Designated business groups (DBG)

A designated business group (DBG) is a group of two or more reporting entities who join together to share the administration of some or all of their anti-money laundering and counter-terrorism financing obligations (such as an AML/CTF program or record-keeping). Any member of the group can fulfil some of the obligations for the other members. However each reporting entity is still ultimately responsible for meeting its own AML/CTF obligations.

Who can form a designated business group

Reporting entities must meet certain criteria to be eligible to form a DBG, and can be asked to prove how they meet this criteria. For example, they may be asked to show evidence of a joint venture agreement, or show how they are related to other group members (as specified in section 50 of the Corporations Act 2001).

Instances where reporting entities can form a DBG are listed below.

Members of a joint venture

A DBG can be formed by reporting entities in a joint venture where there is a legal contract setting out the arrangements of the joint venture.

To form a DBG, each member must provide designated services under that agreement.

Related companies

A DBG can be formed by reporting entities from related companies. Each member must be one or more of the following:

• a holding company of another member
• a subsidiary of another member
• a subsidiary of a holding company of another member.

A company in a foreign country that would be a reporting entity if it was a resident of Australia can also be part of a DBG made up of related companies.

Registrable remittance service providers

Providers of registrable designated remittance services can form a DBG if they are one of the following:

• a money transfer service provider
• a representative of a money transfer service provider
• a sub-representative of a money transfer service provider (an individual, business or organisation engaged to provide a money transfer service under a sub-representation agreement).

Accounting and legal practices

Accounting and legal practices may also form a DBG if they meet certain conditions. See Part 2.1 of Chapter 2 of the AML/CTF Rules for more information.

Establishing a designated business group

Any two or more reporting entities who want to form a DBG must agree in writing to become members of the group. An entity can only be a member of one DBG at a time.

The group must appoint a nominated contact officer. This individual is responsible for establishing the DBG and notifying AUSTRAC of any changes in the group. A nominated contact officer must be either:

• an officer of one of the DBG members (according to the definition of officer in section 9 of the Corporations Act 2001, such as a director or company secretary)
• the AML/CTF compliance officer of a group member.

To establish the group, the nominated contact officer must submit the appropriate forms via AUSTRAC Online.

• Form 1: Election to be a member of a designated business group – this form is used to elect members to a DBG. A separate form must be submitted for each proposed group member.
• Form 2: Formation of a designated business group – this form is used to establish the DBG.

Templates for these forms are also in chapter 2 of the AML/CTF Rules. These can be submitted in hardcopy, but online submission is preferred.

AML/CTF obligations members of a DBG can share

Members of a DBG can use a joint AML/CTF program instead of an individual program to meet their obligations under the AML/CTF Act. The joint program must include both Part A and Part B requirements. Any DBG member can also choose to administer their own AML/CTF program, separate from the group.

Other AML/CTF obligations that any member can carry out for other members of the group include:

• keeping verification information about requests to credit reporting agencies
• conducting ongoing customer due diligence
• lodging AML/CTF compliance reports with AUSTRAC
• recording designated services
• keeping transaction records and customer transaction documents
• making and retaining records of customer identification procedures
• providing and retaining copies of customer identification records
• making and keeping records of AML/CTF programs, including any variations.

Notifying AUSTRAC of changes to a DBG

DBG members must keep their information up to date. The nominated contact officer must notify us within 14 days if:

• a member leaves the DBG
• a member joins the DBG
• the DBG is terminated
• the nominated contact officer changes
• there are any other changes to the DBG.

You must submit this information to us using Form 3: Variations which is available in AUSTRAC Online.