Australian Transaction Reports and Analysis Centre Industry Contribution (Collection) Act 2011

Leviable entity. The term has the same meaning as in the Australian Transaction Reports and Analysis Centre Industry Contribution Act 2011 (section 6). The collection Act does not itself define which entities are leviable; that is determined by the imposition Act. Typically, leviable entities are those regulated by AUSTRAC under the anti-money laundering and counter-terrorism financing framework, such as remittance service providers, gambling operators, bullion dealers, digital currency exchanges, and other reporting entities.

Levy. The levy imposed by the Australian Transaction Reports and Analysis Centre Industry Contribution Act 2011 (section 6). This is a cost‑recovery levy intended to fund AUSTRAC’s supervisory activities. It is not a tax in the ordinary sense, but section 13 makes clear that general tax exemptions do not apply to it.

Levy month. One of the 12 months of the calendar year (section 6). The late payment penalty accrues per levy month. If an instalment remains unpaid at the start of the month after it became due, a penalty for that month is triggered.

Late payment penalty. The penalty payable under section 9. The formula is simple: the amount of the instalment remaining unpaid at the start of the levy month, multiplied by 0.2 divided by 12. This yields a monthly rate of 1.667 per cent, equivalent to 20 per cent per annum on the outstanding balance. The penalty is due at the end of the levy month, but the CEO may extend that date by notice (section 9(3)). If the penalty is not paid, the unpaid penalty itself would presumably be taken into account in the next month’s calculation if it remains unpaid at the start of the next levy month, although the Act is not explicit on compounding. The penalty accrues monthly until the instalment is paid.

Person. Has the same meaning as in the Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006 (section 6). This includes individuals and bodies corporate, but also, critically, an extended meaning for partnerships, unincorporated associations and trusts. Under section 6(2), the Act applies to such entities as if they were a person, but with the modification that the obligation to pay levy and penalty is imposed on each partner, each member of the committee of management, or each trustee, respectively. However, any one of them can discharge the obligation. This means the AUSTRAC CEO can pursue any of the individuals for the full amount, even though only one payment is required.

Business day. Defined as a day that is not a Saturday, Sunday, public holiday or bank holiday in the place concerned (section 6). This is relevant for the due date of instalments and the operation of time periods.

AUSTRAC and AUSTRAC CEO. These terms have the same meanings as in the Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006 (section 6). AUSTRAC is the Australian Transaction Reports and Analysis Centre; the CEO is its chief executive officer.

Extraterritorial application. The Act extends to acts, omissions, matters and things outside Australia (section 5). This is significant for entities operating across borders. A leviable entity located overseas, or conducting activities partly outside Australia, may still be liable for levy if it is a leviable entity under the imposition Act. The collection Act’s mechanisms for notice, payment and enforcement apply extraterritorially.

Crown binding. The Act binds the Crown in each of its capacities (section 3). This includes the Commonwealth and States. Government entities that are leviable entities cannot claim Crown immunity from levy liability.

Waiver. The AUSTRAC CEO may waive the whole or part of an amount of levy or late payment penalty if the CEO considers it appropriate (section 11(1)). The discretion is broad; no criteria are specified. The CEO may act on own initiative or on written application by the person (section 11(2)). The waiver decision is the only decision under this Act that attracts internal review and subsequent AAT review.

