Proceeds of Crime (Consequential Amendments and Transitional Provisions) Act 2002 (86 of 2002)

Schedule 3   Retaining financial transaction documents

Financial Transaction Reports Act 1988

6   After Part VI

Insert:

Part VIA - Retaining financial transaction documents

Division 1 - Meaning of key terms used in this Part

40C - Definitions

In this Part:

account means any facility or arrangement through which a financial institution accepts deposits or allows withdrawals, and includes a facility or arrangement for:

(a) an interest bearing deposit lodged for a fixed period; and

(b) a safety deposit box.

financial transaction document , in relation to a financial institution, means any document that relates to a financial transaction carried out by the institution in its capacity as a financial institution and, without limiting the generality of this, includes a document relating to:

(a) the opening, operating or closing of an account held with the institution; and

(b) the opening or use of a safety deposit box held with the institution.

40D Meaning of customer-generated financial transaction document

In this Part:

customer-generated financial transaction document , in relation to a financial institution, means a financial transaction document of the institution:

(a) that relates to one or more of the following financial transactions:

(i) the opening or closing by a person of an account with the institution;

(ii) the operation by a person of an account with the institution;

(iii) the opening or use by a person of a safety deposit box held by the institution;

(iv) the telegraphic or electronic transfer of funds by the institution on behalf of a person to another person;

(v) the transmission of funds between Australia and a foreign country or between foreign countries on behalf of a person;

(vi) an application by a person for a loan from the institution (where a loan is made to the person pursuant to the application); and

(b) that is given to the institution by or on behalf of the person (whether or not the document is signed by or on behalf of the person).

40E Meaning of minimum retention period

The minimum retention period , in relation to a financial transaction document of a financial institution, is:

(a) if the document relates to the opening of an account with the institution - the period of 7 years after the day on which the account is closed; or

(b) if the document relates to the opening by a person of a safety deposit box held by the institution - the period of 7 years after the day on which the safety deposit box ceases to be used by the person; or

(c) in any other case - the period of 7 years after the day on which the transaction takes place.

Division 2 - Retaining financial transaction documents

40F - Customer-generated financial transaction documents not relating to operation of accounts

(1) A financial institution is guilty of an offence if:

(a) it does not retain, for the minimum retention period, the original of a customer-generated financial transaction document; and

(b) the document does not relate to the operation of an account held with the institution; and

(c) the document is not a cheque or payment order; and

(d) the financial institution is not required by law to release the original before the end of the minimum retention period.

Penalty: 100 penalty units.

(2) An offence against this section is an offence of strict liability.

Note 1: For strict liability , see section 6.1 of the Criminal Code.

Note 2: This section does not apply to documents relating to certain transferred accounts (see sections 40L and 40P).

40G - Releasing original documents if required by law

(1) A financial institution is guilty of an offence if:

(a) before the end of the minimum retention period, it releases the original of a document that, but for paragraph 40F(1)(d), it would be obliged by section 40F to retain; and

(b) it does not retain a complete copy of the document until one of the following occurs:

(i) the period ends;

(ii) the original is returned.

Penalty: 100 penalty units.

(2) A financial institution is guilty of an offence if it does not maintain a register of documents released as mentioned in paragraph (1)(a).

Penalty: 100 penalty units.

(3) An offence against this section is an offence of strict liability.

Note 1: For strict liability , see section 6.1 of the Criminal Code.

Note 2: This section does not apply to documents relating to certain transferred accounts (see sections 40L and 40P).

40H - Customer-generated financial transaction documents relating to operation of accounts

(1) A financial institution is guilty of an offence if:

(a) it does not retain, for the minimum retention period, either the original or a copy of a customer-generated financial transaction document; and

(b) the document relates to the operation of an account held with the institution; and

(c) the document is not a cheque or payment order.

Penalty: 100 penalty units.

(2) Subsection (1) does not apply to a document that relates to a single deposit, credit, withdrawal, debit or transfer of an amount not exceeding:

(a) $200; or

(b) such higher amount as is specified in the regulations for the purposes of this subsection.

Note 1: A defendant bears an evidential burden in relation to the defence in subsection (2) (see subsection 13.3(3) of the Criminal Code).

Note 2: Subsection (1) also does not apply to documents relating to certain transferred accounts (see sections 40L and 40P).

(3) An offence against this section is an offence of strict liability.

Note: For strict liability , see section 6.1 of the Criminal Code.

40J - Retaining other financial transaction documents

(1) A financial institution is guilty of an offence if:

(a) it does not retain, for the minimum retention period, either the original or a copy of a financial transaction document that is not a customer-generated financial transaction document; and

(b) retaining the document is necessary to preserve a record of the transactions concerned; and

(c) the document is not a cheque or payment order.

Penalty: 100 penalty units.

