Progress made on proposed anti-money laundering reforms

The Federal Government has come a step closer to formulating new legislation to combat money laundering in a third meeting on the topic with key financial services industry representatives.

Representatives from the Financial Planning Association, the Investment and Financial Services Association and the Australian Bankers Association are concerned that the proposed rules, which are intended to stop the funding of terrorism, could impose over-burdensome costs on business.

But according to the Minister for Justice and Customs Senator Chris Ellison and some of those who attended the third industry roundtable earlier this month, there is still some way to go before any solid policy is agreed upon, with one attendee suggesting that the Government won’t get down to the real nitty gritty of the legislation until an up-and-coming fourth meeting later in the month.

At last Thursday’s meeting, however, the government and industry did agree to an approach to deal with Politically Exposed Persons (PEPs)

PEPs include current or former senior officials in the executive, legislative, administrative, military or judicial branch of any foreign government and their immediate family members.

Ellison has agreed that these higher risk people could be identified for business by third party accredited commercial service providers, or by customer acceptance procedures which rely on the PEP identifying themself.

So far financial services industry representatives have been happy with the Government’s readiness to hear their concerns.

At the first industry round table meeting in June the government addressed one of industry’s key concerns by agreeing that financial services businesses would not have to identify customers already identified under the Financial Transactions Reports Act (FTRA).

Anyone who opens a bank account has to be identified under the FTRA.

All other existing customers would need to be identified on the basis of risk triggers, the exact nature of which will be worked out in coming meetings including the fourth industry round table in October.

It has also been flagged by the Minister Ellison that any proposed Customer Due Dilligence standards will be technology neutral.