Contributions to this article also by Jessica
Last week AUSTRAC published Information Circular No. 76 -
External Administration and AMLCTF Act obligations. The Information
Circular confirms that a company under the control of an external
administrator must still comply with all of its obligations under
the Anti-Money Laundering and Counter-Terrorism Financing Act
The Act imposes certain obligations on a reporting
entity conducting designated services. Section 6 of
the Act identifies 71 separate activities primarily carried out by
the financial services sector, the gaming industry and bullion
dealers. These activities are referred to as designated
services. Any business which carries out designated services
will be covered by the Act and will be a reporting entity
regardless of the industry in which it operates.
Key obligations under the Act include:
adopting, maintaining and complying with the company's
carrying out customer identification procedures
retaining records of certain transactions
lodging transaction reports, suspicious matter reports and
international funds transfer instruction reports, and
lodging compliance reports with AUSTRAC.
Tips for insolvency practitioners
In accepting an appointment, an insolvency practitioner should
determine whether the company over which he or she has been has
appointed conducts designated services and is consequently
a reporting entity for the purposes of the Act. If so, and if it is
intended that the company will continue to trade, then the
practitioner should, as a starting point:
determine whether the company has an AML/CTF program and
compliance officer, and if not then a program should be prepared
and a compliance officer with suitable training should be
review any existing AML/CTF Program to ensure it is compliant
and update the Program if necessary
review the company's procedures and reporting to ensure the
company is compliant
notify AUSTRAC of the appointment and update AUSTRAC with the
details of any replacement AML/CTF contact officer and company
Whilst it may, in appropriate circumstances, be possible for the
practitioner to delegate some of the responsibility for AML/CTF
compliance to employees or directors in the company, in doing so a
practitioner should proceed with caution and keep informed of his
or her obligations. In issuing the Information Circular, AUSTRAC
have made it clear that an external administrator appointed over a
reporting entity cannot ignore the obligations imposed under the
Failure to comply with obligations under the Act can attract
harsh penalties including fines of up to $11 million and/or
imprisonment for up to 10 years.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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