(2) Subsection (1) does not apply to a document that relates to a single deposit, credit, withdrawal, debit or transfer of an amount not exceeding:

(a) $200; or

(b) such higher amount as is specified in the regulations for the purposes of this subsection.

Note 1: A defendant bears an evidential burden in relation to the defence in subsection (2) (see subsection 13.3(3) of the Criminal Code).

Note 2: Subsection (1) also does not apply to documents relating to certain transferred accounts (see sections 40L and 40P).

(3) An offence against this section is an offence of strict liability.

Note: For strict liability , see section 6.1 of the Criminal Code.

Division 3 - Obligations relating to active ADI accounts transferred to another ADI

40K - Transferor ADI must give documents to transferee ADI

An ADI (the transferor ADI ) is guilty of an offence if:

(a) a document is in its possession in fulfilment of an obligation imposed on it by section 40F, subsection 40G(1) or section 40H or 40J; and

(b) the document relates to an active account that has been, or is proposed to be, transferred to another ADI (the transferee ADI ) under:

(i) a law of the Commonwealth or of a State or Territory; or

(ii) an arrangement between the transferor ADI and the transferee ADI; and

(c) the transferor ADI intentionally fails to give the relevant document to the transferee ADI within the 120-day period beginning 30 days before the transfer of the account.

Penalty: 10 penalty units.

40L - Compliant transferor ADIs released from retention obligations

Sections 40F to 40J do not apply to the transferor ADI, in relation to the document, if it gave the original and all copies of the document to the transferee ADI within the 120-day period beginning 30 days before the transfer of the account.

Note: A defendant bears an evidential burden in relation to the defence in this section (see subsection 13.3(3) of the Criminal Code).

40M - Retention obligations of transferee ADIs

If the transferee ADI is given the original and all copies of the document within the 120-day period beginning 30 days before the transfer of the account, this Part applies to the transferee ADI in relation to the document as follows:

(a) if the document was covered by paragraphs 40F(1)(a) to (d) - as if the document were covered by those paragraphs in relation to the transferee ADI;

(b) if the document was covered by subsection 40H(1) - as if the document were covered by that subsection in relation to the transferee ADI;

(c) if the document was covered by subsection 40J(1) - as if the document were covered by that subsection in relation to the transferee ADI;

(d) in any case - as if the minimum retention period applicable to the document were the period of 7 years after the day on which the transferred account is closed.

Division 4 - Obligations relating to closed ADI accounts transferred to another ADI

40N - Transferor ADI may give documents to transferee ADI

An ADI (the transferor ADI ) may give the original and copies of a document (the second document ) relating to an account to another ADI (the transferee ADI ) if:

(a) the transferor ADI has given another document (the first document ) relating to the same account to the transferee ADI in accordance with section 40K; and

Note: Paragraph 40K(1)(c) requires the document to have been given during a 120-day period.

(b) the second document is in the transferor ADI's possession in fulfilment of an obligation imposed on it by section 40F, subsection 40G(1) or section 40H or 40J; and

(c) the second document relates to a closed account; and

(d) the transferor ADI and the transferee ADI agree in writing that the second document should be given by the transferor ADI to the transferee ADI within the 120-day period relating to the giving of the first document.

40P - Compliant transferor ADIs released from retention obligations

Sections 40F to 40J do not apply to the transferor ADI, in relation to the second document, if it gave the original or a copy of that document to the transferee ADI within the 120-day period relating to the giving of the first document.

Note: A defendant bears an evidential burden in relation to the defence in this section (see subsection 13.3(3) of the Criminal Code).

40Q - Retention obligations of transferee ADIs

If the transferee ADI is given the original or a copy of the second document within the 120-day period relating to the giving of the first document, this Part applies to the transferee ADI in relation to the second document as follows:

(a) if the second document was covered by paragraphs 40F(1)(a) to (d) - as if the second document were covered by those paragraphs in relation to the transferee ADI;

(b) if the second document was covered by subsection 40H(1) - as if the second document were covered by that subsection in relation to the transferee ADI;

(c) if the document was covered by subsection 40J(1) - as if the document were covered by that subsection in relation to the transferee ADI;

(d) in any case - as if the minimum retention period applicable to the second document were the period of 7 years after the day on which the account was closed.

Division 5 - Miscellaneous

40R - Retrieving documents must be reasonably practicable

(1) A financial institution is guilty of an offence if:

(a) it is required to retain documents under this Part; and

(b) does not retain and store them in a way that makes their retrieval reasonably practicable.

Penalty: 100 penalty units.

(2) An offence against this section is an offence of strict liability.

Note: For strict liability , see section 6.1 of the Criminal Code.

40S - This Part does not limit any other retention obligations

This Part does not limit any other obligation of a financial institution to retain documents.