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2010 - 2011
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE
SUPERVISORY COST RECOVERY LEVY BILL 2011
AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE
SUPERVISORY COST RECOVERY LEVY (COLLECTION) BILL 2011
AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE
SUPERVISORY COST RECOVERY LEVY (CONSEQUENTIAL
AMENDMENTS) BILL 2011
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Justice,
the Hon Brendan O'Connor MP)
AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE
SUPERVISORY COST RECOVERY LEVY BILL 2011
AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE
SUPERVISORY COST RECOVERY LEVY (COLLECTION) BILL 2011
AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE
SUPERVISORY COST RECOVERY LEVY (CONSEQUENTIAL
AMENDMENTS) BILL 2011
OUTLINE
In the 2010-11 Budget, the Government announced that the Australian Transaction
Reports and Analysis Centre (AUSTRAC) would recover the costs of its supervisory
activities from 1 July 2011.
AUSTRAC's purpose is to protect the integrity of the financial system and contribute
to the administration of justice through its expertise in countering money laundering
and the financing of terrorism. This purpose is achieved through the exercise of its
two interdependent functions - as a regulator and as Australia's financial intelligence
unit.
As a regulator, AUSTRAC works with its regulated population (reporting entities) to
enhance the level of understanding of anti-money laundering and counter-terrorism
financial (AML/CTF) obligations and supervise compliance with the requirements of
the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF
Act).
Reporting entities provide services that are vulnerable to exploitation for money
laundering and terrorism financing purposes, creating the need for regulation by
AUSTRAC. It is appropriate that industry meet the costs of regulatory systems that
ensure the integrity of their operating environment.
Under the arrangements set out in the 2010-11 Budget, AUSTRAC will recover the
costs of its business as usual supervisory activities as well as additional amounts to
support small business compliance, legal costs for substantial enforcement actions,
and implementation and administration costs for cost recovery.
Cost recovery will be implemented by a legislative package comprising the Australian
Transaction Reports and Analysis Centre Supervisory Cost Recovery Levy Bill 2011,
Australian Transaction Reports and Analysis Centre Supervisory Cost Recovery Levy
(Collection) Bill 2011 and Australian Transaction Reports and Analysis Centre
Supervisory Cost Recovery Levy (Consequential Amendments) Bill 2011.
Financial Impact Statement
These arrangements are expected to collect $118.3 million over the period 2011-15.
AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE
SUPERVISORY COST RECOVERY LEVY BILL 2011
The Australian Transaction Reports and Analysis Centre Supervisory Cost Recovery
Levy Bill 2011 (the `Levy Bill') is part of the legislative package necessary to give
effect to the 2010-11 Budget announcement that AUSTRAC would recover the costs
of its supervisory activities from 1 July 2011.
The Levy Bill creates the liability to levy. Clause 8 which imposes the levy operates
in conjunction with clause 7 of the Australian Transaction Reports and Analysis
Centre Supervisory Cost Recovery Levy (Collection) Bill 2011 which makes the levy
payable by a leviable entity. A leviable entity is a reporting entity as defined by
section 5 of the AML/CTF Act that has provided a designated service within the
previous financial year and is or must have been enrolled on the census day. Leviable
entity is defined by clause 7 of the Levy Bill.
The Minister for Justice will determine by legislative instrument the amount of levy
payable by a leviable entity in any given financial year. Clause 9 provides that the
Minister may specify by legislative instrument the amount payable, and the method or
methods to determine the liability of each leviable entity or class of leviable entities.
The determination of the levy payable each year by legislative instrument ensures that
the levy will continue to reflect the actual cost of regulating reporting entities.
The total liability imposed on leviable entities as a whole cannot exceed the maximum
statutory limit of $33 million in the 2011-12 financial year. Clause 7 which defines
the statutory limit is given effect by clause 9(2). The statutory limit will increase for
subsequent financial years by effect of clause 10. Clause 10 provides that an
indexation factor will be applied to the statutory limit to calculate the statutory limit
for the successive year. The amount to be collected will not exceed the costs
associated with AUSTRAC's regulatory activities. In determining the amount to be
collected, AUSTRAC will be subject to the standard budgetary processes applied to
other Australian government agencies.
AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE
SUPERVISORY COST RECOVERY LEVY (COLLECTION) BILL 2011
The Australian Transaction Reports and Analysis Centre Supervisory Cost Recovery
Levy (Collection) Bill 2011 (the Collection Bill) provides for the collection of the
levy imposed by the Levy Bill and related administrative matters, such as issuing
notice of assessments and late payment penalties.
The levy imposed by clause 8 of the Levy Bill becomes payable by effect of clause 7
of the Collection Bill. Clause 7 provides that the levy is payable by a leviable entity
for a financial year ending after the commencement of the Levy Bill. The first
financial year in which the levy is expected to be payable is the 2011-12 financial
year.
Clause 8 provides for the AUSTRAC CEO to issue a notice of assessment and specify
the business day on which the levy becomes payable, as long as it is at least 30 days
2
after the commencement of the financial year. Leviable entities will have a minimum
period of at least 30 days before payment is due.
Overdue payments will be subject to a late payment penalty as set out by clause 9.
The late payment penalty will accrue on a monthly basis, and is payable at the end of
the month. The late payment penalty will operate as an incentive for leviable entities
to pay their levy by the due date.
Clause 11 provides the AUSTRAC CEO with the power to waive part or whole of the
levy or late payment penalty. The AUSTRAC CEO may exercise this waiver power
on his or her own volition or on written application. A waiver decision by the
AUSTRAC CEO is reviewable on its merits. Clause 14 provides that a leviable entity
must first seek internal review of the decision before proceeding to the Administrative
Appeals Tribunal by effect of clause 15.
AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE
SUPERVISORY COST RECOVERY LEVY (CONSEQUENTIAL
AMENDMENTS) BILL 2011
The Australian Transaction Reports and Analysis Centre Supervisory Cost Recovery
Levy (Consequential Amendments) Bill 2011 amends the AML/CTF Act to make it
mandatory for reporting entities to enrol with AUSTRAC.
Mandatory enrolment is an essential requirement underlying the transparency,
accuracy and accountability of the AUSTRAC cost recovery process. The
Government and reporting entities need to know that the data used by AUSTRAC to
calculate liability to pay the levy accurately reflects the number of reporting entities
and their status as leviable entities. Efficient and effective collection of the levy
requires AUSTRAC to identify and invoice leviable entities.
Clause 51B makes it mandatory for reporting entities to enrol with AUSTRAC within
28 days of providing or commencing to provide a designated service. Designated
services are those services specified in Tables 1, 2 and 3 of section 6 of the AML/CTF
Act. Reporting entities are required to update their enrolment details if those details
change in accordance with clause 51F.
Reporting entities may request the AUSTRAC CEO to remove their details from the
Reporting Entities Roll under clause 51G. The AUSTRAC CEO must remove their
details if he is satisfied that it is appropriate to do so.
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NOTES ON CLAUSES
AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE
SUPERVISORY COST RECOVERY LEVY BILL 2011
Clause 1- Short title
This clause is a formal provision specifying the Short Title of the Bill.
Clause 2 - Commencement
This clause indicates that sections 1 and 2 commence the day of Royal Assent, and
sections 3 to 9 the later of 1 July 2011 and the day of Royal Assent.
Clause 3 - Act Binds the Crown in each of its capacities
This clause provides that the Bill binds the Crown in the right of the Commonwealth,
of each of the States, of the Australian Capital Territory, of the Northern Territory and
of Norfolk Island.
Clause 4 - External Territories
This clause extends the Bill to each of the external Territories.
Clause 5 - Extra-territorial application
Clause 5 provides that the Bill has application to persons or things outside Australia.
