5 June 2024

The Anti-Money Laundering and Counter-Terrorism Financial Act 2006 (the AML/CTF Act) requires certain businesses to adopt and maintain an AML/CTF Program and ensure an independent review of Part A of the AML/CTF Program is conducted regularly.

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Who the AML/CTF Act Applies To

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If you operate a business that provides financial advisory, remittance, gambling, digital currency exchange, motor vehicle dealer, bullion, lending or foreign currency exchange services, you are likely providing a designated service under section 6 of the AML/CTF Act and are required to enrol with the Australian Transaction Reports and Analysis Centre (AUSTRAC). Remittance and digital currency exchange providers are also required to register with AUSTRAC. If your business provides any of the above-mentioned services, it is likely that you are required to adopt and maintain an AML/CTF Program which is required to be independently reviewed regularly.

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What is an AML/CTF Independent Review

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An AML/CTF Independent Review is required, under Part 8.6 of the AML/CTF Act, for entities that are providing a designated service under section 6 of the AML/CTF Act. An Independent Review of your AML/CTF Program serves the purpose of ensuring that your AML/CTF Program:

1. remains effective in the operations of your business and appropriately addresses your ML/TF risks;

2. complies with your obligations under the AML/CTF Act; and

3. is being effectively applied continuously throughout your organisation.

Under the AML/CTF Act, an Independent Review of your AML/CTF Program is only required to be conducted for Part A of your AML/CTF Program, however, at Adria Law, we believe that it is good practice for Part B of the AML/CTF Program to be reviewed alongside Part A for completeness and is included as part of our AML/CTF Independent Review service.

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Who Can Conduct an AML/CTF Independent Review

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An independent reviewer of your AML/CTF Program must be someone who:

1. understands your business or organisation;

2. holds an expertise in understanding ML/TF risks; and

3. was not involved in any part of developing your AML/CTF Program, including assessing your ML/TF risks, developing controls and process or implementing and maintaining the program.

It is essential that independence is maintained when conducting an AML/CTF Independent Review and measures are implemented to ensure the reviewer’s independence.

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At Adria Law, we maintain a solid understanding of the AML/CTF Act and how it applies to Reporting Entities and hold an extensive interview with you to gather a complete understanding of your business and how AML/CTF applies to you.

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How Often Should your AML/CTF Program be Reviewed?

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The AML/CTF Act states that an AML/CTF Independent Review should be conducted ‘regularly’. There is a wide range of circumstances that determine the frequency in conducting independent reviews of your AML/CTF Program which include the nature and size of your business and the complexities and ML/TF risks behind your business. AUSTRAC have provided guidance which states that ‘high risk’ businesses should conduct an independent review every 2-3 years which we have seen to be a common industry practice for most businesses that are subject to the AML/CTF Act. At Adria Law, we also recommend that an Independent Review of your AML/CTF Program is undertaken when there is a significant change to your business’ operations.

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How Can We Help?

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At Adria Law, we are experts in assisting businesses in conducting an AML/CTF Independent Review of their AML/CTF Program and remain stringent in ensuring that your business has effectively implemented and is effectively maintaining its AML/CTF Program in line with the AML/CTF Act. In conducting an Independent Review of your AML/CTF Program, our process includes:

1. Obtaining your AML/CTF Policy and AML/CTF-related documentation.

2. Undertaking a comprehensive interview with you to gather an understanding on your business and how AML/CTF applies to you.

3. Preparing a signed report that outlines your AML/CTF processes and procedures, our review of your AML/CTF Program and processes and any recommendations we may have for you to implement to enhance your AML/CTF Program.

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Contact our AML/CTF experts today for a free consultation on 1800 955 816 or info@adrialaw.com.au. We look forward to hearing from you.