Chapter 5 - Remitter registration requirements

Contents


Introduction

Reporting entities providing a designated remittance service (under items 31, 32 and 32A, table 1, section 6, Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act)) must enrol and register with AUSTRAC before providing remittance services to their customers. Remittance service providers that register with AUSTRAC are placed on the AUSTRAC Remittance Sector Register.

This chapter provides an overview of the registration requirements. Information on enrolling with AUSTRAC is available in Chapter 4 - Enrolment requirements.

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Background

Why must remittance service providers register with AUSTRAC?

The remittance sector is recognised by Australian law enforcement and national security authorities as being vulnerable to targeting by criminals for money laundering, terrorism financing and the financing of serious and transnational crime, including people smuggling.

The vulnerabilities in this sector are also acknowledged by international AML/CTF experts. Remitters must register with AUSTRAC to prevent 'high risk' individuals from operating in the sector.

Registration with AUSTRAC is not automatic. A person seeking registration on the Remittance Sector Register must provide AUSTRAC with information which will be used to assess their suitability to be registered.

Under the AML/CTF Act, AUSTRAC can refuse, suspend or cancel the registration of remittance dealers where a remitter poses an unacceptable risk of money laundering, terrorism financing or the financing of people smuggling.

What types of remittance services are required to be registered with AUSTRAC?

Businesses providing remittance services under items 31, 32 or 32A (table 1, section 6, AML/CTF Act) must apply to register with AUSTRAC. Remittance service providers must register with AUSTRAC as one (or more) of the following:

  • remittance network provider
  • remittance affiliate
  • independent remittance dealer.

A remitter may operate in more than one category and must apply to be registered for each category in which it operates. AUSTRAC issues a separate registration for each category of remittance service provided by a remitter.

Reporting entities that provide remittance services incidental to their core business

Some reporting entities may provide remittance services to their customers while in the process of providing another designated service. For example, online gaming providers, stockbrokers, managed investment schemes, custodians and businesses in the superannuation sector may send funds overseas on behalf of their customers, but only as an incidental service to their core business.

It is AUSTRAC’s view that the funds transfers conducted by reporting entities in the circumstances detailed below do not constitute a designated remittance arrangement under the AML/CTF Act.

Accordingly, AUSTRAC will not enforce the AML/CTF Act obligations regarding designated remittance arrangements (including the remitter registration and IFTI-DRA reporting obligations) for reporting entities in the following circumstances:

  • where a reporting entity provides a designated remittance service and has IFTI-DRA reporting obligations incidentally to providing another designated service (that is not an item 31, 32 or 32A service in section 6 of the AML/CTF Act); and
  • all funds transfers undertaken by the reporting entity are conducted through a financial institution.

The above narrows the scope of the application of section 10 (Designated remittance arrangements etc.) of the AML/CTF Act and clarifies what AUSTRAC considers to constitute a designated remittance arrangement under the Act.

Licensed casinos and currency exchange businesses

The above position does not apply to remittance services provided by licensed casinos and currency exchange businesses.

  • Currency exchanges: where a customer seeks to exchange money at a currency exchange business, or convert foreign currency, and requests the money to be transferred to a foreign country, AUSTRAC expects the exchange business to report an IFTI-DRA because the funds transfer is not incidental to the other designated service.
  • Licensed casinos: obligations for licensed casinos that provide remittance services have been addressed separately by AUSTRAC within this guide.

What is an 'independent remittance dealer'?

An independent remittance dealer is a business that provides remittance services to customers using its own systems and processes. It may have its own branches that it also owns and controls; that is, the independent remittance dealer employs the staff and is responsible for the operating costs of its branches (such as rent, utilities and services costs and council rates).

What is a 'remittance network provider'?

In simple terms, remittance network providers:

  • operate a network of persons, called 'affiliates', who provide remittance services to customers of the network
  • provide a shared or common platform or operating system used by their affiliates within the network to provide remittance services
  • provide an AML/CTF program and report IFTIs and TTRs on behalf of the remittance network.

For further information, see AUSTRAC guidance note 12/03 - What constitutes a Remittance Network Provider?

