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Regulation Impact Statement summary

Cancellation and suspension of a remittance dealer's registration

RIS preferred option

  • Rules under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Rules) provide the CEO of AUSTRAC with the power to cancel or suspend registration of remittance dealers. The preferred option is for the rules to specify other matters which the CEO could consider in these decisions, including where a registered remitter or any of its key personnel has been:
    • Charged, prosecuted and/or convicted in relation to money laundering, financing of terrorism, terrorism, people smuggling, fraud, a serious offence, an offence under the AML/CTF Act or an offence under the Financial Transaction Reports Act 1988 (FTR Act);
    • Subject to a civil penalty order made under the AML/CTF Act; and
    • 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 and which reflect adversely on the person’s competence, diligence, judgement, honesty or integrity.

Key Points from the RIS

  • Currently, the AUSTRAC CEO is not always able to respond to new and emerging threats.
  • There is also a lack of certainty for the remittance sector regarding the grounds for cancellation and suspension.

Benefits

  • The primary beneficiaries will be the community as the AUSTRAC CEO will be able to better reduce the incidence and risk of misuse of remittance services to hide the proceeds of serious crime or to fund terrorism or crime.

Costs

  • The suspension or cancellation of a person’s registration may result in a loss of income for some remitters. The majority of remittance dealers offer remittance services in conjunction with other business activities, so the overall impact on this part of the sector is expected to be minimal. Rights of review also mitigate the possibility that this power will be used in a frivolous or ad hoc manner.
  • It is difficult to quantify the costs, given that the policy is about reducing uncertainty. However, of a total population of some 6,500 remittance dealers, it is estimated that less than 1 per cent of the population will be directed by the AUSTRAC CEO to cancel or suspend their registration.

Stakeholder views on preferred option

  • Consultation included the release of the draft Rules on the AUSTRAC Website and mailed directly to 3,882 remittance dealers.
  • The comments received were confined to technical, legal or procedural issues.

Other options in the RIS

  • The alternative option assessed in the RIS is to not make AML/CTF Rules. This is not supported on the basis that it would provide a narrow set of grounds for which the AUSTRAC CEO could cancel or suspend registration and may result in persons considered unsuitable entering or operating within the remittance sector.
Last modified: 14/01/2015 13:08