Section 21(b) of the Acts Interpretation Act 1901 does not apply. The intention is to
capture the acts of reporting entities that are incorporated in a foreign jurisdiction and
do not have a permanent establishment in Australia. Australia has the same meaning
as section 5 of the AML/CTF Act.
Clause 6 - Act does not impose a levy on property of the State
This clause provides that the Bill will not impose a tax on property of any kind
belonging to a State. The term property of any kind belonging to a State will have the
same meaning that the term has in section 114 of the Constitution.
Clause 7 - Definitions
census day - means the day on which a reporting entity's liability to pay the levy is
determined. The census day for the 2011-12 financial year is the day specified by the
AUSTRAC CEO by legislative instrument. The provision expressly limits the
operation of section 12(2) of the Legislative Instruments Act 2003 to accommodate
the possibility that the Bill may not come into force until after 1 July 2011. The
mandatory enrolment requirement under clause 51B of the Australian Transaction
Reports and Analysis Centre Supervisory Cost Recovery Levy (Consequential
Amendments) Bill 2011 may also not be in force until after 1 July 2011. Mandatory
enrolment is necessary to accurately determine the amount of levy payable by leviable
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entities. Once the Bills come into effect the CEO will be able to determine a day, the
census day, on which all reporting entities will have enrolled and have liability
determined for the 2011-12 year. The census day for subsequent financial years will
be 1 July or a day determined by the AUSTRAC CEO by legislative instrument.
exempt entity -refers to a reporting entity that is exempt from having an Anti-Money
Laundering and Counter-Terrorism Financing (AML/CTF) Program under Part 7 of
the AML/CTF Act on census day. This reflects that while these reporting entities
may provide designated service, they have been excused from complying with most
regulatory requirements of the AML/CTF Act, and so are not subject to any
significant supervision by AUSTRAC. Accordingly it would not be appropriate to
require them to fund AUSTRAC's supervision activities.
indexation factor - the indexation factor means the factor calculated under clause 10
of the Bill. This factor will be applied to the statutory minimum and statutory limit
amounts specified for the 2011-12 financial year to determine those amounts for
successive financial years.
index number - means the All Groups Consumer Price Index (CPI) number published
by the Australian Statistician for the March quarter. The All Groups CPI number is
considered to be the most appropriate index of general price inflation for the purpose
of calculating the indexation factor for determining the statutory minimum and
statutory limits for the levy.
leviable entity - refers to the person liable to pay the levy in a financial year. A
person is only a leviable entity if they satisfy both limbs of the definition. The first
limb requires that a person is a reporting entity at any time in the previous financial
year. A reporting entity is a person that provides a designated service as defined by
section 5 of the AML/CTF Act.
The second limb requires that the person is enrolled or required to be enrolled on
census day. The census day is 1 July of that financial year or a day specified by the
AUSTRAC CEO by legislative instrument. The requirement to enrol is set out in
clause 51B of the Australian Transaction Reports and Analysis Centre Supervisory
Cost Recovery Levy (Consequential Amendments) Bill 2011. Both limbs operate as
anti-avoidance mechanisms as a person will be liable if they provided a designated
service in the past financial year and are required to enrol at the census date.
person - the term person is defined in section 5 of the AML/CTF Act to be an
individual, a company, a trust, a partnership, a corporate sole or a body politic. The
term body politic ensures that governments will be persons for cost recovery
purposes.
statutory limit - refers to the maximum monetary amount in any given financial year
recoverable by AUSTRAC from leviable entities. This amount is set at $33 million
for the 2011-12 financial year and will be adjusted for successive financial years
according to the formula set out in clause 10. It guarantees that the total amount of
levy recoverable by AUSTRAC will not exceed the statutory limit at the time of
determination for each given financial year. The actual amount to be collected will be
equal to the costs of AUSTRAC supervisory activities. This will be determined in
5
accordance with the standard budgetary processes applied to all Australian
government agencies. The levy components for each financial year will be based on
estimates of the reporting entity population profile determined prior to the financial
year in which they will apply. The levy will be imposed on leviable entities based on
the actual reporting entity population profile on the census day in the relevant
financial year. It is possible therefore that due to changes in the leviable entity
population, the amount collected will differ to AUSTRAC's supervisory activities for
that financial year. The statutory limit is set with a sufficient margin to reduce the risk
of breaching the limit. In circumstances where AUSTRAC over or under collects, the
levy in future years will be adjusted.
