Explanatory Note for Consultation

Transcription

1 Explanatory Note for Consultation Part 4.4 of the AML/CTF Rules sets out the identification requirements for customers acting in their capacity as trustee of a trust in the form of the applicable customer identification procedure (ACIP). Where the customer is acting in its capacity as a trustee, a reporting entity may use the Simplified Trustee Verification Procedure (STVP) in regard to specified types of trusts. Self-Managed Super Funds (SMSFs) that have elected to be regulated by the Australian Taxation Office are currently eligible to be viewed by reporting entities as subject to the regulatory oversight of a Commonwealth statutory regulator in relation to its activities as a trust under the STVP. As a result of identified criminal abuse of SMSFs, including the falsifying of member details and the creation of falsified funds, AUSTRAC considers that it is no longer appropriate that such funds should be identified by use of the STVP. Such funds will now be subject to the full ACIP requirements relevant to trusts. For further information on the risks posed by criminal activity to SMSFs see: AUSTRAC Information Circular No Criminal activity involving identity theft, false bank accounts and false self-managed superannuation funds available at: The amendments to Chapter 4 are at 4.4.8(3), subparagraph (3) of the STVP, and are highlighted in bold.

2 Draft AML/CTF Rules amending Chapter 4 in relation to Self-Managed Superannuation Funds Part 4.4 Applicable customer identification procedure with respect to trustees In so far as a reporting entity has any customer who acts in the capacity of a trustee of a trust, Part B must comply with the requirements specified in Part 4.4 of these Rules Part B must include appropriate risk-based systems and controls that are designed to enable the reporting entity to be reasonably satisfied, where a person notifies the reporting entity that the person is a customer of the reporting entity in the person s capacity as the trustee of a trust, that: (1) the trust exists; and (2) the name of each trustee and beneficiary, or a description of each class of beneficiary, of the trust has been provided. Existence of the trust - collection and verification of information Part B must include a procedure for the reporting entity to collect, at a minimum, the following KYC information from a customer: (1) the full name of the trust; (2) the full business name (if any) of the trustee in respect of the trust; (3) the type of the trust; (4) the country in which the trust was established; (5) if any of the trustees is an individual, then in respect of one of those individuals the information required to be collected from an individual under the applicable customer identification procedure with respect to individuals set out in Part B; (6) if any of the trustees is a company, then in respect of one of those companies the information required to be collected from a company under the applicable customer identification procedure with respect to companies set out in Part B; and

3 (7) if the trustees comprise individuals and companies then in respect of either an individual or a company the information required to be collected from the individual or company (as the case may be) under the applicable customer identification with respect to the individual or company set out in Part B Part B must include appropriate risk-based systems and controls for the reporting entity to determine whether, in addition to the KYC information referred to in paragraph 4.4.3, any other KYC information relating to the trust s existence will be collected in respect of a trust Part B must include a procedure for the reporting entity to verify, at a minimum: (1) the full name of the trust from a trust deed, certified copy or certified extract of the trust deed, reliable and independent documents relating to the trust or reliable and independent electronic data; (2) if any of the trustees is an individual, then in respect of one of those individuals information about the individual in accordance with the applicable customer identification procedure with respect to individuals set out in Part B; (3) if any of the trustees is a company, then in respect of one of those companies information about the company in accordance with the applicable customer identification procedure with respect to companies set out in Part B; and (4) if the trustees comprise individuals and companies then in respect of either an individual or a company the information about the individual or company (as the case may be) in accordance with the applicable procedures with respect to the individual or company set out in Part B Part B must include appropriate risk-based systems and controls for the reporting entity to determine whether and to what extent, in addition to the KYC information referred to in paragraph 4.4.5, any other KYC information relating to the trust s existence collected in respect of the trust should be verified In determining whether, and what, additional information will be collected and/or verified in respect of a trust pursuant to paragraphs and/or 4.4.6, the reporting entity must have regard to ML/TF risk relevant to the provision of the designated service If Part B includes the simplified trustee verification procedure described below with respect to a trust that is: (1) a managed investment scheme registered by ASIC; (2) a managed investment scheme that is not registered by ASIC and that: (a) only has wholesale clients; and

4 (b) does not make small scale offerings to which section 1012E of the Corporations Act 2001 applies; (3) registered and subject to the regulatory oversight of a Commonwealth statutory regulator in relation to its activities as a trust but not including a self-managed superannuation fund; or (4) a government superannuation fund established by legislation; Part B is taken to comply with the requirements of paragraphs 4.4.5, and of these Rules in so far as those customers are concerned. Simplified Trustee Verification Procedure The reporting entity must verify that the trust is: (1) a managed investment scheme registered by ASIC; (2) a managed investment scheme that is not registered by ASIC and that: (a) (b) only has wholesale clients; and does not make small scale offerings to which section 1012E of the Corporations Act 2001 applies; (3) registered and subject to the regulatory oversight of a Commonwealth statutory regulator in relation to its activities as a trust but not including a self-managed superannuation fund; or (4) a government superannuation fund established by legislation. Trustees and beneficiaries collection and verification of information Part B must include a procedure for the reporting entity to collect, at a minimum, the following KYC information from a customer (other than a trustee in respect of a trust to which paragraph or applies): (1) the full name and address of each trustee in respect of the trust; and (2) either: (a) (b) the full name of each beneficiary in respect of the trust; or if the terms of the trust identify the beneficiaries by reference to membership of a class details of the class Part B must include appropriate risk-based systems and controls for the reporting entity to determine whether, in addition to the KYC information

5 referred to in paragraph 4.4.9, any other KYC information relating to the trustees or beneficiaries will be collected in respect of the trust Part B must include appropriate risk-based systems and controls for the reporting entity to determine whether and, if so, in what manner to verify the name of any or each trustee or beneficiary, or details of any or each class of beneficiaries, or any other KYC information collected pursuant to a procedure of the kind described in paragraph 4.4.9, from the sources described in paragraph Part B must include a requirement that, in determining whether and what KYC information will be collected and/or verified in respect of a trust and the extent to which any KYC information is verified, pursuant to a procedure of the kind described in paragraphs and/or , the reporting entity must have regard to ML/TF risk relevant to the provision of the designated service Part B need not include the requirements specified in paragraphs to in relation to a trust that is: (1) a managed investment scheme registered by ASIC; (2) a managed investment scheme that is not registered by ASIC and that: (a) only has wholesale clients; and (b) does not make small scale offerings to which section 1012E of the Corporations Act 2001 applies; or (3) a government superannuation fund established by legislation Part B need not include the requirements specified in paragraph in relation to a trust that is registered and subject to the regulatory oversight of a Commonwealth statutory regulator in relation to its activities as a trust but not including a self-managed superannuation fund. Methods of verification Subject to paragraph , Part B must require that the verification of information about a trust be based on: (1) a trust deed, certified copy or certified extract of a trust deed; (2) reliable and independent documents relating to the trust; (3) reliable and independent electronic data; or (4) a combination of (1) to (3) above For the purposes of subparagraph (2), reliable and independent documents relating to the trust includes a disclosure certificate that verifies information about a trust where:

6 (1) the verification is for the purposes of a procedure of the kind described in paragraphs or of these Rules; and (2) the information to be verified is not otherwise reasonably available from the sources described in paragraph Responding to discrepancies Part B must include appropriate risk-based systems and controls for the reporting entity to respond to any discrepancy that arises in the course of verifying information about a customer so that the reporting entity can determine whether it is reasonably satisfied about the matters referred to in subparagraphs 4.4.2(1) and (2).