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FINANCIAL TRANSACTION REPORTS REGULATIONS (AMENDMENT) 1992 NO. 423
EXPLANATORY STATEMENTStatutory Rules 1992 No. 423
Financial Transaction Reports Act 1988
Financial Transaction Reports Regulations (Amendment)
Subsection 4(1) of the Acts Interpretation Act 1901 (the Act) provides that where an amending Act amends a principal Act in such a way that the principal Act will confer power to make regulations then the power may be exercised before the amendments come into operation as if they had come into operation.
The Crimes Legislation Amendment Act 1992 (the amending Act) amends the Cash Transaction Reports Act 1988 (the principal Act) in order to streamline the process of identity verification under the principal Act. The amendments will be proclaimed to commence on 1 February 1993. The amendments made to, and the new provisions inserted in, the principal Act by the amending Act confer the power to make regulations required for the purposes of the principal Act. Section 43 of the principal Act confers power to make regulations necessary for giving effect to the Act.
It should be noted that, as from 6 December 1992, the Cash Transaction Reports Act 1988 is renamed the Financial Transaction Reports Act 1988. Also, the Cash Transaction Reports Agency (CTRA) is renamed AUSTRAC (Australian Transaction Reports and Analysis Centre). These changes are a consequence of amendments made by the Cash Transaction Reports Amendment Act 1991 which commence on 6 December 1992.
Similarly, the Cash Transaction Reports Regulations have been renamed the Financial Transaction Reports Regulations by regulations (Statutory Rules No. 32011992) which also commence on 6 December 1992.
The Financial Transaction Reports Regulations (Amendment) provide the supporting detail for the streamlined identification procedures inserted by the amending Act. The regulations:
• extend the procedure available under Regulation 5 (Verification: public authorities and incorporated bodies) to foreign companies carrying on business in Australia within the meaning of the Corporations Law;
• insert a new verification procedure for applicants for AUSTUDY/ABSTUDY Supplement under Part 4A of the Student Assistance Act 1973;
• prescribe the classes of person who may sign a change of name statement in connection with a verification of identity under new section 21A of the principal Act; and
• make a number of minor amendments to the regulations consequential upon amendments to the principal Act by the amending Act.
The verification procedure for applicants for the AUSTUDY/ABSTUDY Supplement (regulation 10B) commences on 1 January 1993. This will enable the new procedure to be available for applicants for the Supplement at the commencement of the 1993 academic year. The remainder of the regulations commence on 1 February 1993.
Details of the Regulations are attached.
Attorney-General
ATTACHMENT
Financial Transaction Reports Act 1988
Financial Transaction Reports Regulations (Amendment)
Details of the Regulations are:
Clause 1: Clause 1.1 provides that regulations 1, 2 and 11 commence on 1 January 1993. This enables the new procedure for the verification of identity contained in regulation 10B (Verification: recipients of AUSTUDY/ABSTUDY Supplement) to commence in time for tertiary students receiving the repayable financial supplement under Part 4A of the Student Assistance Act 1973 in the 1993 academic year. Part 4A of that Act is inserted by the Student Assistance Amendment Act 1992.
Clause 1.2 provides that the balance of the regulations commence on 1 February 1993. This coincides with the commencement of related amendments to the Financial Transaction Reports Act 1988, which are made by the Crimes Legislation Amendment Bill 1992, which will commence on 1 February 1993.
Clause 2: Clause 2 is a formal provision.
Clause 3: Clause 3 makes four separate amendments to the definitional provision of the Financial Transaction Reports Regulations (the principal regulations).
Clause 3.1 amends the definition of 'Aboriginal Person'. At present the expression 'Aboriginal Person' is defined in such a manner that the expression includes Torres Strait Islanders. The amendment ensures that references to Aboriginal Persons and to Torres Strait Islanders are separate expressions.
Clause 3.2 makes a minor change to paragraph (c) of the definition of 'incorporated body'. The amendment inserts the word 'Corporations' before the word 'Law'. This ensures there is no ambiguity about the references in that paragraph to the Corporations Law.
Clause 3.3 amends the definition of 'incorporated body', which identifies those artificial persons which may make use of the streamlined identification process set out in regulation 5 (Verification: public authorities and incorporated bodies) of the principal regulations. Clause 3.3 adds a new paragraph (j) to the definition. This paragraph ensures that foreign companies carrying on business in Australia are within the definition of 'incorporated body'.