statutory minimum -refers to the minimum threshold amount for which a person will
be liable to pay the levy. A person will not be liable to pay the levy if the levy
otherwise calculated for the person for the financial year 2011-2012 is less than
$100.00 The statutory minimum limit will be adjusted each financial year according
to the formula for calculating the indexation factor in clause 10 of the Bill.
Clause 7(2) expressly applies the common law principles of liability in respect to
partnerships, unincorporated associations and trusts. Liability to pay the levy rests
with each partner, member of the management committee of an unincorporated
association, and trustee. The liability to pay the levy may be discharged by a partner,
member or trustee on behalf of other partners, members, and trustees.
Clause 8 - Imposition of AUSTRAC cost recovery levy
This clause provides for the imposition of the levy. The levy is payable in accordance
with section 7 of the Australian Transaction Reports and Analysis Centre Supervisory
Cost Recovery (Collection) Bill 2011.
Clause 9 - Amount of levy
This clause provides that the Minister by legislative instrument must determine the
amount payable by a leviable entity in a given financial year. The total amount
payable by all leviable entities cannot exceed the statutory limit. The statutory limit
for the 2011-12 financial year is $33 million.
Clause 9(3) (a)-(c) specifies that the Minister's determination may include the method
or methods for determining the levy payable by a leviable entity or class of leviable
entities, including a nil amount. There is no requirement for the determination to
specify the methodology for calculating the levy. The Minister may consult in
accordance with Part 3 of the Legislative Instruments Act 2003 prior to determining
the levy payable by a leviable entity.
Sub-clause 9(3)(d) provides that in specifying the method for determining the levy
that reference may be made to acts done or circumstances existing before the
commencement of the determination or Act or both. The purpose of this clause is to
enable any transaction reporting component of the levy imposed in a financial year to
be calculated on the basis of reports lodged with AUSTRAC prior to that financial
year. For example the levy for the financial year 2011-12 may be calculated on the
number of transaction reports, among other factors, lodged in the calendar year
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2010-2011. The intention is that reporting entities will know their liabilities in
advance of the next financial year, as well as accommodating the business planning
and budget cycle.
Clause 9(4) limits the operation of section 12(2) of the Legislative Instruments Act
2003 by enabling the Minister to make a determination after the commencement of
the 2011-12 financial year. The purpose of this provision is to ensure that leviable
entities will be liable for the entire financial year irrespective of the date of the
commencement of clause 8 of the Bill and subsequent determination.
Clause 9(5) ensures that a leviable entity will not be required to pay the levy when the
levy amount for the financial year is less than the statutory minimum. The rationale
for this provision is that it is not cost effective to administer such small amounts.
Clause 10 - Calculation of indexation factor
This clause sets out the formula for calculating the indexation factor for determining
the minimum and maximum limits for the levy payable in a financial year. These
limits are calculated using indexation factors related to movements in the All Group
CPI.
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AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE
SUPERVISORY COST RECOVERY LEVY (COLLECTION) BILL 2011
Clause 1 - Short title
Clause 1 is a formal provision specifying the Short Title of the Bill.
Clause 2 - Commencement
This clause indicates that section 1 and 2 commence the day the Act receives Royal
Assent and that sections 3 to 16 commence the same day as section 3 of the Australian
Transaction Reports and Analysis Centre Supervisory Cost Recovery Levy Bill 2011.
Clause 3 - Act Binds the Crown
This clause provides that the Bill binds the Crown in the right of the Commonwealth,
of each of the States, of the Australian Capital Territory, of the Northern Territory and
of Norfolk Island.
