Last week, the Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2017 was passed into law. The new law, for the first time, regulates Australia’s growing digital currency sector. Similar measures are already in place in the US, Canada and the EU.
It amended the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 to:
- expand the objects of the Act to reflect the domestic objectives of anti-money laundering and counter-terrorism financing regulation; expand the scope of the Act to include regulation of digital currency exchange providers;
- clarify due diligence obligations relating to correspondent banking relationships and broadening the scope of these relationships; qualify the term ‘in the course of carrying on a business’;
- allow related bodies corporate to share information;
- expand the range of regulatory offences for which the AUSTRAC Chief Executive Officer (CEO) is able to issue infringement notices;
- allow the CEO to issue a remedial direction to a reporting entity to retrospectively comply with an obligation that has been breached;
- give police and customs officers broader powers to search and seize physical currency and bearer negotiable instruments and establish civil penalties for failing to comply with questioning and search powers;
- revise certain definitions; and clarify certain powers and obligations of the CEO; and Anti-Money Laundering and Counter-Terrorism Financing Act 2006 and Financial Transaction Reports Act 1988 to de-regulate the cash-in-transit sector, insurance intermediaries and general insurance providers.
One important change was that operators of Australian exchanges for Bitcoin and other digital currencies will now need to register with the country’s anti-money laundering agency.
It also sets out the conditions under which they may trade.They must identify and verify their customers, keep records of transactions, report threshold transactions and suspicious matters, and run an anti-money laundering and counter-terror financing program.
It is now a criminal offence to provide digital currency exchange services without being registered with AUSTRAC and penalties for non-compliance start from two years’ jail and/or $105,000 for failing to register. They go as high as seven years jail and $2.1 million in penalties for corporations and $420,000 for individuals for severe offences.
