or at the same time as, the ordering institution gives effect to the transfer of value.

 (5) The ordering institution must provide the following information to another institution in the value transfer chain as soon as practicable after receiving a request from the institution for that information:

 (a) the information specified by the AML/CTF Rules for the purposes of paragraph (2)(a);

 (b) the information specified by the AML/CTF Rules for the purposes of subsection (3).

 (6) AML/CTF Rules made for the purposes of this section may make different provision in relation to different kinds of institutions, information, circumstances or any other matter. This does not limit subsection 33(3A) of the Acts Interpretation Act 1901.

 (7) Subsections (2), (3) and (5) are civil penalty provisions.

65  Obligations of beneficiary institutions

 (1) This section applies if a beneficiary institution commences to provide the designated service covered by item 30 of table 1 in section 6 to a payee.

Note: For exemptions, see sections 67 and 67A.

Obligations of beneficiary institution

 (2) The beneficiary institution must take reasonable steps to monitor:

 (a) whether it has received the information specified in the AML/CTF Rules relating to the transfer of value; and

 (b) whether the information received about the payee is accurate.

 (a) the beneficiary institution:

 (i) detects that it has not received all of the information mentioned in paragraph (2)(a); and

 (ii) has not otherwise obtained the information; or

 (b) the beneficiary institution detects that some or all of the information received or otherwise obtained about the payee is not accurate;

then the beneficiary institution must, in accordance with its AML/CTF program, do at least one of the following:

 (c) refuse to make the transferred value available to the payee;

 (d) take such other action as the beneficiary institution determines.

Note: See also section 26G (reporting entities must comply with AML/CTF policies).

 (4) AML/CTF Rules made for the purposes of this section may make different provision in relation to different kinds of institutions, information, circumstances or any other matter. This does not limit subsection 33(3A) of the Acts Interpretation Act 1901.

 (5) Subsection (2) is a civil penalty provision.

66  Obligations of intermediary institutions

 (1) This section applies if an intermediary institution commences to provide the designated service covered by item 31 of table 1 in section 6 in relation to a transfer of value.

Note 1: For exemptions, see section 67.

Note 2: An intermediary institution may also have obligations under the Autonomous Sanctions Act 2011 and the Charter of the United Nations Act 1945 in relation to persons designated for targeted financial sanctions.

Obligations of intermediary institutions

 (2) The intermediary institution must take reasonable steps to monitor whether it has received the information specified in the AML/CTF Rules relating to the transfer of value.

 (3) If the intermediary institution detects that it has not received all of the information mentioned in subsection (2), and the intermediary institution has not otherwise obtained the information, the intermediary institution must, in accordance with its AML/CTF program, do at least one of the following:

 (a) refuse to pass on the transfer message for the transfer of value;

 (b) take such other action as the intermediary institution determines.

Note: See also section 26G (reporting entities must comply with AML/CTF policies).

 (4) In passing on a transfer message for a transfer of value, the intermediary institution must include:

 (a) information, of a kind specified in the AML/CTF Rules, that is received from the previous institution in the value transfer chain; or

 (b) information obtained in accordance with the intermediary institution’s AML/CTF program that is relevant to the transfer.

 (5) The intermediary institution must provide the information referred to in subsection (4) to another institution in the value transfer chain as soon as practicable after receiving a request from the institution for that information.

 (6) AML/CTF Rules made for the purposes of this section may make different provision in relation to different kinds of institutions, information, circumstances or any other matter. This does not limit subsection 33(3A) of the Acts Interpretation Act 1901.

 (7) Subsections (2), (4) and (5) are civil penalty provisions.

66A  Obligations of ordering and beneficiary institutions relating to virtual asset transfers

 (1) This section applies to the transfer of a virtual asset.