Clause 4 - External Territories
This clause extends the Bill to each of the external Territories.
Clause 5 - Extraterritorial application
Clause 5 provides that the Bill has application to persons or things outside Australia.
Section 21(b) of the Acts Interpretation Act 1901 does not apply. The intention is to
capture the acts of reporting entities that are incorporated in a foreign jurisdiction and
do not have a permanent establishment in Australia. Australia has the same meaning
as section 5 of the AML/CTF Act.
Clause 6 - Definitions
AUSTRAC - means the Australian Transaction Reports and Analysis Centre as
defined by section 5 of the AML/CTF Act.
AUSTRAC CEO - is defined as the Chief Executive Officer of AUSTRAC who is
appointed under Part 16, Division 3 of the AML/CTF Act.
business day - refers to days of business in the period Monday to Friday, except when
it falls on a public or bank holiday. It is defined as provisions in the Bill require
certain actions to take place within a certain number of business days from occurrence
of a particular event. The specific reference to bank holiday acknowledges that a
significant proportion of the reporting entity population does not operate on the day.
late payment penalty - refers to the penalty payable under clause 9. A penalty will be
imposed for late payment of the levy and will be calculated according to the formula
set out in clause 9(1).
8
leviable entity - refers to the person liable to pay the levy in a financial year.
Leviable entity has the same meaning as in the Australian Transaction Reports and
Analysis Centre Supervisory Cost Recovery Levy Bill 2011. A person is only a
leviable entity if they satisfy both limbs of the definition. The first limb requires that
a person is a reporting entity at any time in the previous financial year. A reporting
entity is a person that provides a designated service as defined by section 5 of the
AML/CTF Act.
The second limb requires that the person is enrolled or required to be enrolled on
census day. The census day is 1 July of that financial year or a day specified by the
AUSTRAC CEO by legislative instrument. The requirement to enrol is set out in
clause 51B of the Australian Transaction Reports and Analysis Centre Supervisory
Cost Recovery Levy (Consequential Amendments) Bill 2011. Both limbs operate as
anti-avoidance mechanisms as a person will be liable if they provided a designated
service in the past financial year and are required to enrol at the census date.
levy - refers to the amount payable for any given financial year by a leviable entity
under section 9 of the Australian Transaction Reports and Analysis Centre
Supervisory Cost Recovery Levy Bill 2011.
levy month - refers to a calendar month. The levy month will be used for calculating
the late payment penalty under clause 9.
person - the term person is defined in section 5 of the AML/CTF Act to be an
individual, a company, a trust, a partnership, a corporate sole or a body politic. The
term body politic ensures that governments will be persons for cost recovery
purposes.
Clause 6(2) expressly applies the common law principles of liability in respect to
partnerships, unincorporated associations and trusts. Liability to pay the levy rests
with each partner, member of the management committee of an unincorporated
association, and trustee. The liability to pay the levy may be discharged by a partner,
member or trustee on behalf of other partners, members, and trustees.
Clause 7 - Liability to AUSTRAC cost recovery levy
This clause provides that a leviable entity is liable to pay the levy for a financial year
ending after the commencement of the Australian Transaction Reports and Analysis
Centre Supervisory Cost Recovery Levy Bill 2011. It is intended that cost recovery
for AUSTRAC's supervisory activities would commence from the 2011-12 financial
year.
Clause 8 - When levy due for payment
This clause provides that the AUSTRAC CEO may specify by notice the business day
on which payment is required. The AUSTRAC CEO may not require payment of the
levy within 30 days after the beginning of the financial year or the giving of notice.
30 days is considered a reasonable time period for providing notice of a requirement
to pay.
9
Clause 8(2) - this provision enables a leviable entity to nominate another person to
receive the notice specified under clause 8(1), and to discharge their obligation to pay
the levy. The intention is to accommodate designated business group members and
other administrative arrangements where the levy will be discharged on behalf of the
members by the nominated person. In discharging that obligation the nominated
person where acting on behalf of a number of leviable entities must indicate whose
liability is being discharged.
