- Australian financial services licence
- Australian Government Entity
- Authorised deposit-taking institution
- Bearer negotiable instrument
- Beneficial owner
- Carrying on a business
- Cash carrier
- Certified copy
- Close associates of PEPs
- Designated business group
- Designated remittance arrangement
- Domestic listed public company
- Eligible gaming machine venues
- Gaming machine
- Government body
- Immediate family members
- International organisation
- Key personnel
- Permanent establishment
- Physical currency
- Politically exposed person (PEP)
- Prescribed foreign country
- Prominent public position
- Reasonable measures
- Reliable and independent documentation
- Reliable and independent electronic data
- Remittance Sector Register
- Reporting Entities Roll
- Sanctions list
- Senior managing official
- a credit card account
- a loan account (other than a credit card account)
- an account of money held in the form of units in:
- a cash management trust
- a trust of a kind prescribed by the AML/CTF Rules.
To avoid doubt, it is immaterial whether:
- an account has a nil balance
- any transactions have been allowed in relation to an account.
An Australian financial services licence (AFSL) is a licence provided the Australian Securities and Investments Commission (ASIC) under section 913B of the Corporations Act 2001 that authorises a person who carries on a financial services business to provide financial services.
Australian Government Entity means:
- the Commonwealth, State or a Territory; or
- an agency or authority of:
- the Commonwealth; or
- a State; or
- a local governing body established by a law of the Commonwealth, a State or Territory, other than a body whose sole or principle function is to provide a particular service, such as the supply of electricity or water.
Authorised deposit-taking institution (ADI) means:
- a body corporate that is an ADI for the purposes of the Banking Act 1959; or
- the Reserve Bank of Australia; or
- a person who carries on State banking within the meaning of paragraph 51(xiii) of the Constitution.
A bearer negotiable instrument is:
- a bill of exchange; or
- a cheque; or
- a promissory note; or
- a bearer bond; or
- a traveller's cheque; or
- a money order, postal order or similar order; or
- a negotiable instrument not covered by any of the above paragraphs.
For the purposes of determining whether a document is covered by 6 or 7 above, it is immaterial that the document is incomplete because the document does not specify:
- an amount to be paid; or
- a payee.
- of a person who is a reporting entity, means an individual who owns or controls (directly or indirectly) the reporting entity;
- of a person who is a customer of a reporting entity, means an individual who ultimately owns or controls (directly or indirectly) the customer;
- In this definition: control includes control as a result of, or by means of, trusts, agreements, arrangements, understandings and practices, whether or not having legal or equitable force and whether or not based on legal or equitable rights, and includes exercising control through the capacity to determine decisions about financial and operating policies; and
- In this definition: owns means ownership (either directly or indirectly) of 25% or more of a person.
The phrase 'carrying on a business' (or industry or sector specific variants) is included in many of the descriptions of the designated services. Items 6 and 7 (table 1, section 6, AML/CTF Act), for example, define designated services made in the course of 'carrying on a loans business'.
The AML/CTF Act uses a broader definition of 'business' than some other legislation. For example, an activity must be regular or continuous to be classified a business for taxation purposes. By contrast, the AML/CTF Act covers activities whether or not conducted on a regular, repetitive or continuous basis.
Cash carrying involves transporting physical currency and refers to collecting and delivering physical currency, irrespective of the value involved. A cash carrier is a person engaged to collect and/or transport physically currency and is not the owner of that currency.
Certified copy means a document that has been certified as a true copy of an original document by one of the following persons:
- a person who, under a law in force in a State or Territory, is currently licensed or registered to practise in an occupation listed in Part 1 of Schedule 2 of the Statutory Declarations Regulations 1993;
- a person who is enrolled on the roll of the Supreme Court of a State or Territory, or the High Court of Australia, as a legal practitioner (however described);
- a person listed in Part 2 of Schedule 2 of the Statutory Declarations Regulations 1993. For the purposes of the AML/CTF Rules:
- where Part 2 of the Statutory Declarations Regulations uses the term '5 or more years of continuous service', this should be read as '2 or more years of continuous service';
- Persons listed under Part 2 of Schedule 2 of the Statutory Declarations Regulations include:
- item 202 – an ‘Australian Consular Officer’ or an ‘Australian Diplomatic Officer’
- item 212 – an authorised employee of the Commonwealth who is employed locally in a place outside Australia.
- an officer with, or authorised representative of, a holder of an Australian financial services licence, having 2 or more years of continuous service with one or more licensees;
- an officer with, or a credit representative of, a holder of an Australian credit licence, having 2 or more years of continuous service with one or more licensees;
- a person authorised as a notary public in a foreign country.