At the moment the definition of 'incorporated body' does not pick up bodies that are incorporated outside a Corporations Law jurisdiction but which are registered as a foreign company within a Corporations Law jurisdiction. A number of large multinational corporations fall within this category.
Foreign companies may be registered in Australia under Part 4.1 of the Corporations Law, particularly sections 343-344 of the Law. 'Foreign company' is defined by section 9 of the Corporations Law to mean:
"(a) a body corporate incorporated in an external Territory or outside Australia and the external Territories, not being:
(i) a corporation sole; or
(ii) an exempt public authority; or
"(b) an unincorporated body that:
(i) is formed in an external Territory or outside Australia and the external Territories; and
(ii) under the law of its place of formation, may sue or be sued, or may hold property in the name of its secretary or of an officer of the body duly appointed for that purpose; and
(iii) does not have its head office or principal place of business in Australia;"
Section 21 of the Corporations Law interprets the expression 'carrying on business in Australia'.
Clause 3.4 amends the definition of 'verified signatory' as a consequence of an amendment of the Financial Transaction Reports Act by the Crimes Legislation Amendment Act. The amendment of the definition of 'verified signatory' in the principal regulations adds a further paragraph which refers to a signatory who has been identified by means of a verification procedure which has been approved by the Director of AUSTRAC under new subparagraph 20A(1)(b)(ii) of the Financial Transaction Reports Act (inserted by section 11 of the Crimes Legislation Amendment Act).
At present there are two methods by which the identity of a signatory may be verified. Section 21 of the Act contains the 'acceptable referee' method which enables the signatory to produce to a person who is in a class of persons Gazetted as an acceptable referee certain documentary evidence of identity. The acceptable referee then provides a written statement certifying that the referee has sighted this documentary identification.
An alternative method, known as the 100 point method, is prescribed in the principal regulations pursuant to subsection 20(8) of the Act. This system prescribes a large number of checks of identity, some documentary and some non-documentary, each of which is accorded a points weighting depending upon the reliability of the check.
The inserting of new section 20A creates a third method of identification. Cash dealers will be able to develop their own identification procedures thus providing greater flexibility. The amendment of the definition of 'verified signatory' reflects this third method of identification.
Clause 4: Clause 4 makes a minor change to regulation 3 (The verification procedure) of the principal regulations. The change is consequential upon a renumbering of provisions of the Financial Transaction Reports Act by the Crimes Legislation Amendment Act.
Clause 5: Clause 5 amends subsubparagraph 4(1)(f)(ii)(B) of the principal regulations by adding the words 'or permit' after the word 'licence'. The amendment ensures that a learner's permit, as well as a driver's licence, may be used for the purpose of this identity check.
Clause 6: Clause 6 makes an amendment to subregulation 5(3) of the principal regulations by adding a reference to a signatory who has been identified by means of a verification procedure which has been approved by the Director (of AUSTRAC) under new subparagraph 20A(1)(b)(ii) of the Financial Transaction Reports Act (inserted by section 11 of the Crimes Legislation Amendment Act).
Clause 7: Clause 7 makes two amendments to regulation 7 (Verification: recent arrivals in Australia) of the principal regulations:
(i) omitting the definition of 'passport' from subregulation 7(1); and
(ii) replacing the word 'passport' with 'international travel document' in paragraphs 7(2)(b) and (c).
The Crimes Legislation Amendment Act inserts in the Financial Transaction Reports Act a definition of 'international travel document'. This definition makes it unnecessary to retain the definition of 'passport' in regulation 7 of the principal regulations.
Clause 8: Clause 8 amends subregulation 8(3) of the principal regulations by including a reference to the third method of identification of a signatory pursuant to new subparagraph 20A(1)(b)(ii) of the Financial Transaction Reports Act.
Clause 9: Clause 9 amends the definition of 'community leader' in regulation 9 (Verification: Aboriginal persons or Torres Strait Islanders resident in an isolated area) of the principal regulations. The amendment adds four new paragraphs ((c)-(g)) to that definition. The extension of the definition ensures that the verification procedure available under regulation 9 is available to Aboriginal persons and Torres Strait Islanders living in remote communities.
Clause 10: Clause 10 amends subregulation 10A(1) by replacing the reference to subsection 20(8) of the Act with a reference to subparagraph 20A(1)(b)(i) of the Act. This amendment is consequential upon section 11 of the Crimes Legislation Amendment Act which repeals section 20 of the Financial Transaction Reports Act and inserts a new section 20A.
