Definitions for Part
101. In this Part:
“customer”, includes:
(a) a person engaged in a business relationship; or
(b) the person in whose name a transaction or account is arranged, opened, or undertaken; or
(c) a signatory to a transaction or account; or
(d) any person to whom a transaction has been assigned or transferred; or
(e) any person who is authorised to conduct a transaction; or
(f) any person on whose behalf the account or transaction is being conducted; or
(g) any other person that may be prescribed.
“minimum retention period” for a document means:
(a) if the document relates to the opening of an account with a financial institution — 7 years after the day when the account is closed; or
(b) if the document relates to the opening by a person of a deposit box held by a financial institution — 7 years after the day when person ceases to use the deposit box; or
(c) in any other case — 7 years after the day when the relevant transaction takes place or the identity is verified, whichever is later.
Financial institutions and cash dealers to verify customers’ identity
102.(1) A financial institution or cash dealer shall identify the identity of a customer on the basis of any official or other identifying document and verify the identity of the customer on the basis of reliable and independent source documents, data or information or other evidence as is reasonably capable of verifying the identity of the customer when –
(a) a financial institution or cash dealer -
(i) enters into a continuing business relationship;
(ii) in the absence of such a relationship, conducts any transaction;
(b) there is a suspicion of a money laundering offence or the financing of terrorism; or
(c) the financial institution or cash dealer has doubts about the veracity or adequacy of the customer identification and verification documentation or information it had previously obtained.
(2) Without limiting the generality of subsection (1),
(a) if the customer is a legal entity, a financial institution or cash dealer shall adequately verify its legal existence and structure, including verification of:
(i) the customer’s name, legal form, address, principal owners and directors;
(ii) provisions regulating the power to bind the entity, and to verify that any person purporting to act on behalf of the customer is so authorised, and identify those persons;
(b) the official or identifying document required for the identification and verification of any particular customer or class of customers may be prescribed.
(3) A financial institution or cash dealer shall take reasonable measures to -
(a) obtain information on the purpose and intended nature of the business relationship;
(b) conduct ongoing due diligence on the business relationship with its customer;
(c) conduct ongoing scrutiny of any transaction undertaken throughout the course of the business relationship with a customer to ensure that the transaction being conducted is consistent with the financial institution’s knowledge of the customer, the customer’s business and risk profile, including, where necessary, the source of funds.
(4) If a person conducts a transaction through a financial institution or cash dealer, other than an occasional transaction below [ ] the financial institution shall identify and record the:
(a) name, address and occupation (or where appropriate business or principal activity) of each person:
(i) conducting the transaction; and
(ii) for whom, or for whose ultimate benefit, the transaction is being conducted, where the financial institution has reasonable grounds to believe that the person is undertaking the transaction on behalf of any other person or persons,
(b) nature and date of the transaction;
(c) type and amount of currency involved;
(d) the type and identifying number of any account with the financial institution or cash dealer involved in the transaction;
(e) if the transaction involves a negotiable instrument other than currency, the name of the drawer of the instrument, the name of the institution on which it was drawn, the name of the payee (if any), the amount and date of the instrument, the number (if any) of the instrument and details of any endorsements appearing on the instrument;
(f) the name and address of the financial institution or cash dealer, and of the officer, employee or agent of the financial institution or cash dealer who prepared the record.
(5) If a person conducts a transaction through a financial institution or cash dealer and the financial institution or cash dealer has reasonable grounds to believe that the person is undertaking the transaction on behalf of any other person or persons, then, in addition to complying with subsections (1), (2), (3) and (4) the financial institution or cash dealer must verify the identity of the other person or persons for whom, or for whose ultimate benefit, the transaction is being conducted.
(6) If a financial institution or cash dealer contravenes subsections (1), (2), (3), (4) or (5) the financial institution is guilty of an offence punishable on conviction:
(a) in the case of an individual – by a fine of $50,000 or imprisonment of up to 5 years, or both; or
(b) in the case of a body corporate – by a fine of $150,000.
(7) Subsections (1), (2), (3), (4) and (5) do not apply:
(a) if the transaction is an occasional transaction not exceeding [ ] unless the financial institution has reason to suspect that the transaction is suspicious or unusual;
(b) in such other circumstances as may be prescribed by the Minister of [ ].
