After fielding a number of calls from publicans concerned about their anti-money laundering obligations, TheShout asked AHA NSW CEO, Sally Fielke, to clarify the situation.
Anti-Money Laundering Obligations – Why are hotels caught?
The Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) (“the AML/CTF Act”) commenced on 12 December 2006 and was enacted to attempt to combat money laundering and terrorism financing on both a domestic and international level.
The AML/CTF Act imposes obligations on organisations (which are called ‘reporting entities’) that provide the designated services under the AML/CTF Act. Designated services include the financial and banking sectors, gaming, bullion dealers and some professions such as accountants and lawyers.
These obligations relate to customer due diligence, reporting requirements, record-keeping and developing and maintaining an AML/CTF program in an attempt to minimise the risks of money being laundered through Australian businesses.
By virtue of having gaming machines, hotels come within the definition of reporting entities and therefore, are required to comply with the obligations under the AML/CTF Act. Hotels which provide international currency exchange may also be considered reporting entities, depending on the nature and level of their currency exchange services to their guests.
There are several key obligations under the AML/CTF Act including:
- Registering as a reporting entity and submitting an annual return to the Australian Transaction Reports Analysis Centre (“AUSTRAC”) which has the regulatory functions for supervising monitoring and enforcement of the AML/CTF Act. This can be done online at by clicking here;
- Implimentation and ongoing maintenance of an AML/CTF program in the hotel including staff training,
- Verifying customer identification and reporting threshold transactions and suspicious matters to AUSTRAC.
Since late 2006, the AHA (NSW) has been providing assistance to members in order to help them comply with their obligation under the AML/CTF Act.
If your venue falls into the above designated services and you are not sure on your obligations, call us today. The first step is to ensure that members are aware of their obligations to register as a reporting entity and submit their annual returns by 31 March of each year.
The most recent annual return for the calendar year of 2009 was required to be lodged on or before 31 March 2010. Members were advised via direct email and articles in Member Update of the impending deadline however, if you have not yet completed your annual return for 2009, you should do so immediately.
In addition to the above, the AML/CTF Act requires that reporting entities have an AML/CTF program in place in order to identify, mitigate and manage the risks of potentially facilitating money laundering and/or terrorism financing through the provision of their designated services. Members have the option of utilising the AHA AML/CTF Kit, or engaging external consultants, such as such as Risk Consultants Australia, to develop a program for them. The AHA AML/CTF Kit and contact details for Risk Consultants Australia can be found by clicking here.
Members also have ongoing requirements to report threshold transactions e.g. gaming payouts of $10,000 or more within 10 business days and/or suspicious transactions e.g. where you suspect the patron is not who they purport to be within 3 business days to AUSTRAC.
Both civil and criminal penalties apply for non compliance with the AML/CTF Act, with the maximum civil penalty being $11 million for corporations and $2.2 million for individuals.
For further information on AUSTRAC, the AML/CTF Act, or to register for Austrac online, click here. For any other information, please contact the AHA (NSW) Legal and Industrial Affairs department on (02) 8218 1855.