The primary persons affected are leviable entities under the Australian Transaction Reports and Analysis Centre Industry Contribution Act 2011. These are entities regulated by AUSTRAC under the anti‑money laundering and counter‑terrorism financing regime. The Act does not list them, but in practice they include remittance service providers (including foreign exchange dealers), gambling service providers (casinos, sports betting, online gaming), bullion dealers, digital currency exchanges, and certain other financial service providers that are reporting entities under the Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006. The levy is a cost‑recovery mechanism for AUSTRAC’s supervision, so the entities that bear the levy are those that are supervised. Natural persons who are sole traders or partners in a partnership that is a leviable entity are also affected because of the extended liability under section 6(2). For partnerships, each partner is individually liable to pay the levy and late penalty, though payment by any one partner discharges the obligation. This means a partner could be pursued for the full amount even if the partnership itself has not paid, and the partner has no right of contribution under this Act (ordinary partnership law would apply). Similarly, for an unincorporated association, each member of the committee of management is liable; for a trust, each trustee is liable. These individuals may not have been directly involved in the entity’s AUSTRAC compliance, but they are nonetheless subject to the collection provisions. Entities that are not leviable are not directly affected, though they may be affected indirectly if they deal with leviable entities (for example, through contractual indemnities). The extraterritorial application means that entities outside Australia that are leviable under the imposition Act are also covered. The AUSTRAC CEO can give notices to such entities, and the late payment penalty and debt recovery provisions apply. A person who is affected by a waiver decision under section 11 may seek internal review and AAT review. That person could be the leviable entity itself or a partner, trustee or committee member liable under section 6(2). The Act also affects nominated persons under section 8(2). A leviable entity may nominate another person (such as a group treasurer, external accountant or compliance officer) to receive the notice of due date and pay the instalment. The nominated person is not liable for the levy; the leviable entity remains liable. However, the nominated person will receive the CEO’s notice and may need to act on it to avoid the entity incurring late penalty. If the nominated person fails to pay, the entity still owes the levy. The CEO may also give the waiver decision notice to the nominated person. Finally, the Commonwealth and its agencies are affected insofar as they may be leviable entities - the Act binds the Crown, so government entities that are reporting entities must pay the levy.

Duty to pay levy instalments. The central duty is in section 7: a leviable entity is liable to pay levy in one or more instalments for each financial year. The due date for each instalment is set by a notice from the AUSTRAC CEO (section 8(1)). The duty is to pay by that business day. The notice must specify a date no earlier than 30 days after the beginning of the financial year and no earlier than 30 days after the notice is given. This gives the entity at least 30 days from the notice to arrange payment.

Right to nominate another person. Under section 8(2), the leviable entity may by written notice to the CEO nominate another person to receive the due‑date notice and to pay the instalment. The nomination does not alter the entity’s liability (section 8(3)). This is a right, but it creates no corresponding duty on the nominated person; the entity remains ultimately responsible.

Duty to pay late payment penalty. If any instalment remains unpaid at the start of the levy month after it became due, the entity is automatically liable for a penalty for that month under section 9(1). The penalty is calculated on the unpaid amount and is due at the end of the levy month (section 9(2)). The CEO may later extend the penalty due date by notice (section 9(3)). This penalty is a debt due to the Commonwealth (section 12).

Right to request waiver. A leviable entity (or any person liable) may apply in writing to the AUSTRAC CEO for waiver of the whole or part of any levy or late payment penalty (section 11(2)). The CEO may also waive on own initiative (section 11(1)). The CEO’s discretion is unfettered by statutory criteria. The decision to grant or refuse a waiver is the only decision under this Act that is subject to internal review.

Right to internal review. A person affected by a waiver decision may request the CEO to reconsider the decision (section 14(1)). The request must be made within 21 days after first receiving notice of the decision, or any further period the CEO allows (section 14(2)). The request must set out reasons. The CEO must cause the decision to be reviewed by a person who was not involved in the original decision and who is senior (section 14(3)). The reviewer has 42 days to confirm, revoke or vary the decision (section 14(4)). If no decision is made within 42 days, the original decision is taken to be confirmed (section 14(5)). The reviewer must give written notice of the result and reasons (section 14(6)).

Right to AAT review. An application may be made to the Administrative Review Tribunal for review of a decision confirmed or varied on internal review, or a decision to revoke a decision (section 15). This provides merits review of waiver‑related decisions only. The levy amount or late penalty calculation itself is not reviewable under this Act (though it might be under other Acts or through judicial review).

Duty to pay to AUSTRAC CEO. All levy and late penalty are payable to the AUSTRAC CEO on behalf of the Commonwealth (section 10). This means payment must be made to AUSTRAC, not to the ATO or another agency.

Recovery as debt. The Commonwealth may recover unpaid levy and penalty as debts due (section 12(1)). The AUSTRAC CEO may bring proceedings in the name of the Commonwealth (section 12(2)). This means the normal court procedures for debt recovery apply, with costs potentially awarded.

