What is meant by money laundering and financing of terrorism?

The goal of most criminal activities is profitability. To enjoy the benefits of such non-legitimate profit, criminals usually try to conceal the sources of such non-legitimate profit. Money laundering is the process through which the illegal sources of the profit gained through criminal activities are concealed. Terrorist groups, too, move their funds in order to hide their sources, aims, and intentions. Financing of terrorism includes financing terrorist activities, terrorists, and terrorist organizations.

Money laundering and financing of terrorism are considered very serious crimes.

What are the new rules?

According to the Anti Money Laundering and Counter-Terrorism Financing (AML/CTF) Act passed in 2006, those who provide specialized financial and betting services, or people working in gold and silver trading, must do the following:

• identifying their customers before providing special services for them
• reporting special transactions
• reporting suspicious cases

Why are these new rules enacted?

The Australian government has set the new AMF/CTF rules for the following reasons:

• compliance of the Australian AMF/CTF system with international standards
• reducing the risk of misusing Australian businesses for the purposes of money laundering and terrorism financing
• allowing law enforcement agencies to gather intel on potential criminal and terrorist activities

Whom will the new rules affect?

These new rules are likely to affect the following:

• banks; credit unions; mortgage banks; securities, leasing, and payment companies; issuers of prepaid credit cards; issuers of travel cheques; currency exchange dealers; asset management companies; money dealers; financial planners; life insurers; pension funds; custodial service companies; cash couriers; and securities dealers
• various sectors related to betting, including casinos, bookmarkers, TAB, clubs, bars, online and electronic gaming service providers
• gold and silver traders

When is it likely for you to be affected by these rules?

As a customer, you will be affected in certain circumstances, including:

• opening an account in a bank or some other financial institution
• getting a loan
• buying travel cheques
• sending, receiving, or exchanging money electronically
• participating in betting transactions of over $10,000
• buying or selling gold or silver
• using retirement benefits

How will they affect you?

As a customer, the business with which you are making a deal might ask you to verify your identity. The types of documents you need to verify your identity differ depending on the transaction or the service. For example, if it is realized that the transaction in question has a low risk of money laundering or terrorism financing, providing a driver’s license will suffice. However, for more risky transactions, additional identification documents might be needed.

The identification documents you are likely to be required to provide are:

• passport
• birth certificate
• driving license
• municipal services declaration
• a statement from a bank or some other financial institution

Businesses which are subject to the new rules are also required to implement the AML/CTF program, consisting of ongoing monitoring of customer activities and reporting suspicious cases.

How is your privacy protected?

Reporting entities and Australian government agencies which are responsible for collecting personal information are under the Privacy Act of 1988.

For more information on how to protect your privacy, please call the office of Privacy Commissioner at 1300363992 or visit the following website:

www.privacy.gov.au/business

All the information is provided in the link below:

Attorney-General’s Department – Australian Government