Senior manager (Reform)
Learn who can be a senior manager for your anti-money laundering and counter-terrorism financing (AML/CTF) program and their obligations.
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You must appoint a senior manager, or multiple senior managers, to make key AML/CTF decisions. This includes approving AML/CTF programs, updates to these programs and certain business relationships.
A senior manager must fulfil these obligations personally. They can’t delegate them. The senior manager’s functions under the Anti-Money Laundering and Counter-Terrorism Financing 2006 Act (the Act) involve directly meeting particular obligations, such as approving AML/CTF policies and risk assessments.
In comparison, the governing body and AML/CTF compliance officer generally involve ‘overseeing’ compliance, meaning that they don’t need to meet all AML/CTF obligations personally.
If your business has multiple senior managers, any of these senior managers can meet the below obligations. You may also assign certain senior managers to complete specific tasks. For example, you may have one senior manager approving the AML/CTF program and another approving certain customer relationships.
Who can be a senior manager
This section refers to the Act section 5.
A senior manager is an individual who makes, or is involved in making, decisions affecting all or a substantial part of your business.
Who is a senior manager will depend on your business, particularly the person's ability to make or influence strategic or operational decisions about how your business is conducted.
This may include a person who makes or influences decisions that aren’t related to AML/CTF, noting this person will still need to be able to meet their AML/CTF obligations and receive appropriate training.
For example, a senior manager could include:
- for a smaller business, the business owner, director or person responsible for managing broader risks or operations
- a general manager
- a money laundering reporting officer who has a leadership role in the financial crime area of an authorised deposit taking institution.
A person doesn’t need to be a C-suite executive to be a senior manager.
Learn more about personnel due diligence and training.
AML/CTF program
This section refers to the Act section 26P.
A senior manager must approve your risk assessment, AML/CTF policies and any updates to either.
Oversight
This section refers to the Rules section 5–5(1).
Your AML/CTF policies must ensure a senior manager approves, or is informed of, certain business relationships before they’re entered into.
A senior manager must approve entering into any written agreement or arrangement with a third party that will collect and verify CDD information for you.
High risk customers
This section refers to the Rules section 5–5(1).
A senior manager must approve your business starting to provide a designated service to a customer you’ve established on reasonable grounds is a:
- foreign politically exposed persons (PEP)
- high-risk customer that’s also a domestic PEP
- high-risk customer that’s also an international organisation PEP.
This obligation applies to customers, or beneficial owners of customers, who are these kinds of PEPs. It also applies if a customer is receiving the service on behalf of a person who is one of these PEPs.
An existing customer, beneficial owner or agent may become a foreign PEP or high-risk domestic or international PEP. In these cases, you must obtain senior manager approval before continuing to provide designated services to the PEP.
Nested services relationship
This section refers to the Rules sections 5–5(1).
A senior manager must give approval before your business starts to provide a designated service to a customer in a nested services relationship.
AML/CTF policies must also outline any other circumstances where a senior manager must approve the business:
- starting to provide designated services
- continuing a business relationship.
The AML/CTF policies must identify who is authorised to give the required approval in these circumstances.
Demonstrating compliance
This section refers to the Act section 116(1).
You must keep records showing how your senior managers have met their obligations.
We expect these records to show all of the following:
- the name of each person appointed as a senior manager and their AML/CTF responsibilities
- when each person was appointed as a senior manager
- the reasons the person qualifies as a senior manager, including the aspects of their current role that allow them to make, or influence, decisions affecting all or a substantial part of your business.
When approving business relationships, we expect these records to show all of the following:
- which customers were escalated to the senior manager for approval or information, including the customer's name and the reasons for escalation
- the name of the senior manager who was authorised to make the decision to approve or not approve the action and their role in your business
- the date of the decision and the reason the decision was made.
Senior managers may consider version control when approving AML/CTF policies and the risk assessment. You can use this process to record key details in the document such as the:
- approval date
- approver
- document version
- review frequency
- next review date.
Related pages
This guidance sets out how we interpret the Act, along with associated Rules and regulations. Australian courts are ultimately responsible for interpreting these laws and determining if any provisions of these laws are contravened.
The examples and scenarios in this guidance are meant to help explain our interpretation of these laws. They’re not exhaustive or meant to cover every possible scenario.
This guidance provides general information and isn't a substitute for legal advice. This guidance avoids legal language wherever possible and it might include generalisations about the application of the law. Some provisions of the law referred to have exceptions or important qualifications. In most cases your particular circumstances must be taken into account when determining how the law applies to you.