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    Andrew Ham

    When do I have to comply with the new customer due diligence requirements to identify the beneficial owners of my customers, etc.?

    Substantial changes to the law came into effect on 1 June 2014.   The actual legal provisions are available here.  In theory, any entity that provides a designated service (a “reporting entity”) must comply with the new requirements from that date.  However, as the impact on the compliance framework of some reporting entities is significant, AUSTRAC gave industry time to implement these changes by implementing a non-enforcement period.  From 1 June 2014 to 31 December 2015, it will only take enforcement action for contravention of the new provisions if the reporting entity has not taken reasonable steps to comply.  In this context, “reasonable steps” means that the reporting entity has established a transition plan before 1 November 2014, approved by the Board, CEO or equivalent governing body which includes actions and timeframes to:


    • achieve compliance with the new provisions as soon as possible in respect of customers assessed as high ML/TF risk on or after 1 June 2014; and
    • achieve full compliance with the new provisions prior to 1 January 2016.


    The transition  plan must be sufficiently resourced to ensure the timeframes it sets out are met, and must include monitoring and reporting arrangements to the party that approved the transition plan (i.e. the board).


    Thus, while AUSTRAC has allowed until 31 December 2015 for industry to implement the changes, it expects designated service providers to be working steadily towards full compliance since the changes became law on 1 June 2014.  We expect that, by now, you should be well advanced in implementing the necessary compliance measures for the new requirements.


    We have a team of experienced AML/CTF lawyers that would be glad to discuss your questions about how to comply with the AML/CTF client due diligence requirements.


    Author: Andrew Ham


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