(8) For purposes of subsection (7), “occasional transaction” means any transaction involving cash that is conducted by any person otherwise than through an account in respect of which the person is the customer.
Necessity of identification to conduct business
103. If satisfactory evidence of the identity is not produced to or obtained by a financial institution or cash dealer under section 102, the financial institution or cash dealer shall not proceed any further with the transaction unless directed to do so by the Financial intelligence Unit established under Part 4 and report the attempted transaction to the Financial Intelligence Unit as a suspicious transaction under section 107.
Financial institutions or cash dealer to monitor transactions
104.(1) A financial institution or a cash dealer shall scrutinize to –
(a) any complex, unusual or large transactions;
(b) any unusual patterns of transactions,
that have no apparent or visible economic or lawful purpose.
(2) A financial institution or a cash dealer shall scrutinize to -
(a) business relations and transactions with persons in jurisdictions that do not have adequate systems in place to prevent or deter money laundering or the financing of terrorism;
(b) wire transfers that do not contain complete originator information.
(3) In relation to subsections (1) and (2), a financial institution or a cash dealer shall:
(a) examine as far as possible the background and purpose of the transactions or business relations and record its findings in writing; and
(b) report the transactions and its findings to the Financial Intelligence Unit as a suspicious transaction under section 107.
Banks and money transmission service providers to include originator information
105. A financial institution or a cash dealer shall include accurate originator information and other related messages on electronic funds transfers and other forms of funds transfers and such information shall remain with the transfer.
Financial institutions and cash dealers to establish and maintain customer records
106.(1) A financial institution or cash dealer must establish and maintain:
(a) records of all transactions in foreign currency carried out by it, in accordance with subsection (3); and
(b) if evidence of a person’s identity is obtained in accordance with section 102 — a record that indicates the kind of evidence obtained, and comprises either a copy of the evidence or information that enables a copy of it to be obtained.
(2) A financial institution or cash dealer shall maintain accounts in the true name of the account holder.
(3) A financial institution or a cash dealer shall not open, operate or maintain any anonymous account, or any account which is in a fictitious, false or incorrect name.
(4) The record of a transaction under subsection (1) (a) must show:
(a) the name, address and occupation (or, where appropriate, the business or principal activity) of each person:
(i) conducting the transaction; or
(ii) if known — on whose behalf the transaction is being conducted; and
(b) how the financial institution or cash dealer verified the identity of each person mentioned in paragraph (a); and
(c) the nature and date of the transaction; and
(d) the type and amount of currency involved; and
(e) the type and identifying number of any account with the financial institution or cash dealer involved in the transaction; and
(f) if the transaction involves a negotiable instrument other than currency:
(i) the name of the drawer of the instrument; and
(ii) the name of the institution on which it was drawn; and
(iii) the name of the payee (if any); and
(iv) the amount and date of the instrument; and
(v) the number (if any) of the instrument; and
(vi) details of any endorsements appearing on the instrument; and
(g) the name and address of the financial institution or cash dealer, and of the employee or agent of the financial institution or cash dealer who prepared the report.
(5) A financial institution or cash dealer that fails, without reasonable excuse, to comply with subsection (1), (2) or (3) commits an offence punishable by:
(a) if the offender is a natural person — a fine of $30 000 or imprisonment for 5 years, or both; or
(b) if the offender is a body corporate — a fine of $150 000.
Financial institutions and cash dealers to report suspicious transactions
107.(1) If a financial institution or cash dealer:
(a) is a party to a transaction; and
(b) has reasonable grounds for suspecting that information that it has concerning the transaction may be relevant to the investigation or prosecution of a person for a serious offence;
it must do the things required by subsection (2) as soon as possible but no later than 3 working days after forming that suspicion, and if possible before the transaction is carried out.
(2) A financial institution or cash dealer must
(a) take reasonable measures to find out the purpose of the transaction, the origin and ultimate destination of the funds involved, and the identity and address of the ultimate beneficiary; and
(b) make a report of the transaction in accordance with subsection (3) to the Unit in writing or in any other way that the Attorney-General from time from time approves.