Clause 8(3) - clarifies that this provision is simply an administrative arrangement and
it does not affect the underlying liability of a leviable entity to pay the levy. If the
debt is not paid, any recovery action would be commenced against the person and not
the nominated person.
Clause 9 - Late payment penalty
This clause provides that a penalty will apply when the levy is not paid on time. The
penalty is set out in clause 9(1). The late payment penalty will be calculated per levy
month and payable at the end of the month under Claude 9(2). Clause 9(3) provides
the AUSTRAC CEO with the discretion to change the late payment penalty date prior
to the penalty becoming due. The purpose of the late payment penalty is to encourage
compliance with the obligation to pay the levy and to discourage late payment.
Clause 10 - Payment of levy and late payment penalty
This clause provides that the levy and late payment penalty are payable to the
AUSTRAC CEO on behalf of the Commonwealth. All monies paid to the
AUSTRAC CEO in the form of the levy or late payment penalty are part of the
Consolidated Revenue Fund (CRF) under section 81 of the Constitution.
Clause 11 - Waiver of levy and late payment penalty
This clause confers on the AUSTRAC CEO the discretionary power to waive debts in
relation to the whole or part of the levy or late payment penalty payable by a person.
The circumstances in which the AUSTRAC CEO may consider it appropriate to
waive the debt include where recovery would be inequitable or cause ongoing
hardship. AUSTRAC CEO may only waive the levy, in whole or part, as set out in
the Ministerial determination issued under section 9 of the Australian Transaction
Reports and Analysis Centre Supervisory Cost Recovery Levy Bill 2011. The waiver
power does not extend to administrative error in relation to the issuing of invoices.
In exercising his or her power under clause 11 the AUSTRAC CEO must provide the
person whose interests are affected by the decision notice in writing or otherwise of
the making of the decision and the right of the person to have the decision reviewed
by virtue of section 27A of the Administrative Appeals Tribunal Act 1975.
The AUSTRAC CEO may delegate this function to a member of the AUSTRAC staff
by operation of sections 222 and 212 (1) (f) of the AML/CTF Act.
10
Clause 12 - Recovery of levy and late payment penalty
This clause provides that the levy and late payment penalty are debts due to the
Commonwealth and can be recovered by the AUSTRAC CEO. This empowers the
AUSTRAC CEO to take court proceedings to recover the levy as agent for the
Commonwealth. The CEO may engage consultants to perform services for
AUSTRAC in connection with the performance of any of the AUSTRAC CEO's
functions by operation of subsection 225(1) of the AML/CTF Act. This allows the
AUSTRAC CEO to engage another entity to collect the debt owning to the
Commonwealth.
Clause 13 - Exempting laws ineffective
This clause provides that a person's liability to pay the levy is not affected by any
laws made prior to the commencement of the section, and after its commencement
unless expressly exempted by reference to the levy under this Act. The intention is to
prevent the unintentional exclusion of persons from the levy under other regulatory
schemes such as those administered by Australian Securities and Investment
Commission and Australian Prudential Regulatory Authority.
Clause 14 - Internal review of certain decisions
This clause is intended to provide a person affected by a waiver decision of the
AUSTRAC CEO with an easy and accessible form of review. Under sub-clause 14(3)
the AUSTRAC CEO may review or delegate this function to another person, as long
as the person to whom the decision is delegated was not involved in making the
original decision and is senior to the original decision maker. In the event that the
AUSTRAC CEO was the original decision maker, the AUSTRAC CEO must review
his or her original decision.
Clause 14(2) introduces a statutory time period for seeking review of an original
decision. A statutory time period for seeking review is specified to be 21 days. This is
required to provide finality and enable the efficient recovery of costs in any given
financial year. The AUSTRAC CEO has the discretion to extend the statutory time
frame. The purpose of this discretionary power is to enable the AUSTRAC CEO to
accommodate those circumstances where the statutory time frame may disadvantage a
person, such as the delay of receipt of notice due to natural disaster.