What is an 'affiliate' of a remittance network provider?

An affiliate of a remittance network provider is a business that provides remittance services to customers as part of a remittance network operated by a remittance network provider.

A remittance affiliate will generally:

  • have a commercial agreement or contract with a remittance network provider to provide remittance services in the name of the remittance network provider
  • use the platform or business system owned by the remittance network provider
  • receive a commission from the remittance network provider on transactions conducted
  • use the AML/CTF program provided by the remittance network provider.

What are the registration requirements for a remittance network provider?

A remittance network provider must be registered with AUSTRAC before it can provide a remittance network service. Once registered, a remittance network provider is responsible for applying to register all affiliates operating within its network. The remittance network provider must also keep the details of its affiliates up to date with AUSTRAC (see below).

Remittance network providers must also carry out a range of other AML/CTF responsibilities on behalf of their affiliates, including:

  • reporting TTRs and IFTIs (SMRs can be submitted by either the RNP or the affiliate, depending on their written agreement)
  • providing an AML/CTF program.

Can a remitter apply for registration as an affiliate of a remittance network provider?

Generally, the remittance network provider applies for registration (and enrolment) with AUSTRAC on behalf of all of its affiliates. However, where a remitter is already registered as an independent remittance dealer, the remitter may apply directly to AUSTRAC to be registered as an affiliate, provided it has the written consent of its remittance network provider. An affiliate that has registered on its own behalf must maintain its own registration information.

Where an affiliate also wishes to provide independent remittance services, the remitter must make a separate application to AUSTRAC for registration as an independent remittance dealer.

Can a remitter provide remittance services without being registered with AUSTRAC?

All remittance service providers must be registered with AUSTRAC before offering remittance services to customers. It is an offence to provide remittance services without being registered on the Remittance Sector Register. The penalty is imprisonment, a fine, or both.

Are remitters also required to enrol with AUSTRAC?

All remitters must enrol with AUSTRAC as a 'reporting entity'. Remitters may apply for registration at the same time as enrolling with AUSTRAC. See Chapter 4 - Enrolment requirements for further information.

How often must remitters renew their registration with AUSTRAC?

Independent remittance dealers and remittance network providers must renew their registration with AUSTRAC every three years. Remittance network providers must also apply to renew the registration of their affiliates every three years.

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Applying for registration

How does a remitter register with AUSTRAC?

Independent remittance dealers and remittance network providers can apply to register with AUSTRAC by completing and submitting the registration section of the AUSTRAC Business Profile Form to AUSTRAC. Additional information and assistance about applying for registration is available on the Enrolment and registration page.

Remitters must also obtain and keep specific information about their business and key personnel (depending on the type of remitter registration). Part B, Schedules 1, 2 and/or 3, Chapter 56, AML/CTF Rules specifies the required information.

A remitter who is already enrolled with AUSTRAC as a reporting entity can apply for registration by completing and submitting the registration section of the AUSTRAC business profile form.

Remitters without a computer or internet access may enrol and register using a paper form, available by contacting the AUSTRAC Contact Centre.

Remittance network providers must apply for registration on behalf of their affiliates through the My Affiliates function in AUSTRAC Online. A remittance network provider cannot register its affiliates until its own registration is approved by AUSTRAC.

What information must a remitter provide when applying for registration?

A remitter applying for registration must provide AUSTRAC with information about their remittance business and key personnel. Chapter 56 of the AML/CTF Rules specifies the registration requirements. Remitters must also disclose to AUSTRAC details about certain criminal, civil and enforcement action relevant to their key personnel.

What information must a remitter obtain and keep when applying for registration?

Business information

Remitters must keep information about their remittance business and business structure, including information about their management structure and any other entities in the corporate structure.

The AUSTRAC Business Profile Form - explanatory guide, available on the Enrolment and registration page, contains a full list of information that must be obtained and kept.

National police certificates and national police history checks

Remitters applying to be registered with AUSTRAC must obtain and keep national police certificates (or foreign equivalent) or national police history checks for all key personnel. Remitters must keep the original certificate or a certified copy.

