If you provide designated services that have a geographical link to Australia, you are a reporting entity and have anti-money laundering and counter-terrorism financing (AML/CTF) obligations.

To have a geographical link to Australia, you must meet one of the following criteria:

1. you provide a designated service at or through a permanent establishment located in Australia, or

2. you are a resident of Australia and provide a designated service at or through your permanent establishment located in a foreign country, or

3. you are a subsidiary of a company that is a resident of Australia, and provide a designated service at or through your permanent establishment located in a foreign country.

The only exception to the geographical link requirement is a remittance network provider operating a network of affiliates in Australia. Further information on the exception for remittance network providers is available on this page.

What is a permanent establishment?

A permanent establishment is a place at or through which you conduct any activities or business. It also includes conducting activities or business through an agent. You can have more than one permanent establishment.

Mobile services or travelling

If you provide a designated service while operating on a mobile basis or travelling in another country, the designated service is considered to be provided through a permanent establishment in that country.

Criterion one: permanent establishment in Australia

You meet the geographical link requirement if you provide a designated service at or through a permanent establishment located in Australia.

This includes, for example:

• any person or entity providing a designated service at or through physical offices or a business premises in Australia
• foreign persons or entities providing a designated service through branches or offices that are located in Australia
• a person who is travelling to Australia and provides designated services to customers out of a temporary location in Australia.

Providing designated services through a website

If you provide a designated service to Australian customers through an online platform or website, it does not necessarily mean that you meet the geographical link requirement. In order to be a reporting entity, you or your agent must carry on activities related to providing a designated service through a permanent establishment in Australia.

Examples of what may constitute a permanent establishment in Australia include:

Servers located in Australia

If the servers hosting your website are located in Australia and are owned or operated by you, or located on premises owned or operated by you, this would constitute a permanent establishment in Australia.  

If you provide online gambling services you may have other obligations under the Interactive Gambling Act 2001 (Cth) and under state and territory gaming laws.

Office address in Australia

Having an Australian office address does not meet the geographical link requirement by itself.

You meet the geographical link requirement if you or an agent conduct activities or business related to the designated services you provide at or through the Australian office address. This could include your office or agent directly supporting the provision of the designated service.

Australian bank account

Holding an Australian bank account does not meet the geographical link requirement by itself.

If you have an Australian bank account that is operated from an Australian office, the office address will be considered your permanent establishment in Australia if you carry on activities or business there. However, to meet the geographical link requirement you must provide a designated service through that bank account.

For example, a foreign financial institution that holds an account in Australia with an Australian financial institution under a correspondent banking relationship, does not by itself meet the geographic link requirement unless the account is used to provide a designated service.

Criterion two: resident of Australia with branches or offices offshore

You meet the geographical link requirement if you are a resident of Australia providing designated services at or through a permanent establishment in another country.

Check the residency test table on this page to determine whether you are a resident of Australia.

Criterion three: resident of Australia with foreign subsidiaries

You meet the geographical link requirement if

• you are a subsidiary of a company that is a resident of Australia, and
• you provide designated services at or through a permanent establishment in a foreign country.

Check the residency test table on this page to determine whether your company is a resident of Australia.

Who is a resident of Australia?

If you are providing designated services through branches or offices located overseas, you need to assess whether you are a resident of Australia.

If you are a foreign subsidiary, you need to assess whether your parent company is a resident of Australia.

Table: Residency test overview

Exception for remittance network providers

A remittance network provider operating a network of remittance affiliates in Australia is always considered a reporting entity, regardless of whether you meet the geographical link requirement. A remittance network provider does not need to have a ‘permanent establishment’ in Australia in order to be bound by the requirements of the AML/CTF Act.

This is due to the global nature of remittance services where many remittance network providers are based in foreign countries with affiliates operating in Australia.