A close associate of a politically exposed person means any individual who is known (having regard to information that is public or readily available) to have:
- joint beneficial ownership of a legal entity or legal arrangement with a person who is a PEP
- sole beneficial ownership of a legal entity or legal arrangement that is known to exist for the benefit a person who is a PEP.
'Designated business group' is a group of 2 or more persons, where:
- each member of the group has elected, in writing, to be a member of the group, and the election is in force; and
- each election was made in accordance with the AML/CTF Rules; and
- no member of the group is a member of another designated business group; and
- each member of the group satisfies such conditions (if any) as are specified in the AML/CTF Rules; and
- the group is not of a kind that, under the AML/CTF Rules, is ineligible to be a designated business group.
Section 10 of the AML/CTF Act defines a 'designated remittance arrangement' as being an arrangement where at least one of the following is a 'non-financier':
- the person who accepts an instruction from the transferor entity for the transfer of money or property under the remittance arrangement
- a person who makes money or property available to the ultimate beneficiary as a result of the transfer under the remittance arrangement
- the person who arranges for money or property to be made available to the ultimate beneficiary as a result of the transfer under the remittance arrangement.
Accordingly, if both:
- the person accepting the instruction and
- the person that makes the money available, or arranges for it to be made available to an ultimate beneficiary
are financial institutions, such arrangements for transferring money or property are not 'designated remittance arrangements'.
A domestic listed public company means a company that is registered under the Corporations Act 2001 (other than a registered foreign company) that is included in an official list of a domestic stock exchange.
The AML/CTF Act defines e-currency (or e-money or digital currency) as an internet-based, electronic means of exchange not issued by, or under the authority of, a government body. For example, the currency must be backed by a precious metal or bullion.
'Eligible gaming machine venues' are venues where:
- a person (the first person) is in control of a particular venue, and
- one or more gaming machines are located at the venue, and
- the first person is neither the owner nor the lessee of the gaming machines, and
- such other conditions (if any) as are specified in the AML/CTF Rules are satisfied
- the venue is an eligible gaming machine venue, and
- the first person is the controller of the venue.
An 'eligible gaming machine venue' is therefore a venue where the person who controls the venue is neither the owner nor the lessee of the gaming machines located at the venue. This addresses situations where large gaming companies provide machines that are neither owned nor leased by the persons in control of the venues in which the machines are located.
'Gaming machine' is a machine for playing a game where:
- the game is played for money or anything else of value, and
- the game is game of chance or of mixed chance and skill.
Government body means:
- the government of a country; or
- an agency or authority of the government of a country; or
- the government of part of a country; or
- an agency or authority of the government of part of a country.
An immediate family member of a politically exposed person includes:
- a spouse
- a de facto partner (a person who is considered by national law as equivalent to a spouse)
- children and their spouses or de facto partners
International organisation means an organisation:
- established by formal political agreement by two or more countries and that agreement has the status of an international treaty; and
- is recognised in the law of the countries which are members of the organisation.
For a company, corporation sole or body politic, key personnel are individuals who are:
- a beneficial owner (in respect of a company, any individual who owns through one or more shareholdings more than 25 per cent of the issued capital of the company);
- a director or secretary of a body corporate;
- a person who makes or participates in making decisions that affect the whole or part of the business of a body corporate;
- a person who has the capacity to significantly affect the corporation’s financial standing;
- a person in accordance with whose wishes or instructions the directors of the corporation are accustomed to acting;
- a receiver, or receiver and manager of the property of the corporation;
- an administrator of a deed of company arrangement executed by the corporation;
- a liquidator of the corporation;
- any employee or agent of the body corporate with duties of such responsibility that his or her conduct may be fairly presumed to represent the body corporate’s policy; for example, a person that has decision-making powers in respect to obligations under the AML/CTF Act.
For a sole trader, trust or partnership, key personnel are individuals who are:
- an employee or agent with duties of such responsibility that his or her conduct may fairly be assumed to represent the policy of the individual, trust or partnership; for example, a person with decision-making powers in respect to obligations under the AML/CTF Act.
AUSTRAC expects that the individual appointed as the AML/CTF Compliance Officer of a business is listed as one of the key personnel of a business applying for registration.
- an advance of money
- the provision of credit or any other form of financial accommodation
- full or partial payment of a debt, which can be on account of, on behalf of, or at the request of, a person where there is an obligation (whether expressed or implied) to repay the amount
- satisfying another person's debt
- any transaction which in substance effects a loan of money.
- physical currency
- money held in an account, whether denominated in Australian currency or any other currency
- money held on deposit, whether denominated in Australian currency or any other currency
- e-currency, however amounts of the e-currency are expressed
A 'non-financier' is a person who is not:
- an ADI
- a bank
- a building society
- a credit union, or
- a person specified in the AML/CTF Rules.