No right to exemption. Section 13 removes any right to claim exemption from levy under other laws. Pre‑commencement exemptions are ineffective; post‑commencement exemptions must expressly refer to levy under this Act. A leviable entity cannot rely on a general tax exemption or a State law exemption.

The Act contains only one penalty provision: the late payment penalty under section 9. There are no criminal penalties or infringement notices for non‑payment of levy; the enforcement mechanism is purely civil debt recovery. The late payment penalty is calculated at a rate of 0.2 divided by 12 (i.e., 1.667 per cent) of the unpaid instalment amount for each levy month that the amount remains unpaid after the due date. The penalty triggers automatically at the start of the levy month after the due date (section 9(1)). For example, if an instalment was due on 15 August and remains unpaid at the start of September (the next levy month), a penalty for September arises. The penalty amount is the unpaid instalment multiplied by 0.2/12. The penalty for September is due at the end of September (section 9(2)). If the penalty itself is not paid, it presumably becomes part of the unpaid amount for subsequent months, leading to compounding, though the Act does not explicitly state that the penalty is added to the principal for future calculations. However, because the formula uses “the amount of the instalment remaining unpaid” at the start of the levy month, it is arguable that late payment penalty is a separate debt and not part of the “instalment,” so it may not itself attract penalty. But the CEO could arguably treat the penalty as part of the overall debt and the unpaid penalty could be recovered as a debt. The CEO has discretion to extend the due date for the penalty by written notice (section 9(3)). This could be used to grant relief in hardship cases. Recovery of unpaid levy and penalty is through civil proceedings in a court of competent jurisdiction. The Commonwealth may sue the leviable entity (and, in the case of partnerships, associations and trusts, the individuals liable under section 6(2)) for the debt. The AUSTRAC CEO is authorised to bring proceedings as agent of the Commonwealth (section 12(2)). This means the CEO can initiate and conduct litigation without needing a specific Commonwealth authorisation in each case. The recovery action is not subject to any limitation period mentioned in the Act; the general Commonwealth limitation periods would apply (typically six years for debt recovery). Importantly, failure to pay levy does not result in automatic suspension or cancellation of the entity’s AML/CTF registration; that would be dealt with under the Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006, not this Act. However, the debt could be enforced against the entity’s assets, and the CEO may consider non‑payment as a factor in other regulatory actions (such as assessing fitness and propriety). Waiver under section 11 is the only discretionary relief from payment. There is no right to enter into a payment plan under this Act, though the CEO could presumably use the waiver power or the ability to extend the penalty due date to effectively grant time to pay. The internal review and AAT review provisions are limited to waiver decisions, not to the amount of levy or penalty itself. This means that if a leviable entity disputes the calculation of levy (which is determined by the imposition Act), it must challenge that under the imposition Act or through general judicial review. The collection Act itself provides no mechanism for disputing the underlying liability.