Network providers are required to obtain and retain an original or certified copy of a national police certificate for each of the key personnel of its affiliates. Where the affiliate or other network agent obtains the original or certified copy of the national police certificate it is sufficient for the remittance network provider to retain an electronic copy of that certificate.

All national police certificates (or foreign equivalent) or national police history checks must be issued no more than six months before the remitter applies for registration (or 12 months for affiliates of remittance network providers). Remitters must declare that national police certificates or national police history checks have been obtained for all key personnel when submitting their registration application to AUSTRAC.

If the individual listed as key personnel is resident in a foreign country, a national police certificate issued by a police force of that country is required.

Remitters must also obtain and retain a national police certificate or a national police history check for any new key personnel appointed during the period of registration. Remitters must declare to AUSTRAC any changes to their key personnel during the registration period and whether they have:

  • obtained a national police certificate or national police history check in relation to the key personnel; or
  • made an application to obtain a national police certificate or national police history check.

The national police certificate or national police history check is also an aid to the remitter in assessing whether any of their key personnel may be a money laundering, terrorism financing or people smuggling risk.

How does a person obtain a national police certificate or national police history check?

A national police certificate (or foreign equivalent) is a document issued by an Australian Police Force (or foreign equivalent) that contains a certification that the person to whom it relates has no disclosable convictions or those disclosable convictions which are detailed in the Certificate.

An Australian national police certificate can be obtained through the Australian Federal Police or state and territory police services.

A national police history check is an alternative to obtaining a national police certificate. National police history checks can be obtained through an agency that has been accredited by CrimTrac, which is the Australian Government agency that administers the national police checking process and information database.

A list of accredited agencies through which a national police history check can be obtained is available on the CrimTrac website.

How are remitters notified about the outcome of their registration application?

AUSTRAC advises the applicant in writing about the outcome of its registration application.

If AUSTRAC approves the registration application, the remitter is placed on the Remittance Sector Register and receives a registration number. If AUSTRAC refuses the registration application or approves the application subject to conditions, the remitter is notified about its rights to seek an independent review of the decision.

How long does it take to process a remitter registration application?

Under the AML/CTF Act, AUSTRAC is required to make a decision within 90 days from the day the registration application is received by AUSTRAC. If AUSTRAC requests further information about the application, the decision must be made within 90 days of receiving that information.

AUSTRAC can extend the processing period by 30 days if the application cannot be dealt with properly within 90 days. AUSTRAC must notify the applicant in writing of this extension before the 90 days ends.

If AUSTRAC does not make a decision within 90 days, the application is considered to be refused under the AML/CTF Act. The remitter can request an internal review of the application if this occurs.

Can AUSTRAC request further information about an application for registration?

Under the AML/CTF Act, AUSTRAC may, in writing, request further information from any person (including the applicant) when making a decision to register a remitter. AUSTRAC is not required to make a decision until the additional information is provided.

What does AUSTRAC consider when assessing an application for registration?

AUSTRAC considers whether allowing the person to operate as a remitter involves a significant risk of money laundering, terrorism financing or the financing of people smuggling. Relevant factors include whether the person has a criminal history, or has repeatedly failed to comply with their AML/CTF obligations, or has been disciplined by another regulator.

Can AUSTRAC impose conditions on registration?

AUSTRAC may impose conditions on a remitter's registration to address any issues AUSTRAC identified when assessing the remitter's application. AUSTRAC may also impose conditions at a later time to address any subsequent issues AUSTRAC identifies with the remitter (see section 75E of the AML/CTF Act).

A remitter may seek an independent review of a decision by AUSTRAC to impose conditions on its registration.

On what grounds can AUSTRAC refuse registration?

AUSTRAC can refuse a registration application, based on the risk of money laundering, terrorism financing or the financing of people smuggling or any other matters specified in Chapter 57 of the AML/CTF Rules.

A remitter may seek an independent review of a decision by AUSTRAC to refuse its registration.

If AUSTRAC does not register a business as a remittance network provider, can that network provider's 'affiliates' register with AUSTRAC as independent remittance dealers?

