Terminology

ML/TF/PF Terms

Money laundering (ML) refers to the process of turning the proceeds of crime into funds or assets that seem legitimate.

Terrorism financing (TF) encompasses the ways in which funds or financial support are provided to terrorist organisations that pose a threat to national security.

Proliferation financing (PF) refers to the act of providing funds or financial services for the manufacture, acquisition, exporting or transporting of weapons for mass destruction.

AML/CTF Program

AML/CTF Program sets out how a reporting entity meets their AML/CTF compliance obligations (Part 1A ).

Governing Body

Governing Body is responsible for overseeing the reporting entity’s assessment of risk and adherence to its AML/CTF Program, ensuring the practice is taking reasonable steps to comply with the broader regime.

Senior Manager is responsible for making key AML/CTF decisions including approving AML/CTF Programs, updates and business relationships.

AML/CTF Compliance Officer is responsible for overseeing the implementation of and day to day compliance with the AML/CTF Program, ensuring staff training and communicating with AUSTRAC on behalf of the practice.

CDD

Customer Due Diligence (CDD) is the process of establishing the identity of the client, verifying the nature of the transaction, assessing the client’s ML/TF/PF risk and collecting KYC information (Part 2).

Know Your Customer (KYC) information refers to any information about a client that:

• provides reasonable grounds to establish matters required for initial CDD, or
• enables you to identify/assess the ML/TF risk of the client (s 5).

Reporting

Suspicious Matter Report (SMR) is submitted if a practitioner forms a suspicion based on reasonable grounds to suspect that they have information that may be relevant to a crime, a person is not who they claim to be, or a person is planning a ML/TF offence (s 41(1)).

Threshold Transaction Report (TTR) is submitted for transfers of $10,000 or more in cash (s 43).