This Act sits alongside three other key pieces of legislation: the Australian Transaction Reports and Analysis Centre Industry Contribution Act 2011 (the imposition Act), the Australian Transaction Reports and Analysis Centre Supervisory Cost Recovery Levy Act 2011 (the levy Act), and the Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006 (the AML/CTF Act). The definitions of AUSTRAC, AUSTRAC CEO, and “person” are borrowed from the AML/CTF Act (section 6(1)). This ensures consistency across the regulatory framework: the same entities that are reporting entities under the AML/CTF Act are likely leviable entities for the levy. The term “leviable entity” is defined by reference to the Industry Contribution Act, which imposes the levy. The collection Act provides the procedural machinery - notice, payment, penalty, waiver, recovery - while the Industry Contribution Act sets the amount and method of calculation. The Supervisory Cost Recovery Levy Act 2011 is linked for commencement purposes: sections 3-8 and 10-16 of this collection Act commenced at the same time as section 3 of that levy Act (1 July 2011), and section 9 (late payment penalty) commenced six months later (1 January 2012). The collection Act’s section 17 (review of levy) was inserted by the Australian Transaction Reports and Analysis Centre Supervisory Cost Recovery Levy (Collection) Amendment Act 2014. That amendment Act is not provided, but it introduced the requirement for an independent review after the fourth anniversary of its commencement. The most significant interaction is with other laws through section 13, which renders exempting laws ineffective. This is a strong pre‑emption provision. Any law passed before 28 June 2011 that purports to exempt a person from taxes or levies does not apply to this levy. Any law passed after that date that exempts from “taxes under laws of the Commonwealth” or “certain taxes under laws of the Commonwealth that would otherwise include levy” will not exempt from this levy unless it expressly refers to “levy under this Act” (section 13(2)). This means that even a broad exemption in, say, a future industry assistance Act will not cover the AUSTRAC levy unless the exemption explicitly names this specific Act. This is a trap for the unwary: an entity might think it is exempt under a general tax exemption, but it is not. The Act does not interact with taxation laws in the sense of the levy being tax‑deductible; that would be determined by the income tax law. The levy is likely an allowable deduction as an expense incurred in carrying on business, but this Act says nothing about that. The late payment penalty may not be deductible (penalties are generally not deductible under the income tax law). The recovery provisions give the Commonwealth a right to sue as a creditor. This interacts with the general law of debt recovery and insolvency. A debt under this Act is unsecured unless the Commonwealth obtains a judgment and then uses enforcement measures. The Act does not give AUSTRAC a statutory lien or priority in insolvency, although the general priority rules for Commonwealth debts (such as in the Bankruptcy Act 1966 or Corporations Act 2001) may apply. The Act binds the Crown (section 3), so government entities that are leviable must pay. This overrides any common law Crown immunity that might otherwise apply. The extraterritorial application (section 5) means the Act operates outside Australia, which raises potential conflicts with foreign laws. However, the Act avoids those by prescribing its own collection mechanism; it does not purport to authorise conduct illegal abroad.

The Act as originally enacted in 2011 contained sections 1-16. The commencement table in section 2 reflects the original enactment. The significant amendment came with the Australian Transaction Reports and Analysis Centre Supervisory Cost Recovery Levy (Collection) Amendment Act 2014, which inserted section 17 (review of operation of levy). The source text includes that section, so the version we see is the current consolidated version. The amendment Act does not appear in the source, but its purpose was to require a review of the levy’s operation after four years. The review was to be independent, consult industry, and report on methodology. The review was to be tabled in Parliament. There may have been other minor amendments not reflected in the source text (such as changes to the name of the tribunal - originally the Administrative Appeals Tribunal, now the Administrative Review Tribunal - but the source uses the current name). The Act has not been subject to major substantive amendments beyond the 2014 review requirement. Practitioners should check the Federal Register of Legislation for any later amendments after the source text was prepared. However, the source provided appears to be the Act as in force after the 2014 amendment. It is possible that the commencement table has been updated to reflect the 2014 amendment, but the table in section 2 only refers to the original commencement. The 2014 amendment would have its own commencement provisions. Section 17(1) refers to “the commencement of the Australian Transaction Reports and Analysis Centre Supervisory Cost Recovery Levy (Collection) Amendment Act 2014”. That amendment would have commenced on a date specified in that Act. The fourth anniversary of that commencement would trigger the review. That review should have been undertaken by 2018 or 2019. The outcome of that review is not in the source, but it may have led to further amendments. The Minister must cause a review “as soon as possible after” that fourth anniversary, which implies a degree of flexibility.

The source does not cite any case law. There is no history of litigation mentioned in the Act itself. However, the Act provides for AAT review of waiver decisions (section 15), so there may have been applications to the AAT (formerly the Administrative Appeals Tribunal) by entities dissatisfied with waiver refusals. Those decisions are not public from the source. It is possible that the levy amount itself has been challenged in the Federal Court or High Court on constitutional grounds - for example, whether the levy is a tax for which the Commonwealth must comply with section 55 of the Constitution (laws imposing taxation must deal only with the imposition of taxation). The Industry Contribution Act would be the focus of such a challenge, not this collection Act. This collection Act is a machinery Act that would be valid as an exercise of the Commonwealth’s power to make laws with respect to the collection of the levy. The High Court has considered cost‑recovery levies in other contexts, and the key issue is whether the levy is a tax or a fee for service. If a court held the Industry Contribution Act invalid, this collection Act would have no levy to collect. But there are no reported cases in the source. The internal review mechanism under section 14 is administrative, not judicial. The AAT review provides merits review, which could result in a decision to grant waiver. There is no right to appeal on questions of law from the AAT to the Federal Court unless provided elsewhere. Given that the Act has been in force since 2011, it is likely that some entities have sought waiver and some may have pursued internal review and AAT review. The lack of reported case law may indicate that most disputes are resolved administratively or that the levy amounts are too small to justify litigation.