If AUSTRAC does not register a business as a remittance network provider, the businesses that have arrangements with that network provider to provide remittance services cannot be registered as 'affiliates'. However, they can apply to be registered as independent remittance dealers.

Does AUSTRAC have the power to suspend or cancel registration of a remittance service provider?

Cancelling registration

AUSTRAC can cancel the registration of a remittance network provider, an independent remittance dealer, or the affiliate of a remittance network provider if the remitter poses an unacceptable risk of money laundering, terrorism financing or the financing of people smuggling. Section 75G of the AML/CTF Act and chapter 58 of the AML/CTF Rules set out these powers.

AUSTRAC must consider several factors before deciding to cancel a remittance service provider's registration. AUSTRAC may suspend or cancel a remitter's registration if the remitter is charged with or found guilty of a serious criminal offence; has provided incorrect or false information in an application for registration or renewal of registration or in updating their registration details on the Remittance Sector Register; or if the remitter does not comply with the AML/CTF Act.

The remittance service provider will be notified in writing if AUSTRAC cancels the remitter's registration. The cancellation takes effect from the date of the notice.

AUSTRAC can publish the names of persons whose registration has been cancelled and the date of cancellation. This enhances the transparency of the remittance sector and enables consumers to access information about cancellations.

A remitter may seek an independent review of a decision by AUSTRAC to cancel its registration.

Suspension of registration

AUSTRAC can suspend a registration if AUSTRAC is satisfied the registered remittance service provider breached its obligations or poses an unacceptable risk of money laundering, terrorism financing or the financing of people smuggling.

Subsection 75H(1) of the AML/CTF Act and chapter 59 of the AML/CTF Rules outline arrangements for suspending registration. Subsection 75H(2) provides a non-exhaustive list of matters the Rules may include. Examples include where a remitter is charged, prosecuted and/or found guilty of money laundering, financing terrorism, terrorism, people smuggling, fraud, a serious offence, or an offence under the AML/CTF Act.

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Applications for review of a decision to refuse, cancel, suspend or impose a condition on a registration

Can a remitter request a review if a registration application is refused, suspended, cancelled or made subject to conditions?

Under section s233B of the AML/CTF Act, a person may apply for an internal review of a decision that was made under sections 75B, 75C, 75E, or 75G of the AML/CTF Act. These include decisions to:

A remitter can also seek an internal review if the application is refused because AUSTRAC did not make a decision within the time frames specified under subsections 75B(6) and 75B(7).

A request for an internal review of a decision must be submitted to AUSTRAC within 14 days of receiving the notice to refuse, cancel or suspend the registration or to impose conditions on the registration.

What are the processes of a review?

The process for reviewing a decision to refuse, cancel or impose conditions on a registration is as follows:

  • AUSTRAC must (except in cases of urgency) give written notice of a proposed decision and provide the remitter an opportunity to respond. The written notice must contain key information about the decision, including rights of review.
  • The remitter may seek internal review of the original decision.
  • AUSTRAC CEO can delegate review decisions to an AUSTRAC staff member. AUSTRAC CEO must ensure the decision is independently reviewed by an AUSTRAC officer who is senior to the original decision maker and who was not involved in making the original decision. The reviewer may affirm, vary or revoke the original decision.

A notice of a proposed decision to refuse, cancel or impose conditions on a registration is not required to be given if AUSTRAC is satisfied that it is inappropriate to do so because of the urgency of the circumstances; for example, if a serious crime is about to occur.

How does a remitter seek an external review of a decision made by AUSTRAC?

A remitter not satisfied with the internal review of a decision by AUSTRAC may apply for review by the Administrative Appeals Tribunal (AAT). Visit the AAT website for information about AAT processes and procedures.

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Maintaining registration information

Is a remitter required to advise AUSTRAC of any changes to their details or circumstances?

A remitter must advise AUSTRAC of any material changes in its circumstances through its AUSTRAC Online account.