Ordering institution obligations

 (2) Before commencing to provide the designated service covered by item 29 of table 1 in section 6, an ordering institution must undertake due diligence to determine, on reasonable grounds, whether the virtual asset wallet to which the virtual asset is being transferred is:

 (a) a custodial wallet controlled by a person who is licensed or registered under a law that gives effect to the FATF Recommendations; or

 (b) a custodial wallet controlled by a person who is not required to be licensed or registered under a law that gives effect to the FATF Recommendations; or

 (c) a custodial wallet controlled by a person who is required to be licensed or registered under a law that gives effect to the FATF Recommendations, but is not so licensed or registered; or

 (d) a self‑hosted wallet controlled by the payee.

 (3) The ordering institution must pass on the information specified in the AML/CTF Rules for the purposes of subsection 64(3) relating to the transfer of value to a beneficiary institution if the beneficiary institution is:

 (a) a person who is licensed or registered under a law that gives effect to the FATF Recommendations; or

 (b) a person who is not required to be licensed or registered under a law that gives effect to the FATF Recommendations.

 (4) An ordering institution must not provide the designated service covered by item 29 of table 1 in section 6 if this would involve passing on a transfer message for a transfer of value to a person:

 (a) who is required to be licensed or registered under a law that gives effect to the FATF Recommendations; but

 (b) is not so licensed or registered.

Beneficiary institution obligations

 (5) Before commencing to provide the designated service covered by item 30 of table 1 in section 6, a beneficiary institution must undertake due diligence to determine, on reasonable grounds, whether the virtual asset wallet from which the virtual asset has been transferred is:

 (a) a custodial wallet controlled by a person who is licensed or registered under a law that gives effect to the FATF Recommendations; or

 (b) a custodial wallet controlled by a person who is not required to be licensed or registered under a law that gives effect to the FATF Recommendations; or

 (c) a custodial wallet controlled by a person who is required to be licensed or registered under a law that gives effect to the FATF Recommendations, but is not so licensed or registered; or

 (d) a self‑hosted wallet controlled by the payer.

 (6) A beneficiary institution must not provide the designated service covered by item 30 of table 1 in section 6 in relation to a transfer of value until the beneficiary institution has received or otherwise obtained the information specified in the AML/CTF Rules for the purposes of subsection 65(2) in relation to the transfer.

 (7) A beneficiary institution must not provide the designated service covered by item 30 of table 1 in section 6 if:

 (a) the virtual asset wallet from which the virtual asset has been transferred is a custodial wallet controlled by a person who is required to be licensed or registered under a law that gives effect to the FATF Recommendations; and

 (b) the person is not so licensed or registered.

 (8) Subsections (2) to (7) are civil penalty provisions.

Exceptions

 (9) Subsection (3) does not apply if:

 (a) either:

 (i) the ordering institution has established on reasonable grounds that the beneficiary institution is not capable of receiving the information securely; or

 (ii) the ordering institution reasonably believes that there is a risk that the beneficiary institution is not capable of safeguarding the confidentiality of the information; and

 (b) the ordering institution makes and keeps a record of the reasons for not passing on the information.

 (10) Subsection (6) does not apply if:

 (a) the beneficiary institution has established on reasonable grounds that an institution in the value transfer chain is not capable of passing on the information securely; and

 (b) in accordance with the beneficiary institution’s AML/CTF program, the beneficiary institution appropriately identifies, assesses, mitigates and manages the risks of money laundering, financing of terrorism and proliferation financing that the beneficiary institution may reasonably face in providing the designated service.

 (11) A person who wishes to rely on subsection (9) or (10) bears an evidential burden in relation to that matter.

23  Section 67

67  Exemptions—general

 (1) The AML/CTF Rules may provide that this Part, or a specified provision of this Part, does not apply:

 (a) to a specified kind of designated service; or

 (b) to a transfer of value that occurs in specified circumstances.

 (2) AML/CTF Rules made for the purposes of subsection (1) may make different provision in relation to different kinds of institutions, information, circumstances or any other matter. This does not limit subsection 33(3A) of the Acts Interpretation Act 1901.