Several provisions in this Act create traps for unwary regulated entities.

Only waiver decisions are reviewable. The Act provides internal review and AAT review only for decisions under section 11 (waiver of levy or late payment penalty) (sections 14 and 15). There is no right to seek review of the amount of levy assessed, the calculation of an instalment, the timing of the due date, or the imposition of the late payment penalty. If a leviable entity believes the levy is miscalculated under the Industry Contribution Act, it must challenge that under that Act, possibly through judicial review. The collection Act itself provides no merits review for the underlying liability. This means an entity that misses the due date due to an error in the CEO’s notice may have no recourse except waiver (and waiver is discretionary). The CEO could refuse waiver on any ground, and the entity can only challenge that refusal, not the underlying debt.

Late payment penalty is high and may compound. The monthly rate of 1.667 per cent (20% per annum) is substantial. It activates automatically if the instalment is unpaid at the start of the month after the due date. The penalty is due at the end of that month. If the penalty is not paid, it becomes a separate debt. The Act does not explicitly say the unpaid penalty itself bears further penalty, but the wording “amount of the instalment remaining unpaid” in section 9(1) suggests penalty is not part of the instalment. However, the penalty debt plus the unpaid instalment could both be recovered. If the CEO takes a long time to give the notice of due date, the entity may have very little time to pay, increasing the risk of late payment.

Nomination does not shift liability. Under section 8(2), a leviable entity may nominate another person to receive the notice and pay the instalment. But section 8(3) makes clear that the entity’s liability is not affected. If the nominated person fails to pay, the entity remains fully liable for the levy and any resulting late penalty. Many entities might assume that nominating a group treasury centre or external accountant relieves them of the obligation to monitor payment. It does not. The entity must ensure the nominated person actually pays on time.

Partnerships, associations and trusts have joint and several liability. Section 6(2) deems the partnership, association or trust a person but imposes the obligation on each partner, committee member or trustee. This means the CEO can pursue any one of them for the full amount. A partner who is not involved in the entity’s AUSTRAC affairs could be personally liable for a levy they did not know about. The internal review and AAT review rights are also available to each such individual (they are “affected” persons). But the entity itself is the leviable entity, so it is unusual to make individuals liable for payment. This is a trap for professionals or investors who are partners in a law firm or accounting firm that happens to be a leviable entity (e.g., if the firm provides remittance services). They should ensure the partnership has arrangements to pay the levy centrally.

Exempting laws are ineffective. Section 13 is broad. A leviable entity cannot rely on a general tax exemption in another Commonwealth Act. For example, if a charitable trust is exempt from income tax, that does not exempt it from the AUSTRAC levy unless the exemption provision expressly refers to “levy under this Act”. The same applies to State laws: since the Act binds the Crown, State instrumentalities that are leviable must pay. Any law passed before 28 June 2011 that grants an exemption from “taxes” or “charges” does not apply. This is a gotcha for entities that previously operated under a specific exemption.

Extraterritorial application. The Act applies to acts, omissions, matters and things outside Australia (section 5). A leviable entity that operates partly offshore but faces a notice under section 8 may need to pay from overseas accounts. Non‑payment triggers the late penalty automatically. The CEO can recover the debt in Australia and possibly enforce overseas under foreign judgments legislation.

No payment plans or automatic extensions. The Act does not provide for payment plans. The only relief from late penalty is the CEO’s ability to extend the due date for the penalty (section 9(3)) or to waive the penalty (section 11). But waiver is discretionary. An entity that cannot pay on time should apply for waiver as soon as possible; there is no statutory protection from penalty while the waiver application is pending.