To date, no persons have been specified to be a non-financier in the AML/CTF Rules.
Chapter 23 of the AML/CTF Rules provides an exception from the definition of 'non-financier' for persons carrying on an accounting practice or a law practice.
A 'permanent establishment' is either:
- a place at or through which the person carries on any activities or business
- a place where the person is carrying on activities or business through an agent
- where the service is provided on a mobile basis or while travelling - the country where the person (or their agent) provides a service.
A 'person' is:
- an individual (that is, a natural person)
- a company (for example, private company, public company, public and listed company or a foreign company)
- a trust (for example, discretionary family or unit)
- a partnership (incorporated and unincorporated)
- an incorporated or unincorporated association
- a corporation sole
- a body politic.
'Physical currency' is the coin and printed money (whether of Australia or of a foreign country) that:
- is designated as legal tender, and
- circulates as, and is customarily used and accepted as, a medium of exchange in the country of issue.
A 'politically exposed person' (PEP) is an individual:
- who holds a prominent public position or function in a government body or an international organisation, or
- an immediate family member or close associate of an individual who holds a prominent public position or function in a government body or an international organisation.
There are three categories of PEPs:
- Domestic PEPs are individuals who are entrusted domestically with a prominent public position or function in an Australian government body
- Foreign PEPs are individuals who are entrusted with a prominent public position or function in a government body of a foreign country.
- International organisation PEPs are individuals who are entrusted with a prominent public position or function in an international organisation.
A 'prescribed foreign country' for the purposes of the AML/CTF Act is a foreign country declared by the AML/CTF Regulations to be a prescribed foreign country. The Australian Government has declared via Regulation under the AML/CTF Act that Iran and the Democratic People's Republic of Korea (DPRK) are prescribed foreign countries and, consequently, are subject to AML/CTF countermeasures.
A prominent public position or function in a government body or an international organisation includes:
- Head of State or head of a country or government
- government minister or equivalent senior politician
- senior government official
- Judge of the High Court of Australia, the Federal Court of Australia or a Supreme Court of a State or Territory, or a Judge of a court of equivalent seniority in a foreign country or international organisation
- governor of a central bank or any other position that has comparable influence to the Governor of the Reserve Bank of Australia
- senior foreign representative, ambassador, high commissioner
- high-ranking member of the armed forces
- board chair, chief executive, or chief financial officer of, or any other position that has comparable influence in, any State enterprise or international organisation.
'Property' is any legal or equitable estate or interest in real or personal property including a contingent or prospective one, but does not include money.
Property refers to a possession or possessions owned by a person that can be tangible or intangible.
Reasonable measures means, appropriate measures which are commensurate with the money laundering or terrorist financing risks.
'Reliable and independent documentation' includes but is not limited to:
- an original primary photographic identification document;
- an original primary non-photographic identification document; and
- an original secondary identification document.
Note: This is not an exhaustive definition. A reporting entity may rely upon other documents not listed above as reliable and independent documents, where that is appropriate having regard to ML/TF risk.
'Primary non-photographic identification document', 'primary photographic identification document' and 'secondary identification document' are defined in chapter 1 of the AML/CTF Rules.
Reliable and independent electronic data is not defined in the AML/CTF Act or AML/CTF Rules. However, reporting entities are required take into account the following factors in determining whether the electronic data is reliable and independent:
- the accuracy of the data
- how secure the data is
- how the data is kept up-to-date
- how comprehensive the data is (for example, by reference to the range of persons included in the data and the period over which the data has been collected)
- whether the data has been verified from a reliable and independent source
- whether the data is maintained by a government body pursuant to legislation
- whether the electronic data can be additionally authenticated.
See Part 4.10 of the AML/CTF Rules for further information on verification from reliable and independent electronic data.
The Remittance Sector Register contains the following details of all registered remitters:
- legal name and trading names
- Australian Business number (ABN), Australian Company Number (ACN), Australian Registered Body Number (ARBN) (as applicable)
- address of the principal place of business
- any conditions placed on the entity's registration.
All reporting entities are required to enrol with AUSTRAC and be entered on AUSTRAC's Reporting Entities Roll. The roll is not available publicly and is used by AUSTRAC to understand its regulated population.
Sanctions are measures not involving the use of armed force that are imposed in situations of international concern, including the grave repression of human rights, the proliferation of weapons of mass destruction or their means of delivery, or armed conflict.
They impose restrictions on activities that relate to particular countries, goods and services, or persons and entities.
Australian sanction laws implement United Nations Security Council sanctions regimes and Australian autonomous sanctions regimes.
Senior managing official means an individual who makes, or participates in making, decisions that affect the whole, or a substantial part, of the business of a customer of a reporting entity or who has the capacity to affect significantly the financial standing of a customer of a reporting entity.