Date posted: 26/04/2023

Anti-money laundering tranche 2, accountants stand ready to help

The Attorney General has announced a consultation on proposed reforms to Australia’s AML/CTF regime.

In brief

  • The Government has accepted all the Senate Committee’s recommendations.
  • The consultation includes proposals to extend the regime to professions including accountants.
  • CA ANZ will be engaging with members to seek feedback.

On 20 April 2023, Australia’s Attorney-General has announced a public consultation on proposed reforms of Australia’s anti-money laundering and Counter-terrorism financing (AML/CTF) regime. Part 2 of the consultation paper proposes extending the AML/CTF regime to certain high-risk professions, including lawyers, accountants, trust and company service providers, real estate agents and dealers in precious metals and stones (also known as tranche-two entities).

The Attorney-General also indicated that the Government had accepted all the recommendations from of the Senate Legal and Constitutional Affairs References Committee Inquiry into the adequacy and efficacy of Australia’s anti-money laundering and counter-terrorism financing regime.

On appearing before the Senate Legal and Constitutional Affairs Reference Committee on 9 November 2021, with CPA Australia and the Institute of Public Accountants, we reiterated the willingness of the accountancy profession to join efforts to prevent, detect and report money laundering and financing of terrorism.

Our key messages to the Committee were the need for extensive consultation with a broad range of relevant stakeholders and consideration of the existing regulatory obligations and professional standards on professional accountants, our members. Implementation of tranche 2 should harness, not duplicate, existing obligations on professional accountants.

Recommendation 2 from the Committee was that the Commonwealth government should undertake broad consultation and implement tranche 2 with specific consideration of the impact on small business and the existing regulatory and professional obligations of tranche 2 entities.

The Consultation Paper proposes that specific services undertaken by an accountant for their client be covered by the regime.

  • buying and selling of real estate
  • managing of client money, securities or other assets
  • management of bank, savings or securities accounts
  • organisation of contributions for the creation, operation or management of companies
  • creation, operation or management of legal persons or legal arrangements (e.g. trusts), and
  • buying and selling of business entities.

It also notes these may include specific activities of trust and company service providers such as providing a registered office or acting as a formation agent of legal persons.

The Consultation Paper indicates the ‘six key regulatory obligations’ for regulated entities covered by the Act, which would include accountants undertaking specific services. These are:

  • customer due diligence
  • ongoing customer due diligence
  • reporting
  • developing and maintain an AML/CTF Program
  • record keeping
  • enrolment and registration with AUSTRAC

The consultation timeline indicates this first consultation closing 16 June 2023 and a second round of consultation in September 2023. We will engage extensively with members during this and subsequent consultation periods. We will also leverage the experience of our members in New Zealand who have been covered under their AML/CFT regime since 2018. Key learnings include allowing a reasonable timeframe to comply, requirements to be proportionate to risk and acceptance of digital solutions to accommodate client due diligence.

We continue to be committed to acting in the public interest and contributing to a robust system that prevents criminals from using Australia for illegal activities. We support extending the anti-money laundering regime to other businesses and professions. However, the requirements should be proportionate to the risks in each sector. For accountants, the requirements should acknowledge that those who belong to a professional accounting body and/or have statutory registrations such as registered tax agents already operate under significant oversight and have customer due diligence obligations.

Have your say on Australia’s AML and CFT regime

We encourage members to share their views to help shape CA ANZ’s response to the consultation.

Contact us

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