Clause 14(4) imposes a statutory time period of 42 days in which the reviewer must
reconsider, and affirm, revoke or vary the original decision. The purpose behind the
statutory time period is to ensure that reviews are dealt with in a timely manner. After
the expiry of the statutory time period, the AUSTRAC CEO's original decision is
deemed to be affirmed and is subject to Administrative Appeals Tribunal review in
accordance with sub-clause 14(5).
Clause 14(6) requires the reviewer to provide the person with a statement of reasons.
The purpose of this requirement is to ensure that the review process is transparent and
the person knows the basis on which the AUSTRAC CEO made the decision. This
will assist the person to decide whether to pursue further reviews in the
Administrative Appeals Tribunal or a court.
11
Clause 15 - Administrative Appeals Tribunal review of certain decisions
This clause provides that internal review of a waiver decision by the AUSTRAC CEO
is a mandatory precursor to external merits review by the Administrative Appeals
Tribunal (AAT). The purpose is to ensure an efficient and accessible system for
merits review where a person must seek review by the AUSTRAC CEO of the
original decision before accessing more formal and expensive avenues for external
review by the AAT. This reduces the costs of merits review for the person and the
AUSTRAC CEO.
Clause 16 - Regulations
This clause confers a regulation making power on the Governor-General. The
regulation making power is intended to deal with administrative matters related to the
collection of the levy.
12
AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE
SUPERVISORY COST RECOVERY LEVY (CONSEQUENTIAL
AMENDMENTS) BILL 2011
Clause 1 - Short title
This clause is a formal provision specifying the Short Title of the Bill.
Clause 2 - Commencement
This clause specifies the dates on which various sections and schedules of the Act
commence. A staggered commencement is required as some clauses are dependent
on the enactment and commencement of various sections of the Australian
Transaction Reports and Analysis Centre Supervisory Cost Recovery Levy Bill 2011,
and the Combating the Financing of People Smuggling and Other Measures Bill 2011.
Clause 3 - Schedule(s)
This clause provides that each Act specified in the Schedule is amended or repealed as
specified. The first and second schedules amend the AML/CTF Act.
Schedule 1 - Amendment of the Anti-Money Laundering and Counter-Terrorism
Financing Act 2006
Item 1
Item 1 amends section 5 of the AML/CTF Act to include a definition of enrolment
details. This enables the AUSTRAC CEO to specify in Rules made under the
AML/CTF Act (AML/CTF Rules) the details that must be provided by a reporting
entity on enrolment.
Item 2
Item 2 inserts Part 3A Reporting Entities Roll into the AML/CTF Act. Part 3A sets
out the administrative procedures for enrolment and maintenance of the roll, as well
as the penalties for failure to enrol or maintain the enrolment record.
Clause 51A provides a simplified outline for the operation of Part 3A.
Clause 51B makes it compulsory for a reporting entity to enrol if they provide a
designated service within 28 days before or after the commencement of the section, or
after commencing to provide a designated service. The section will commence on a
single day to be fixed by Proclamation. However, if a day is not proclaimed earlier,
then six months after the Bill receives Royal Assent. Compulsory enrolment enables
AUSTRAC to identify its regulated population and to effectively and efficiently
deliver its services and administer the levy. Failure to enrol attracts a civil penalty.
Clause 51C requires that the AUSTRAC CEO maintain the Reporting Entities Roll
(the Roll). The Roll may be maintained as an electronic database. This will enable
reporting entities, where feasible, to update their details electronically. Clause
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51C (3) provides that the Roll is not a legislative instrument. The intention is that the
Roll simply records the status of a person as a reporting entity and does not affect any
entitlements or impose any liabilities as a consequence of enrolment. The Roll is
simply an administrative process for recording and quantifying the regulated
population for supervisory purposes.
