AUSTRAC has published a report on its June 2011 survey of financial planners and advisers that provide the item 54 designated service (in section 6 of the AML/CTF Act). The survey gathered information about how these entities have understood and implemented their AML/CTF obligations.
Item 54 providers that provide no other designated services to their customers have a significantly reduced suite of obligations under the AML/CTF Act compared to most other entities. For example, they are only required to have and maintain Part B of an AML/CTF program, and are only required to submit suspicious matter reports (SMRs) to AUSTRAC.
The survey included questions relating to:
- Customer identification (‘KYC’)
- Money laundering and terrorism financing risk
- Suspicious matters
- Staff training and monitoring
The results include:
- Very few respondents (3%) relied solely on a product provider’s customer identification procedures when identifying their customers. Most respondents applied either their own customer identification procedures only (37%), or applied their procedures and a product provider’s procedures (53%) when identifying customers.
- Two-thirds of respondents (68%) said they never take on a new customer without meeting them face to face. A significant number (31%) said they sometimes take on new customers without meeting them face to face. AUSTRAC commented that entities are reminded that providing a service to new customers without meeting them face to face may present a heightened ML/TF risk.
- Most respondents (96%) said they did not allow customers to deposit funds into their bank account (not including payment for professional services). Nearly all (99%) said their employees/ authorised representatives would never accept cash on their premises directly from a customer (not including payment for professional services).
- Most respondents (90%) said that their AML/CTF program or other documentation contained an ML/TF risk assessment. However, only slightly more than half of the respondents (55%) said they had in place a method to determine the ML/TF risk rating to apply to their customers. It is AUSTRAC’s expectation that all item 54 providers should have in place a method or procedure to determine the ML/TF risk rating to apply to its customers.
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Posted 11th April 2012 by David Jacobson in Anti-money laundering, Financial Services