Summary Of The Report Of The Senate Legal And Constitutional
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Summary Of The Report Of The Senate Legal And Constitutional

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Summary Of The Report Of The Senate Legal And Constitutional Summary Of The Report Of The Senate Legal And Constitutional Document Transcript

  • Summary of the Report of the Legal and Constitutional Legislation Committee on the Exposure Draft of the Anti-Money Laundering and Counter-Terrorism Financing Bill 2005: Summary for website Summary of the Report of the Senate Legal and Constitutional Committee on the Exposure Draft of the Anti-Money Laundering and Counter-Terrorism Financing Bill 2005 On 9 February 2006, the Senate referred the Exposure Draft of the Anti-Money Laundering and Counter-Terrorism Financing Bill 2005 (the Bill) to the Senate Legal and Constitutional Committee (the Senate Committee) for inquiry and report by 13 April 2006. The Senate Committee has released its report and has noted that the Bill gives rise to numerous concerns for industry. The report noted that 33 submissions were received by the Senate Committee, which also held a public hearing on 14 March 2006. The concerns raised in the submissions generally related to: • the consultation process, particularly the timeframe for consultation (given that the majority of the draft Rules were not released in good time for consideration during the consultation process); • the prescriptive nature of the Bill and the need for a genuine risk-based approach, consistent with the FATF Recommendations and comparable overseas Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) regimes; • the practical impact of the proposed regime, particularly the scope and coverage of the Bill as to what constitutes designated services, complicated and prescriptive customer identification requirements, the lack of provision for electronic verification and the use of intermediaries, onerous reporting obligations, issues relating to the obligation to set up AML/CTF programs, secrecy provisions in the Bill, the resource capabilities of the Australian Transaction Reports Analysis Centre (AUSTRAC), and interaction between the Bill and other legislative regimes; • the possible impact of the AML/CTF regime on the privacy and civil rights of individuals; and • issues specific to the following industries: superannuation, financial planning and insurance. For a more detailed summary of the submissions see (add link to ktrs A0107085737 v 3) In response to these concerns, the Senate Committee took the view that: • although the scope and nature of the ongoing consultations between the Minister for Justice and Customs, the Attorney General's Department, AUSTRAC as well as business and industry groups was commendable, without the full package of draft Rules, industry bodies were not adequately able to analyse the full impact of the proposed regime. It was therefore essential that the complete set of Rules be released for comment, and that the Attorney-General's Department continue to liaise with stakeholders to resolve contentious issues and concerns, prior to the introduction into Parliament of the final version of the Bill, which is likely to differ from the current version. • the Senate Committee's inquiry served as a mechanism for airing and debating concerns associated with the proposed regime. Although not appropriate for the Senate Committee ktrs A0107085294v1 205506276 9.5.2006 Page 1
  • to comment on the technical aspects of the Bill, it strongly encouraged the Minister for Justice and Customs, the Attorney-General's Department and AUSTRAC to utilise the expertise of industry bodies to ensure the measures in the final AML/CTF package are genuinely risk-based, in order to reflect and promote business efficacy. The Senate Committee also encouraged the Attorney General's Department and AUSTRAC to work more closely with industry to achieve greater consensus as to the meaning and application of a 'risk-based approach'; • the adoption of a realistic and workable timeframe for implementation of the new regime was desirable to allow business to undertake appropriate system changes; • an extension of the consultation period to reflect industry concerns about timing issues, and any residual concerns was recommended, particularly given the staggered and late release of the Rules and the fact that some Rules had not yet been released publicly in their entirety. This was of particular concern in light of the fact that a number of industry bodies nominated a period of at least five or six weeks from the date of delivery of the Rules as a minimum timeframe for analysis and completion of submissions. • the proposed regime may potentially impact the privacy and civil rights of individuals in numerous ways. (For a summary of the specific privacy concerns identified by the Committee see http://www.aar.com.au/privacy/news/index.htm#concerns) ktrs A0107085294v1 205506276 9.5.2006 Page 2