Clause 51C(4) enables the AUSTRAC CEO to maintain the Roll by making
AML/CTF Rules that enable the correction of entries on the Roll or in relation to any
other matter relating to the administration and operation of the Roll.
Clause 51D requires the AUSTRAC CEO on receiving an application to enrol to enter
the person's name and details on the Roll. The AUSTRAC CEO is not required to
enrol a person if their name already appears on the Roll. The obligation rests on the
reporting entity to self-identify to the AUSTRAC CEO.
Clause 51E requires that a person applying to the AUSTRAC CEO for enrolment as a
reporting entity must do so in writing using the approved form and include the
information required by the AML/CTF Rules. The intention is that the AUSTRAC
CEO has the flexibility to determine the information required for effective enrolment.
This information may vary depending on the circumstances, and may include
information essential to the administration of the levy, for instance, the number of
employees of a reporting entity.
Clause 51F provides that once enrolled it is compulsory for a reporting entity to
update its enrolment details within 14 days of a change in their enrolment details. The
AML/CTF Rules will specify the circumstances in which the enrolment details must
be updated, such as change of address. The purpose of this clause is to ensure that the
Roll contains accurate and current information as to the reporting entity. A person
must update their details using the approved form. Approved forms are required to
ensure consistency in the information provided by reporting entities. Failure to
maintain enrolment details is a civil penalty.
Clause 51G provides that a person may apply in writing to the AUSTRAC CEO to
remove their name and enrolment details from the Roll. The request must be in
writing and contain the information required in the AML/CTF Rules. The intention
behind this requirement is that the AUSTRAC CEO may specify the information that
may be material in his or her decision to remove or not remove a person from the
Roll. The AUSTRAC CEO has the discretion as to whether a person will be removed
from the Roll having regard to a number of factors such as whether the person is
likely to provide a designated service in the future or whether there are any
outstanding reporting obligations.
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Schedule 2 - Infringement Notice Provisions
Part 1 - Amendments contingent on the commencement of the Combating the
Financing of People Smuggling and Other Measures Bill 2011
Items 1, 2, 3, 4, 5 and 6 amend the infringement notice scheme to include failure to
enrol and maintain enrolment details under sections 51(B)(1) and 51F(1), or Part 3A
of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006.
The main enforcement options in the existing Act are civil penalties, criminal
offences and enforceable undertakings. In many cases, particularly where minor
breaches are involved, civil penalty or criminal action against the reporting entity may
not be a proportionate response to the alleged breach. Further, these processes can be
costly and time consuming for all parties involved. AUSTRAC is able to accept
enforceable undertakings from regulated entities and this enforcement option has
already been used in a number of cases. However, enforceable undertakings may not
be the most appropriate enforcement tool for discrete instances of non-compliance,
such as failure to advise AUSTRAC of a change in circumstances under new section
51F.
Enabling AUSTRAC to issue infringement notices will mean that the regulator can
respond to breaches in a more efficient and proportionate way. The ability to impose
infringement notices for non-compliance with obligations is consistent with the
powers and approach of other regulators of Commonwealth legislation.
Under section 186A(1)(a) and 186A(2)(a) the AML/CTF Rules may set out one or
more kinds contraventions of sections 51B(1) and 51F(1) and specify for each
contravention the number of penalty units that will apply.
Part 2 - Transitional Provisions
Item 7 introduces transitional provisions in the event that the Combating the
Financing of People Smuggling and Other Measures Bill 2011 does not come into
effect before this Bill. These provisions enable AUSTRAC to issue infringement
notices for failure to enrol and maintain enrolment details under the new sections
51B(1) and 51F(1). In these transitional provisions the pecuniary penalty will be 60
penalty units for an alleged contravention by a body corporate and 12 penalty units for
an alleged contravention by a person other than a body corporate. These provisions
will continue to operate until such time as the Combating the Financing of People
Smuggling and Other Measures Bill 2011 comes into effect.
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