Lecture Fundamentals of business law (4th): Chapter 6 - Margaret L. Barron, Richard J.A. Fletcher

Chapter 6 - Financial transaction reports Act 1988 (Cwlth). In this chapter you should understand: the objectives of the FTR Act and the AML/CTF Act, to whom the Acts apply, the types of transactions that must be reported, the requirements that must be met for customer identification, the penalties imposed by the Acts, the impact of the Acts on businesses and trade, the role of AUSTRAC in relation to the Acts.

This is the prescribed textbook for your course.

Financial Transaction

Reports Act 1988

(Cwlth)

Chapter 6

Financial Transactions Reports

Act 1988 (Cwlth)

• Objective - To assist in the detection

of tax evasion and other criminal

activity, such as corporate crime and the “laundering” of money obtained

from drug trafficking and organised

crime.

Australian Transaction Reports and Analysis

(AUSTRAC)

• Body responsible for administering

Act:

- collects

- compiles

- analyses, and

- distributes information

Distribution of information

Information available to:

• Australian Tax Office

• Federal police

• Customs services

• National Crimes Authority

• State law enforcement agencies

Obligations and reporting requirements

On cash dealers [S3(1)]:

• banks building societies

• insurance companies finance companies

• securities dealers futures dealers

• casinos bookmakers

• Totalisator Agency Board (TAB) and solicitors

To report:

• cash transaction (i.e the physical transfer of currency from

one person to another of not less than $10 000 within

Australia)

• suspect transactions.

Within:

• 15 days of transaction involving Australian currency (1 or 2 days if suspect)

• end of day after transaction involving foreign currency

Reporting currency importing

and exporting

• Where members of the community

personally conveyed into and out of

Australia, Australian currency or

foreign currency not less than

$10 000, a report must be made to

Customs Officer when brought into or taken out of Australia.

Suspect transactions

One that causes the cash dealer to feel apprehensive

or mistrustful about the transaction (non-cash and

cash transactions) and may be relevant with respect to:

• tax evasion or attempted evasion

• an offence against the law of the Commonwealth

or a territory

• relating to the enforcement of the Proceeds

of Crimes Act 1987 (Cwlth).

Opening new accounts

Identification of signatory to account

via:

• identification reference

• primary or secondary identification document

International funds transfer

instructions

• Transferred into or out of Australia

– electronically

– telegraphically

• Requires reporting

Exemptions from reporting

requirements

If transaction:

• Entered on exemption register maintained by financial

institutions

eg Retail business

Entertainment

Hospitality business

Vending machine business

or individually approved transactions

• Approved cash dealer

Identifying cash dealer

• Approved by director of AUSTRAC

as a cash dealer who can verify the identity of signatories to accounts,

utilising the 100 points system.

Penalties for failure to comply

Natural

Fine up to $25 000