Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024 (110 of 2024)
Schedule 8 Transfers of value and international value transfer services
Part 1 Transfers of value
Anti-Money Laundering and Counter-Terrorism Financing Act 2006
22 Divisions 1 to 3 of Part 5
Repeal the Divisions, substitute:
Division 1 - Introduction
63 Simplified outline
The following is a simplified outline of this Part.
· An ordering institution, a beneficiary institution and an intermediary institution in a transfer of value must fulfil certain obligations in relation to the transfer.
· The obligations of an ordering institution relate to the information the institution collects, verifies and provides as part of the transfer.
· The obligations of a beneficiary institution relate to the information the institution receives or otherwise obtains as part of the transfer.
· The obligations of an intermediary institution relate to the information the institution receives and provides as part of the transfer.
· Additional obligations apply if the transfer of value is a transfer of a virtual asset.
63A Key terms relating to transfers of value
Ordering institutions
(1) Whether a person is an ordering institution is to be determined in accordance with the AML/CTF Rules.
(2) Without limiting subsection (1), AML/CTF Rules made for the purposes of that subsection may specify the following:
(a) criteria or other requirements that a person must satisfy to be an ordering institution;
(b) circumstances in which a person is an ordering institution.
(4) However, none of the following persons are an ordering institution :
(a) a person who transfers value in circumstances where the transfer is reasonably incidental to the provision of another service unless:
(i) the person is a financial institution; or
(ii) the person is providing an international value transfer service incidentally to a designated service covered by item 50, 50A or 50B of table 1 in section 6; or
(iii) the person is providing an international value transfer service incidentally to a designated service covered by table 3 in section 6;
(b) a person specified in the AML/CTF Rules.
Beneficiary institutions
(5) Whether a person is a beneficiary institution is to be determined in accordance with the AML/CTF Rules.
(6) Without limiting subsection (5), AML/CTF Rules made for the purposes of that subsection may specify the following:
(a) criteria or other requirements that a person must satisfy to be a beneficiary institution;
(b) circumstances in which a person is a beneficiary institution.
(8) However, none of the following persons are a beneficiary institution :
(a) a person who makes value available in circumstances where the making available of the value is reasonably incidental to the provision of another service unless:
(i) the person is a financial institution;
(ii) the person is providing an international value transfer service incidentally to a designated service covered by item 50, 50A or 50B of table 1 in section 6;
(iii) the person is providing an international value transfer service incidentally to a designated service covered by table 3 in section 6;
(b) a person specified in the AML/CTF Rules.
Intermediary institution
(9) A person is an intermediary institution if the person:
(a) in the course of carrying on a business, receives and passes on a transfer message for a transfer of value in a value transfer chain; or
(b) is specified in the AML/CTF Rules.
(10) However, none of the following persons are an intermediary institution :
(a) a person who solely provides the infrastructure that permits persons to send transfer messages for a transfer of value to another person in the value transfer chain;
(b) a person who is specified in the AML/CTF Rules.
Value transfer chain
(11) The following persons are taken to form a value transfer chain :
(a) the ordering institution;
(b) each intermediary institution (if any) between the ordering institution and the beneficiary institution;
(c) the beneficiary institution.
Institutions
(12) Each person in a value transfer chain is an institution .
Payer and payee may be same person etc.
(13) For the purposes of this Act:
(a) the payer and the payee in relation to a transfer of value may be the same person; and
(b) the ordering institution and the beneficiary institution in relation to a transfer of value may be the same person.
Division 2 - Obligations of institutions
64 Obligations of ordering institutions
Scope
(1) This section applies if an ordering institution commences to provide the designated service covered by item 29 of table 1 in section 6.
Note 1: For exemptions, see sections 67 and 67A.
Note 2: An ordering institution may also have obligations under the Autonomous Sanctions Act 2011 and the Charter of the United Nations Act 1945 in relation to persons designated for targeted financial sanctions.
