Digital currency exchange (DCE) and Remittance providers are required by Anti-Money Laundering and Counter-Terrorism Financing Act 2006(AML/CTF) to register with AUSTRAC before the business can work in Australia.
A remitter or money transfer agent is any individual or business entity that is involved in transferring, sending, or receiving money on behalf of others. There are three classes of remittance providers: independent dealers, remittance network providers, and an affiliate of remittance network providers. A digital currency provider is anyone that provides digital exchange services in relation to digital currencies such as bitcoin and ethereum.
Any business that exchanges foreign or Australian currency to digital currency or digital currency for money; or provides a remittance service that also satisfies the geographical link test would be captured by AML/CTF Act. The geographical link tests follow three criteria:
- The services are offered to Australian clients or through a permanent establishment of business in Australia;
- the business is resident in Australia but the remittance is provided or done through a foreign country;
- or the business is a subsidiary of a business in Australia but running its operation in a foreign country.
When an entity meets the three geographical link criteria, then they are required to determine the type of registration required.
If a business meets the above criteria then it is supposed to ensure the business should determine the type of AUSTRAC registration required. Parties applying for registration should have an AML/CTF Program and the ML/TF Risk Assessment completed before the application. Remittance providers can either register as remittance dealers, remittance or remittance network providers. In addition to meeting the above-set criteria, remitter and digital currency provider must also:
- Adopt and maintain an AML/CTF program that follows the act so they can identify, mitigate and manage Money Laundering and Terrorism Financing.
- Be involved in KYC procedures that can identify and very customer identities.
- Report to AUSTRAC suspicious issue and transaction of physical currency equal or above 10,000.
- Maintain records relating customer identification, transactions and the AML/CTF for at least 7 years.
Enrolment can be completed by registering and filling a form on the website. The application lasts for three year and should be renewed by the applicant at its expiry. AUSTRAC can cancel, suspend or refuse registration to any entity. Failure to work with an AUSTRAC registration can lead to civil penalty orders, enforcement undertakings, remedial direction and infringement notices.
Once an individual or company gets the registration they have an obligation to meet the ongoing compliance obligation set by AUSTRAC. The compliance includes notifying AUSTRAC of changes or updates on your enrollment or registration, conducting regular compliance reviews, reporting and various transactions to AUSTRAC and complying with AML/CTF regulations.
ACP Advisory helps firms meet the compliance requirements by offering necessary advice and support on a day to day basis to ensure businesses can enroll, register and maintain the AUSTRAC registration helps audit so firms and can complete AML/CTF Program and the ML/TF Risk Assessment as well as liaise with AUSTRAC on the compliance. They can help communicate with bank management in regard to AML regulation to safeguard your business from losing the AUSTRAC registration.
