5‑18 Policies relating to the obligation5‑18 Policies relating to the obligations of beneficiary institutions

5‑18 Policies relating to the obligations of beneficiary institutions

Scope (1) This section applies if a reporting entity is to provide a designated service covered by item 30 of table 1 in section 6 of the Act as a beneficiary institution to a payee. Policies relating to all transfers of value (2) For the purposes of paragraph 26F(3)(e) of the Act, the AML/CTF policies of a reporting entity must deal with the following: (a) the steps that the reporting entity will take to monitor: (i) whether the reporting entity has received the information specified in section 8‑4 of this instrument relating to the transfer of value; and (ii) whether the information received about the payee is accurate; (b) determining whether to make the transferred value available to the payee in the circumstances described in subsection 65(3) of the Act; (c) determining whether to request further information from another institution in the value transfer chain in the circumstances described in subsection 65(3) of the Act.

Note: Subsection 66A(6) of the Act prohibits a beneficiary institution from providing the designated service in relation to the transfer of a virtual asset if it has not received or otherwise obtained all of the information, unless the exception in subsection 66A(10) applies.

Policies relating to virtual asset transfers (3) The AML/CTF policies of the reporting entity must also deal with the following if the designated service is to be provided in relation to the transfer of a virtual asset: (a) how the reporting entity will undertake due diligence to determine, for the purposes of subsection 66A(2) of the Act: (i) whether the wallet from which the virtual asset is being transferred is a custodial wallet or a self‑hosted wallet; and (ii) if the wallet is a custodial wallet—whether the person who controls the wallet is required to be licensed or registered under a law that gives effect to the FATF Recommendations, and, if the person is so required, whether the person is so licensed or registered; (b) if the person who controls the wallet is a person who is licensed or registered under a law that gives effect to the FATF Recommendations, or a person not required to be so licensed or registered—how the reporting entity will determine whether the ordering institution, and any intermediary institution, is capable of securely passing on the information specified in section 8‑4 of this instrument relating to the transfer of value; (c) if the wallet is a self‑hosted wallet—how the reporting entity will identify the payer, and any steps the reporting entity will take to verify the person who controls the wallet; (d) how the reporting entity will manage and mitigate the ML/TF risk of transferring the virtual asset if the person who controls the wallet is: (i) the payer (in a case where the person who controls the wallet has not been verified); or (ii) a person not required to be licensed or registered under a law that gives effect to the FATF Recommendations; or (iii) a person licensed or registered under a law that gives effect to the FATF Recommendations, in a case where the ordering institution or any intermediary institution is not capable of securely passing on information.