International Law

AML/CTF Act and Australian financial services licence holders

AUSTRAC has released Public Legal Interpretation 2 of 2008 (pdf) which provides AUSTRAC?s legal view of the meaning and scope of item 54 of table 1 in section 6 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006. In particular the Public Legal Interpretation explores the concept of what acting in the capacity of the holder of an Australian financial services licence means in the context of the AML/CTF Act.

Reporting entities providing designated services falling within item 54 have reduced obligations under the AML/CTF Act regarding customer identification and record keeping.

AUSTRAC is of the view that item 54 comprises two distinct elements, both of which must be satisfied for a person to be engaging in an item 54 designated service. Those two elements are that the person providing the designated service must:

• be a person who is the holder of an Australian financial services licence and who is acting in the capacity of the holder of that licence; and
• make an arrangement for a person to receive a designated service (other than a service covered by item 54).

AUSTRAC's interpretation is that if the holder of an Australian financial services licence provides advice, in the capacity of the holder of a licence, to a person and then arranges for a person to receive a designated service that is not a financial service (as defined in the Corprations Act), such as a loan, then item 54 will not apply.

The Public Legal Interpretation contains practical examples of the application of Item 54.

Full post as published by Australian Regulatory Compliance Review on May 15, 2008 (boomark / email).