Chapter 60 of the AML/CTF Rules details the changes a remitter must report to AUSTRAC. For example:

  • changes to the remitter's registration details
  • changes in the number of the remitter's key personnel and a declaration that a national police certificate or national police history check has been obtained, or an application has been made for a national police certificate or national police history check for the new key personnel.
  • if the remitter (including its key personnel) has been charged, prosecuted or found guilty of an offence including money laundering, terrorism or terrorism financing, people smuggling, fraud, a serious offence, an offence under the AML/CTF Act or under the Financial Transaction Reports Act 1988
  • if the remitter has been the subject of a civil penalty order issued under the AML/CTF Act
  • if the remitter has been the subject of civil or criminal proceedings or enforcement action, in relation to the management of an entity, or commercial or professional activities, which were determined adversely to the person or any of its key personnel.

The time frames and processes for notifying AUSTRAC of changes in circumstances differ depending on the type of remittance dealer and registration:

  • Independent remittance dealers and remittance network providers must notify AUSTRAC within 14 days of any changes in their circumstances.
  • Affiliates whose remittance network providers applied for their registration have 14 days to notify their network provider. A network provider must then notify AUSTRAC within seven days of receiving the advice from its affiliate.

How does a remitter notify AUSTRAC of changes to their registration details?

A registered remitter can advise AUSTRAC of a change to its details electronically through its AUSTRAC Online account or using the AUSTRAC Business Profile Form.

An affiliate whose remittance network provider applied for their registration must notify their network provider of changes to their registration details. The network provider can update the affiliate's registration details through the My Affiliates function in AUSTRAC Online.

Remitters without a computer or internet access can contact the AUSTRAC Contact Centre.

Can AUSTRAC change a remitter's details on the Remittance Sector Register?

AUSTRAC can change a registered remitter's details on the Remittance Sector Register in limited circumstances. AUSTRAC may change a remitter's registration details if AUSTRAC considers the details incorrect or incomplete.

AUSTRAC must notify the remitter of the changes to its details and the date the changes were made within 14 days of making the changes.

Can a remitter request to be removed from the Remittance Sector Register?

A registered remitter can request, in writing, for AUSTRAC to remove it from the Remittance Sector Register.

Where a registered remitter ceases to be registered as a remittance network provider, AUSTRAC is required to remove both the remittance network provider and each of the network provider's affiliates from the register (see subsection 75K(3) of the AML/CTF Act).

AUSTRAC must, as soon as reasonably practicable, notify a remittance network provider, in writing, if AUSTRAC has removed one of the network provider's affiliates from the register (where the remittance network provider did not request the removal).

AUSTRAC notifies network providers if their affiliates have been removed from the register because it is an offence (under subsection 74(1) of the AML/CTF Act) for a network provider to provide a remittance network service to a person who is not a registered affiliate. Similarly, it is an offence for a person who is part of a network to provide a remittance service if they are not a registered remittance affiliate of a remittance network provider.

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Renewal of registration on the Remittance Sector Register

A remitter's registration with AUSTRAC must be renewed after three years to enable the remitter to continue to provide remittance services.

See Chapter 70 of the AML/CTF Rules in relation to renewal of registration requirements.

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Remittance Network Providers applying for the renewal of an affiliate's registration

Read the step-by-step process you need to take to renew your affiliates in the AUSTRAC Online system.

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Exemptions from the requirement to be registered on the Remittance Sector Register

Licensed casinos

Chapter 69 of the AML/CTF Rules provides an exemption for licensed casinos from registering with AUSTRAC as remittance service providers under certain circumstances. 

The exemption provides that reporting entities which: 

  • hold a casino licence; and
  • provide the designated service listed at item 31, item 32 or item 32A of table 1 in subsection 6(2) of the AML/CTF Act

are exempt from the obligation to register on the Remittance Sector Register where:

  • the designated services are provided in a casino to which the casino licence relates; and
  • the designated services are provided in conjunction with a designated service set out in table 3 (gambling services) in subsection 6(4) of the AML/CTF Act.

Casino licence holders are still required to report international funds transfer instructions (IFTIs). Chapter 7 provides further information about the IFTI reporting obligations and several scenarios of common international funds transfers conducted by casino licence holders

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Last modified: 03/04/2017 15:55