The principal piece of legislation is the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act). Under the AML/CTF Act, the Australian Transaction Reports and Analysis Centre (AUSTRAC), the regulatory authority charged with oversight of the legislation, has made rules relating to AML/CTF obligations.

This Act received Royal Assent on 12 December 2006. The Australian Government has stated that the AML/CTF Act will bring Australia into line with international standards, including those set by the Financial Action Task Force (FATF).

Capital Finance (CFAL), who is a subsidiary of HBOSA Pty Ltd, is progressively implementing the requirements of this Act within the specified timeframes. The legislation has a staggered implementation timeframe with full implementation required by 12 December 2008.

Principles
The principles governing HBOSA’s approach to Money Laundering and Terrorism Financing are:

Principle 1 – Risk Based Approach
We will adopt a risk based approach in our procedures to prevent and detect money laundering. This risk based approach will recognise the varying threats of money laundering across our customers, products, and delivery channels.

Principle 2 - Customer Due Diligence (CDD)
We are committed to ‘knowing our customers’ appropriately. This commitment applies not only at acceptance but also extends throughout the business relationship. Appropriate steps will be made to verify the customer’s identity and business as well as the reasons why the customer is seeking the particular business relationship with Capital Finance.

Principle 3 – Politically Exposed Persons (PEPS)
We recognise that there are specific risks posed by PEPs, particularly to those business areas which conduct business in countries prone to corruption or with clients involved in sectors susceptible to corruption. Therefore, we will take appropriate, proportionate steps to identify those known, suspected or advised to be PEPs (and those related to or associated with a PEP), and will implement specific procedures for the control of such business.

Principle 4 – Entities and Persons Subject to Sanctions
We take our responsibility to deny financial services to those subject to sanctions extremely seriously. As such we will take necessary steps to deny financial services to entities and persons where sanctions apply and will report those identified to the appropriate authorities.

Principle 5 – Suspicious Activity Reporting
We fully recognise the important part played by the submission of quality Suspicious Activity Reports to the appropriate authorities. Therefore we will put in place suitable effective processes to enable all colleagues to report suspicious activity internally. Additional procedures will be implemented to ensure quality external reports are made to the relevant authorities.

Principle 6 – Training and Awareness
We will raise awareness on money laundering prevention and, taking a risk based approach, will train and test relevant colleagues’ understanding on what money laundering is, the requirements of legislation and regulation, how to recognise and deal with suspicious activity, and the personal obligations of staff.

Principle 7 – Transaction Monitoring
We will ensure that there are procedures in place to monitor customer transactions and activities in order to highlight unusual transactions that may warrant further investigation. We will ensure that scrutiny of transactions is undertaken throughout the course of the relationship, (including where necessary, source of funds) to ensure that transactions are consistent with the customer’s expected pattern of business.

Principle 8 – Record Keeping (Retention and Retrieval)
We will retain adequate records relating to Anti-Money Laundering for 7 years and store them in a manner which is secure and easily retrievable. For identification and new customer / account opening records, and all appropriate supporting documentation collated throughout the relationship, these must be retained for 7 years after account closure. Transactional records must be retained for 7 years after the transaction has taken place. We will respond fully and in a timely manner, to any lawful request for information made by appropriate authorities (e.g. law enforcement) during their investigation into financial crime.

Principle 9 – Monitoring Compliance with AML Policy and Procedures
We will have risk based monitoring plans in place, including monitoring of the account opening process to ensure that all our operations are complying with this policy and any detailed AML procedures. The audit and compliance programs are approved by senior management.

The Attorney-General’s Department has produced a customer information brochure containing a range of frequently asked questions on the new AML / CTF laws. Please click on this link to download and print a copy of this brochure.