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Think Terrorism Wont Touch You: Think Again

Second tranche of the Anti-Money Laundering Act - February 2009

The purpose of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (‘AML Act’) is to address the risk of money laundering in Australia and the threat to national security caused by the financing of terrorism.

The first set of reforms introduced last year covered the financial sector, including banks, credit unions, building societies, trustees, casinos, TAB betting services and bullion dealers. The second tranche will cover:

• Real estate agents
• Dealers in precious metals and stones
• Accountants, lawyers and company service providers in respect of a range of non-financial transactions.

These non-financial transactions include but are not limited to:

• company formations
• the establishment of trusts
• management activities of companies
• changes to officeholders, registered offices and principal places of business.

Depending on the services you offer to your clients, some of your services may fall within the designated services set out in Table 5 and 6 of the proposed second tranche of the AML Act (can be found here). If you are in the business providing a designated service your business will be classified as a reporting entity and will be required to collect information and carry out certain procedures regarding the verification of a customer’s identity before providing the designated service.

This legislation will have a major impact on the business models of a number professional organisations, not to mention the cost and efficiencies of doing business in Australia. Therefore, it is imperative that our industry be consulted in the drafting of this AML Bill. As a result, the Committee of Business Incorporators Incorporated (CBIA Inc) has been established; the initiative of seven founding member businesses located throughout Australia which have recognised the need for the creation of a peak industry body to represent the company formation and registry industry - Espreon Corporate Services is one of these founding members.

The founding members of CBIA Inc determined that financial efficiencies and effectiveness in relation to the challenges posed by the second tranche of the AML Act could only be achieved by forming and industry body to collectively advise and represent the businesses that make up the industry. The objectives of CBIA Inc are -

(a)	To represent and advance the company formation and company compliance industry within Australia.
(b)	To provide industry representation with all levels of government and their agencies in respect of programs, policies, acts and regulations that impact upon the industry.
(c)	To affiliate with other bodies and take such action as may be considered appropriate to ensure that the industry is adequately represented at all levels of government and the community.
(d)	To develop uniform practices within the industry to comply with all legislation governing the industry.
(e)	To adopt a role providing or promoting knowledge and administrative infrastructure to the industry.
(f)	To do all things that are incidental or conducive to the attainment of these objects

It is considered imperative that action be taken now as the draft Bill is currently being written and is expected to be published in February 2009. The submissions by CBIA will seek clarification in respect of the wording of the designated services, the definitions of the customer and a ‘carve out’ from compliance with the AML Act in respect of some of the designated services.

If you would like to find out more about this association or would like to become a member of CBIA, please contact Russell Scott at Espreon Corporate Services (on 02 8846 1300) or log on to the CBIA website at www.cbia.org.au.