Obligations of ordering institution
(2) Before the ordering institution passes on a transfer message for the transfer of value, or otherwise gives effect to the transfer of value, the ordering institution must:
(a) collect the information specified in the AML/CTF Rules; and
(b) if required by the AML/CTF Rules - verify the information specified in the AML/CTF Rules in accordance with sections 28 and 30 (as applicable).
(3) If the ordering institution and the beneficiary institution for the transfer of value are not the same person, the ordering institution must pass on the information specified in the AML/CTF Rules relating to the transfer of value to the next institution in the value transfer chain.
(4) If the transfer message for the transfer of value does not give effect to the transfer of value then, for the purposes of subsection (3), the message must be passed on before, or at the same time as, the ordering institution gives effect to the transfer of value.
(5) The ordering institution must provide the following information to another institution in the value transfer chain as soon as practicable after receiving a request from the institution for that information:
(a) the information specified by the AML/CTF Rules for the purposes of paragraph (2)(a);
(b) the information specified by the AML/CTF Rules for the purposes of subsection (3).
AML/CTF Rules
(6) AML/CTF Rules made for the purposes of this section may make different provision in relation to different kinds of institutions, information, circumstances or any other matter. This does not limit subsection 33(3A) of the Acts Interpretation Act 1901.
Civil penalty
(7) Subsections (2), (3) and (5) are civil penalty provisions.
65 Obligations of beneficiary institutions
Scope
(1) This section applies if a beneficiary institution commences to provide the designated service covered by item 30 of table 1 in section 6 to a payee.
Note: For exemptions, see sections 67 and 67A.
Obligations of beneficiary institution
(2) The beneficiary institution must take reasonable steps to monitor:
(a) whether it has received the information specified in the AML/CTF Rules relating to the transfer of value; and
(b) whether the information received about the payee is accurate.
(3) If:
(a) the beneficiary institution:
(i) detects that it has not received all of the information mentioned in paragraph (2)(a); and
(ii) has not otherwise obtained the information; or
(b) the beneficiary institution detects that some or all of the information received or otherwise obtained about the payee is not accurate;
then the beneficiary institution must, in accordance with its AML/CTF program, do at least one of the following:
(c) refuse to make the transferred value available to the payee;
(d) take such other action as the beneficiary institution determines.
Note: See also section 26G (reporting entities must comply with AML/CTF policies).
AML/CTF Rules
(4) AML/CTF Rules made for the purposes of this section may make different provision in relation to different kinds of institutions, information, circumstances or any other matter. This does not limit subsection 33(3A) of the Acts Interpretation Act 1901.
Civil penalty
(5) Subsection (2) is a civil penalty provision.
66 Obligations of intermediary institutions
Scope
(1) This section applies if an intermediary institution commences to provide the designated service covered by item 31 of table 1 in section 6 in relation to a transfer of value.
Note 1: For exemptions, see section 67.
Note 2: An intermediary institution may also have obligations under the Autonomous Sanctions Act 2011 and the Charter of the United Nations Act 1945 in relation to persons designated for targeted financial sanctions.
Obligations of intermediary institutions
(2) The intermediary institution must take reasonable steps to monitor whether it has received the information specified in the AML/CTF Rules relating to the transfer of value.
(3) If the intermediary institution detects that it has not received all of the information mentioned in subsection (2), and the intermediary institution has not otherwise obtained the information, the intermediary institution must, in accordance with its AML/CTF program, do at least one of the following:
(a) refuse to pass on the transfer message for the transfer of value;
(b) take such other action as the intermediary institution determines.
Note: See also section 26G (reporting entities must comply with AML/CTF policies).
(4) In passing on a transfer message for a transfer of value, the intermediary institution must include:
(a) information, of a kind specified in the AML/CTF Rules, that is received from the previous institution in the value transfer chain; or
(b) information obtained in accordance with the intermediary institution's AML/CTF program that is relevant to the transfer.
(5) The intermediary institution must provide the information referred to in subsection (4) to another institution in the value transfer chain as soon as practicable after receiving a request from the institution for that information.
