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Cash Management Trusts asked to help combat money laundering

The Minister for Justice and Customs, Senator Chris Ellison said today that the investment and finance industry had known for almost 12 months of the need for certain Cash Management Trusts to comply with customer identification requirements.

Senator Ellison said that after extensive consultation and legal advice, AUSTRAC advised industry in December 2001 that some Cash Management Trusts fell within the definition of an account and therefore identification requirements for signatories had to be met.

Senator Ellison said that where CMT had similar characteristics to a bank or other account - including the ability to deposit or withdraw cash, or cheque book facilities - the risks of money laundering were similar, hence the need for the customer identification requirements.

An initial deadline for compliance was set for 31 March 2002, but as a result of industry representations the deadline was first extended to 30 June 2002, then extended for a second time to 31 October 2002.

Senator Ellison said that in all notifications to industry of the deadlines it has been made clear that individual industry members could approach AUSTRAC for a further extension depending on the circumstances of the particular trust. The merits of each request for an extension are considered on a case by case basis.

AUSTRAC is stringently pursuing the deadline in respect of new customers but has granted limited individual extensions to enable the fulfilment of identification requirements for existing customers. To date, no extension has been granted beyond 31 December 2002.

Senator Ellison said AUSTRAC had worked closely with IFSA and individual industry members and rejected any claim to the contrary. "Australia has world recognised best practice for anti-money laundering measures," Senator Ellison said.

"In order to protect the reputation of our finance industry and the security of Australians this has to be maintained." Senator Ellison said that while he supported the use of tax file numbers (TFN) as a means of identification, allowing TFN to be used for this purpose would require a number of amendments to taxation laws.

"I recently asked the Assistant Treasurer, Senator Helen Coonan to consider the possibility of using TFN as a means of identification and she has agreed to look into the merits of this proposal," Senator Ellison said.

Media Contact: Mairi Barton (Senator Ellison) 02 6277 7260 or 0439 300 335

Last modified: 02/07/2014 00:00