Clause 11: Clause 11 inserts a new regulation 10B which provides that the prescribed verification procedure for an applicant for AUSTUDY/ABSTUDY Supplement consists of the production to the identifying cash dealer of a student card issued by the Department of Employment, Education and Training. Identification by this procedure is worth 100 points.
The Student Assistance Amendment Act 1992 amends the Student Assistance Act 1973. The amendments establish a voluntary loan scheme, under which a financial institution will be licensed by the Minister responsible for education matters to provide loans to students. The loan account with the licensed institution will be an account within the meaning of the Financial Transaction Reports Act and will therefore be subject to the account opening provisions of the Act.
The new identification procedure contained in regulation 10B may be used by students applying for the Supplement. The new procedure will facilitate verification of a student's identity by mail, and will rely upon the student's identity being verified by the Department administering the Supplement (the Department of Employment, Education and Training). The Department will generate a student card which will certify that this has been done.
The student card will be:
(i) a letter, document, statement or card issued by the Department;
(ii) issued to a student who has been granted AUSTUDY/ABSTUDY Supplement under the Student Assistance Act 1973
(iii) a certificate that the student has been assessed as eligible for the Supplement and his/her identity has been verified from departmental records; and
(iv) either signed by the student in the presence of an officer of the Department, or bearing a passport size photograph of the student which has been scaled or stamped by the department.
The card should be valid for 3 months (ie it must be produced to the identifying cash dealer not more than 3 months after the date of issue of the card).
The new procedure applies only to the loan account opened with a cash dealer licensed for the purposes of Part 4A of the Student Assistance Act 1973.
Clause 12: Clause 12 omits and remakes regulation 11A so that it prescribes details pursuant to subparagraph (c)(iv) of the definition of 'account information' in subsection 3(1) of the Financial Transaction Reports Act instead of pursuant to subsection 20(6) of the Act.
Section 11 of the Crimes Legislation Amendment Act repeals section 20 of the Financial Transaction Reports Act. The requirements in relation to trust accounts, presently set out in subsection 20(6) of the Act, are relocated to the definition of 'account information'.
Clause 13: Clause 13 makes three amendments to regulation 11B (Matters prescribed for the purposes of section 18 of the Act) of the principal regulations:
(i) amending subregulation 11B(1) by replacing the period of 21 days with a period of 28 days;
(ii) omitting redundant words from subregulation 11B(1); and
(iii) omitting subregulation 11B(2).
Paragraph 9(c) of the Crimes Legislation Amendment Act repeals subsection 18(5A) of the Financial Transaction Reports Act. Accordingly, subregulation 11B(2) should be omitted. Clause 13.1 allows more time (28 days, rather than 21) for lodgment of the written notice required by new subsection 18(5) of the Financial Transaction Reports Act.
Clause 14: Clause 14 inserts a new regulation 11C (Prescribed persons for the purposes of subsection 21A(2) of the Act). Regulation 11C prescribes members of one of the following classes for the purposes of subsection 21A(2):
• a police officer;
• Regional Managers of the Department of Social Security;
• a legal practitioner (however described) of a federal, State or Territory court;
• a marriage counsellor;
• a doctor;
• a nurse;
• a community leader (as defined by subregulation 9(1));
• a marriage celebrant; or
• a women's refuge worker.
The reference to 'police officer' will pick up a member of the AFP or of the police force of a State or Territory as a result of the definition of the expression in section 3 of the Act. A marriage counsellor will have the same meaning as in the Family Law Act 1975 and, therefore, will include those persons and organisations approved under that Act. The term 'nurse sister' will extend to persons registered as a nurse under a law of a State or Territory providing for that registration.
Clause 15: Clause 15.1 amends paragraph 14(a) of the principal regulations by omitting the word 'passport' (which occurs three times) and replacing it with 'international travel document'.
Section 4 of the Crimes Legislation Amendment Act amends section 3 of the Financial Transaction Reports Act by replacing the word 'passport' with the defined term 'international travel document'. The change to regulation 14 is consequential upon that amendment.
Clause 16: Schedule 4 of the principal regulations prescribes the reportable details for the purposes of a suspect transaction report under section 16 of the Financial Transaction Reports Act. Clause 16 amends item 10 of schedule 4 by adding the name of the account as a reportable detail.