Compliance Report 2023

The first day of the new year brings the obligation to submit the Compliance Report for the calendar year 2023 to AUSTRAC, due by 31 March 2024. Most reporting entities are required to submit this report. Exemptions include:

-          Reporting entities that provide only item 54 services[1],

-          Pubs and clubs, licensed to operate 15 or fewer electronic gaming machines, and

-          A remittance services provider that provides services only as an affiliate on behalf of a remittance network provider.

The Compliance Report contains a range of questions covering almost all aspects of a reporting entity's AML/CTF compliance framework, including its policies, operational framework, and independent review. Responding to these questions will test the robustness of its AML/CTF compliance framework.

For example, to respond positively to questions regarding the consideration of AUSTRAC feedback and guidance means among other things that you have considered all such matters timely, disseminated appropriate information to stakeholders, taken appropriate governance actions, and implemented necessary updates to the AML/CTF framework.

As another example, to have positive responses to questions regarding risk assessment, you must have a robust risk assessment framework, undertaken its ongoing update, and kept it current. Any change in or introduction of new products, services, delivery methods etc. should have triggered a related risk assessment.

While compiling the report, it is useful to compare the questions in the current and previous reports. As is usually the case, the latest report template introduces some new questions, and tweaks a few existing ones, as compared to the previous one.

For instance, there are new questions for Digital Currency Exchange (DCE) businesses including a question on which type of blockchain tools did the DCE used, and what they were used for. The responses will highlight the compliance maturity of a DCE business, provide an industry-level perspective to AUSTRAC, and likely dovetail with its 2024 priority of increased regulatory focus on DCEs.

Another new question concerns the merger or acquisition of another entity, or a reporting entity.  This question may be particularly relevant for the Super industry and Community owned banks which are undergoing a consolidation wave.

While finalising the responses, it is helpful to review and compare them with your previous year’s responses and use that as a baseline. In certain cases, a different response compared to the previous year may require closer review.

If you are a Designated Business Group (DBG), the obligation of lodging the compliance report may be discharged by another member of the DBG, and a combined report can be submitted.

Lastly, remember that the Compliance Report must be completed and lodged through the Reporting Entity’s AUSTRAC online account by 31 March 2024. Ensure that all the working papers and approvals are saved as part of your records. Happy reporting!

Regulatory Reference:

AUSTRAC Compliance Reports – read here.

[1] This refers to provider of only item 54 designated services of table 1, Section 6(2) of the AML/CTF Act.

2 January 2024

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Compliense Advisors is an AML and FinCrime compliance and risk management advisory services provider. We can assist in finalising / reviewing the compliance report, or advise on any matter relating to the report.

Our experience includes preparing compliance report; AUSTRAC registration/ enrollment; setting up, implementing, uplifting AML program; risk assessment; preparing and documenting procedures and framework; and a range of other AML and FinCrime compliance and risk matters.

This article provides an awareness overview on the above subject, and is for general informational purposes only. It is not to be relied on as full provisions of the law or regulatory requirements. You should carefully evaluate your circumstances, and seek professional advice for your specific needs. You are responsible for your compliance obligations, and for any action taken or omitted. We are not a law firm and do not provide legal advice.