Anti Money Laundering and Counter-Terrorism Financing

How does it apply to you?

A lot has been written in recent weeks about AUSTRAC and the CBA in relation to non-compliance with reporting requirements. We are taking this opportunity to remind you of your obligations as Authorised Representatives in relation to meeting Anti Money Laundering and Counter-Terrorism Financing (AML/CTF) requirements.

At this point in time, accountants do not have specific obligations under the AML/CTF Act but the obligations do apply to you for any activities under your authorisation with Partners SMSF Advice.

These requirements are simple:

  1. You need to identify your clients and verify the identification – the ‘Know your Client’ requirements;
  2. Report anything that may be suspicious, as well as other matters that may need to be reported, such as certain cash transactions; and
  3. Not to tip off the client where you have reported a suspicious matter.

In practical means, this is what you need to do to meet your obligations:

1. ‘Know your client’ requirements

Firstly, you need to identify the individuals that are dealing with, and verify their identity – something that you are likely familiar given most financial institutions will require what is called a ‘100 point’ check.

These details need to be checked at the point in time when the transaction is taking place, i.e. when you are setting up the SMSF.

The details on all individuals you need to check and verify are as follows:

Check

Verify

Document to be used

Name Name, and Drivers licence or passport, or
Residential address One of the address or the date of birth Birth certificate, citizenship certificate or Centrelink pension card plus a notice issued by the ATO/federal/state/local government or utilities provider (e.g.: electricity bill)
Date of birth    

Secondly, you need to confirm the identity of the entities you are dealing with such as the SMSF as a trust and the trustee company.

The trust details you need to check and verify are as follows:

Check

Verify

Document to be used

Full name of the trust Full name of the trust The trust deed or a certified copy of the trust deed
Business name if applicable The verification for an individual or company whichever is appropriate The normal documentation specified for an individual or company whichever is appropriate
Type of trust    
Country in which it was established    
All information on individual or the corporate trustee as applicable    

 

If the trustee is a company, then you also need to collect the relevant details of the trustee company:

 

Check

Verify

Document to be used

Full name of company Full name of company The records held by ASIC which Representatives can access through the free search on ASIC’s website.
Registered office address Type of company  
Principal place of business address ACN  
ACN    
Public or proprietary company    
If proprietary, the name of each director    


You must, of course, keep records of any such details on file at all times, such as a copy of the driver’s licence, trust deed, etc.

If any of the documentation appears suspicious, you must report this immediately to Partners SMSF Advice.

2. Reporting Suspicious Matters

Your obligation is to report anything suspicious to Partners SMSF Advice. Partners SMSF Advice will then review the matter and report to AUSTRAC if required.

So what may be a suspicious matter that you come across, especially considering that you are dealing with SMSF? Here are some examples:

The client is asking you to arrange for cash to be deposited into super rather than going via a bank account. Please note that any cash deposits over $10,000 must be reported regardless of suspicions but even if lower amounts are suggested, this could be considered suspicious.

The client requests you arrange a transfer to an odd or overseas bank account that does not make sense given the client’s history. Or the client requests transfers to multiple accounts in a short timeframe.
Please note that if something doesn’t seem right, it is always worth checking. There have been more incidents in recent times where third parties have fraudulently accessed accounts for the purpose of fraud and money laundering. For example, if a client is requesting a change in bank account via email into which the pension is to be paid, it is worth phoning the client to check that this request has come from them.

Either way, if you have any concerns, it is essential that you raise them IMMEDIATELY with Partners SMSF Advice who will investigate and if required, will report to AUSTRAC.

3. No tipping off!

Part of your obligation is to not tip off the client if you have reported a suspicious matter. If you have any concerns about how to manage this, please contact Partners SMSF Advice for assistance.
It should be noted that it is better to report any matter that you may consider suspicious. A report to AUSTRAC may not lead to any particular action, and it may be a non-event. Other than criminals, no one wants to assist crime or contribute to terrorism, and you do not want to be the person that inadvertently facilitates money laundering or terrorism financing by not reporting a suspicious matter.

There is detailed information in the Authorised Representative Manual on the requirements.

If you have any questions about this article, please contact Partners SMSF Advice.