The Bills to impose a levy to fund AUSTRAC's supervisory
activities under the Anti-Money Laundering and
Counter-Terrorism Financing Act 2006 (Cth (AML/CTF
Act) were passed by Federal Parliament on 22 June 2011,
received Assent on 28 June 2011 and commenced (for the most part)
on 1 July 2011.
The only significant amendments made during the Bills'
passage through Parliament are:
a requirement for an independent review to be made by 31
December 2013 – the review must include the operation and
calculation methodology of the levy and a consultation process with
a delay in the commencement of the "late payment
penalty" provision giving leviable entities until 31 December
2011 to pay the levy for the 2011/2012 financial year, before a
The Acts enable AUSTRAC to collect the levy from approximately
8,500 entities which provide "designated services" under
the AML/CTF Act (Leviable Entities). Designated services typically
encompass banking, lending, certain financial services, gambling
services, bullion dealing and certain cash handling activities.
Providers of these services are already required to implement an
AML/CTF program, report certain transactions to AUSTRAC and lodge
an annual compliance report.
Calculation of the levy
According to a recently released draft Ministerial Determination
to be made under the Bills, the levy will consist of a base
component, a large entity component and a transaction reporting
The base component is to be A$284 per annum and will be imposed
on all Leviable Entities with five or more employees (or with
earnings of more than A$100 million).
The large entity component will be calculated on the basis of
the earnings of the entity (or the entity's corporate group) as
set out below:
Large Entity Component (2011 –
Less than A$100m
Between A$100m and A$200m
Between A$200m and A$500m
Between A$500m and A$1bn
Between A$1bn and $A5bn
Greater than A$5bn
For the purpose of determining the Large Entity Component for a
foreign entity or a local subsidiary of a foreign group, only the
Australian business earnings will be taken into account. However,
if the Australian business earnings are less than A$100 million but
the entity or group's worldwide earnings are more than A$100
million, a large entity component of A$14,000 will still be
The transaction reporting component is to be A$0.01 per
transaction which is required to be reported to AUSTRAC, plus
A$0.000005066 per dollar of such transactions. For example, a A$100
million transaction which is reported to AUSTRAC would attract a
transaction reporting component of A$506.61.
Impact on Leviable Entities
The rationale for basing the large entity component of the levy
on the earnings of the entity or group is that AUSTRAC incurs
greater expenses in regulating larger entities, because larger
entities have more customers and typically provide more complex
However, this calculation does not take into account the extent
to which a Leviable Entity's earnings are related to the
provision of "designated services". As a result, an
entity with high earnings may incur a large entity component, even
though the entity only provides a small volume of "designated
Accordingly, while the levy is unlikely to represent a material
or significant cost for most Leviable Entities, it may have a
disproportionate effect on those Large Entities that only provide
"designated services" as an incidental part of their
Exemptions under the AML/CTF Act
"Exempt Entities" will not be required to pay the
levy. "Exempt Entities" are those entities that provide
designated services but are not obliged to establish an AML/CTF
Program because the designated services fall within an exemption
set out in the AML/CTF Rules. For example, energy participants
registered under the National Electricity Rules or Wholesale
Electricity Market Rules are not obliged to establish an AML/CTF
Program for over-the-counter derivatives relating to the wholesale
price of electricity, gas or renewable energy certificates, when
transacting with each other.
These entities are excluded from the levy requirement on the
basis that AUSTRAC does not incur material costs in regulating
these entities. However, such entities which have even a single
transaction that is not covered by an exemption would be required
to pay the levy, calculated on the basis of their total Australian
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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