On October 24, 2023, AUSTRAC reminded reporting entities to enrol with the regulator by November 9 to avoid potential financial penalties. Failure to enrol after this date may result in fines of up to 60 penalty units daily, valued at $313 per unit.

Should a business remain unenroled for a year, AUSTRAC stipulates potential fines of up to $1,370,940 or $6,854,700 for corporate groups.

Which Entities Need to Register?

AUSTRAC mandates entities within the financial, gambling, and bullion industries to enrol as designated services. Should a business provide multiple designated services with ties to Australia, AUSTRAC identifies it as a reporting entity, subjecting it to anti-money laundering and counter-terrorism financing (AML/CTF) obligations. While Section 6 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) holds a comprehensive list of designated services, a few examples include:

• Account and deposit-taking services.
• Remittance services (money transfers).
• Digital currency exchanges.
• Foreign currency exchanges.
• Investments or securities.
• Buying and selling bullion.
• Gaming machines (such as poker machines).
• Betting accounts and services.
  

Amendments to the AML/CTF Act 2006

The new way penalty units are accrued is a result of recent changes to Section 51B of the AML/CTF Act. These changes were set in motion after the Crimes and Other Legislation Amendment (Omnibus) Bill 2023 was passed by both houses of Parliament in September 2023.

Effective November 9, the amendments strengthen and clarify the civil penalty provisions for entities required to enrol with AUSTRAC within 28 days of commencing to provide a designated service. The amendments specifically state that rather than imposing a single penalty, a separate non-compliance penalty will be issued each day an entity fails to apply for enrolment.

The amendments also clarify that if an entity provides a designated service without applying to enrol within 28 days, they will be obligated to register even after the 28 days have ended until the person either enrols or ceases to be a reporting entity. This will help AUSTRAC enforce compliance by issuing an infringement notice for each non-compliance in the preceding 12 months where a person or entity fails to enrol after the enrolment deadline while continuing to provide a designated service.

In addition to non-enrollment penalties, other amendments to the AML/CTF Act include:

• Authorisation for the AUSTRAC CEO to use a computer program, including automated programs, to control and automatically execute actions, make decisions, or exercise powers under the AML/CTF Act or the Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (No. 1) (AML/CTF Rules)
• Clarification around the existing secrecy and access framework to ensure sensitive AUSTRAC information cannot be inappropriately disclosed in court or tribunal proceedings.

Important links

At this moment, designated services in Australia should take the opportunity to verify and update their AUSTRAC online account, ensuring it accurately represents the array of services they provide. Here are some useful links that might assist:

• Manage an AUSTRAC online account
• Update details
• Update annual earnings
• Renew registration
• Adding a new business to an account