No right to set‑off or dispute by withholding. The Act does not allow an entity to withhold levy because it disputes the amount. The levy is due and payable as specified in the CEO’s notice. Withholding payment would trigger late penalties. The only avenue is to pay under protest and then seek a refund (if overpaid) or challenge the underlying liability through other mechanisms.

Compliance requires attention to the notice regime, timely payment, and proactive engagement with AUSTRAC if difficulties arise.

Step 1: Confirm leviable entity status. An entity should confirm that it is a leviable entity for the financial year under the Australian Transaction Reports and Analysis Centre Industry Contribution Act 2011. This Act may specify classes of reporting entities and the levy calculation method. If uncertain, the entity should seek guidance from AUSTRAC.

Step 2: Ensure accurate contact details. The AUSTRAC CEO will give notice of each instalment due date under section 8(1). The entity must ensure that AUSTRAC has its current address (physical or electronic) for service of the notice. If the entity wishes to nominate another person (e.g., a parent company, compliance officer or accountant) to receive the notice, it must provide a written notice of nomination to the CEO (section 8(2)). The nomination should be made before the first instalment is due.

Step 3: Monitor for the CEO’s notice. After the start of the financial year (1 July), the CEO will issue a notice specifying the business day on which each instalment is due. The due date will be at least 30 days after the start of the financial year and at least 30 days after the notice is given. The entity should check when the notice is received and diarise the due date. If a nominated person receives the notice, that person should immediately inform the entity of the due date.

Step 4: Pay the instalment on or before the due date. Payment must be made to the AUSTRAC CEO on behalf of the Commonwealth (section 10). The notice should specify payment method (likely electronic transfer to a government bank account or via a payment portal). The entity should ensure the payment is processed in time to reach the CEO’s account by the close of the business day. If the due date falls on a day that is not a business day in the entity’s location, the entity should pay on the previous business day to be safe (the Act defines business day but does not provide for an extension if the due date is not a business day; the CEO must specify a business day (section 8(1)), so it should be clear).

Step 5: Keep records. The entity should retain copies of the CEO’s notices, any nomination notices, payment confirmations, and any correspondence about waiver. These may be needed if a dispute arises or for internal review.

Step 6: If late payment is unavoidable, apply for waiver promptly. If the entity cannot pay the full instalment on time, it should apply in writing to the CEO for waiver of all or part of the levy and/or late penalty (section 11(2)). The application should set out the reasons why waiver is appropriate. There are no statutory criteria, so the entity should address the CEO’s discretion, e.g., financial hardship, administrative error, or circumstances beyond its control. Even if the CEO refuses, applying early may demonstrate good faith. The entity can then seek internal review (section 14) within 21 days of the refusal decision, and thereafter AAT review (section 15).

Step 7: Pay any late penalty if it becomes due. If an instalment is paid late, the late payment penalty for that month is automatically due at the end of that levy month (section 9(2)). The entity should calculate and pay the penalty promptly to avoid recovery action. The formula is straightforward: unpaid instalment × 0.2 / 12. If the CEO sends a notice extending the due date for the penalty, pay by that date.

Step 8: For partnerships, associations and trusts, ensure all liable individuals are aware. The entity should inform each partner, committee member or trustee of their potential liability under section 6(2). Ideally, the partnership or association should designate one person (e.g., the managing partner or the treasurer) to handle levy payments on behalf of all, and that person should have authority to use partnership/trust funds. The nomination power under section 8(2) can be used to nominate that person to receive notices, but this does not affect the liability of others.

Step 9: Monitor for exempting laws. If the entity believes it is exempt from levy under another Commonwealth or State law, it should verify that the exemption expressly refers to “levy under this Act”. Section 13 makes exemptions ineffective unless they specifically name this levy. The entity should not rely on a general tax exemption.

Step 10: Participate in the levy review. If a review under section 17 is underway, the entity should consider making a submission to the reviewer, particularly on the methodology for calculating levy and the compliance costs. The reviewer must consult industry participants (section 17(2)(a)). This is an opportunity to influence the levy structure.