AML/CTF Rules
(6) AML/CTF Rules made for the purposes of this section may make different provision in relation to different kinds of institutions, information, circumstances or any other matter. This does not limit subsection 33(3A) of the Acts Interpretation Act 1901.
Civil penalty
(7) Subsections (2), (4) and (5) are civil penalty provisions.
66A Obligations of ordering and beneficiary institutions relating to virtual asset transfers
Scope
(1) This section applies to the transfer of a virtual asset.
Ordering institution obligations
(2) Before commencing to provide the designated service covered by item 29 of table 1 in section 6, an ordering institution must undertake due diligence to determine, on reasonable grounds, whether the virtual asset wallet to which the virtual asset is being transferred is:
(a) a custodial wallet controlled by a person who is licensed or registered under a law that gives effect to the FATF Recommendations; or
(b) a custodial wallet controlled by a person who is not required to be licensed or registered under a law that gives effect to the FATF Recommendations; or
(c) a custodial wallet controlled by a person who is required to be licensed or registered under a law that gives effect to the FATF Recommendations, but is not so licensed or registered; or
(d) a self-hosted wallet controlled by the payee.
(3) The ordering institution must pass on the information specified in the AML/CTF Rules for the purposes of subsection 64(3) relating to the transfer of value to a beneficiary institution if the beneficiary institution is:
(a) a person who is licensed or registered under a law that gives effect to the FATF Recommendations; or
(b) a person who is not required to be licensed or registered under a law that gives effect to the FATF Recommendations.
(4) An ordering institution must not provide the designated service covered by item 29 of table 1 in section 6 if this would involve passing on a transfer message for a transfer of value to a person:
(a) who is required to be licensed or registered under a law that gives effect to the FATF Recommendations; but
(b) is not so licensed or registered.
Beneficiary institution obligations
(5) Before commencing to provide the designated service covered by item 30 of table 1 in section 6, a beneficiary institution must undertake due diligence to determine, on reasonable grounds, whether the virtual asset wallet from which the virtual asset has been transferred is:
(a) a custodial wallet controlled by a person who is licensed or registered under a law that gives effect to the FATF Recommendations; or
(b) a custodial wallet controlled by a person who is not required to be licensed or registered under a law that gives effect to the FATF Recommendations; or
(c) a custodial wallet controlled by a person who is required to be licensed or registered under a law that gives effect to the FATF Recommendations, but is not so licensed or registered; or
(d) a self-hosted wallet controlled by the payer.
(6) A beneficiary institution must not provide the designated service covered by item 30 of table 1 in section 6 in relation to a transfer of value until the beneficiary institution has received or otherwise obtained the information specified in the AML/CTF Rules for the purposes of subsection 65(2) in relation to the transfer.
(7) A beneficiary institution must not provide the designated service covered by item 30 of table 1 in section 6 if:
(a) the virtual asset wallet from which the virtual asset has been transferred is a custodial wallet controlled by a person who is required to be licensed or registered under a law that gives effect to the FATF Recommendations; and
(b) the person is not so licensed or registered.
Civil penalty
(8) Subsections (2) to (7) are civil penalty provisions.
Exceptions
(9) Subsection (3) does not apply if:
(a) either:
(i) the ordering institution has established on reasonable grounds that the beneficiary institution is not capable of receiving the information securely; or
(ii) the ordering institution reasonably believes that there is a risk that the beneficiary institution is not capable of safeguarding the confidentiality of the information; and
(b) the ordering institution makes and keeps a record of the reasons for not passing on the information.
(10) Subsection (6) does not apply if:
(a) the beneficiary institution has established on reasonable grounds that an institution in the value transfer chain is not capable of passing on the information securely; and
(b) in accordance with the beneficiary institution's AML/CTF program, the beneficiary institution appropriately identifies, assesses, mitigates and manages the risks of money laundering, financing of terrorism and proliferation financing that the beneficiary institution may reasonably face in providing the designated service.
(11) A person who wishes to rely on subsection (9) or (10) bears an evidential burden in relation to that matter.