(3) A report required by subsection (2) (b) shall:
(a) contain the details about the transaction mentioned in subsection (2) (a) and section 104(3); and
(b) contain a statement of the grounds on which the financial institution or cash dealer holds the suspicion; and
(c) be signed or otherwise authenticated by the financial institution or cash dealer.
(4) A financial institution or cash dealer that has reported a suspicious transaction in accordance with this Part shall, if asked to do so by the Unit, give the Unit any further information that it has about the transaction.
(5) A financial institution or cash dealer that fails, without reasonable excuse, to comply with subsections (1), (2), (3) or (4) commits an offence punishable by:
(a) if the offender is a natural person — a fine of $30 000 or imprisonment for 5 years, or both; or
(b) if the offender is a body corporate — a fine of $150 000.
(6) If a financial institution or cash dealer gives information to the Unit about its suspicion about a transaction to which it is a party, the institution or dealer, or an employee or agent of the institution or dealer, must not, unless required to do so under this or another Act, disclose to anyone else:
(a) that the institution or dealer has formed the suspicion; or
(b) that information has been given; or
(c) any other information from which the person to whom the information is disclosed could reasonably be expected to infer that the suspicion had been formed or that the first-mentioned information had been given.
(7) A financial institution or cash dealer, or an employee or agent of a financial institution or cash dealer, who contravenes subsection (6) is guilty of an offence punishable by:
(a) if the offender is a natural person — a fine of $12 000 or imprisonment for 2 years, or both; or
(b) if the offender is a body corporate — a fine of $60 000.
Financial institutions and cash dealers to establish and maintain internal reporting procedures
108.(1) A financial institution or cash dealer shall establish and maintain internal procedures:
(a) to identify persons to whom an employee is to report any information that comes to the employee’s attention in the course of employment, and that gives rise to knowledge or suspicion by the employee that another person is engaged in money-laundering; and
(b) to enable any person identified under paragraph (a) to have reasonable access to information that may be relevant to deciding whether sufficient basis exists to report the matter to the Unit; and
(c) to require the identified person to report the matter to the Unit, if he or she decides that sufficient basis exists to do so.
(2) A financial institution or cash dealer that fails, without reasonable excuse, to comply with subsection (1) commits an offence punishable by:
(a) if the offender is a natural person — a fine of $30 000 or imprisonment for 5 years, or both; or
(b) if the offender is a body corporate — a fine of $150 000.
Further preventive measures by financial institutions and cash dealers
109.(1) A financial institution or cash dealer shall establish and maintain internal procedures:
(a) to make its employees aware of domestic laws about money-laundering, and the procedures and policies established and maintained by it under this Act; and
(b) to train its employees to recognise and handle money-laundering transactions.
(2) A financial institution or cash dealer that fails, without reasonable excuse, to comply with subsection (1) commits an offence punishable by:
(a) if the offender is a natural person — a fine of $30 000 or imprisonment for 5 years, or both; or
(b) if the offender is a body corporate — a fine of $150 000.
Financial institutions to retain records
110.(1) A financial institution or cash dealer shall keep, for the minimum retention period applicable to the document, a document that relates to a financial transaction carried out by the institution or dealer in its capacity as a financial institution or cash dealer, including (without limiting the generality of this obligation) a document that relates to a transaction of a kind mentioned in the definition of customer in section 101.
(2) However, subsection (1) does not apply to:
(a) a document that relates to a single deposit, credit, withdrawal, debit or transfer of an amount of up to $200 (or a higher amount prescribed for this paragraph); or
(b) a document that:
(i) is not a document given to the institution by or for a customer; and
(ii) need not be retained to preserve a record of the financial transaction concerned.
(3) A financial institution or cash dealer required to keep documents under this section shall keep them on microfilm or in another way that makes retrieving them, or the information in them, reasonably practicable.
(4) A financial institution or cash dealer that fails, without reasonable excuse, to comply with subsection (1) or (3) commits an offence punishable by:
(a) if the offender is a natural person — a fine of $30 000 or imprisonment for 5 years, or both; or
(b) if the offender is a body corporate — a fine of $150 000.
(5) This section does not limit any other obligation of a financial institution or cash dealer to retain documents.
Register of original documents
111.(1) If, despite section 101 (1), a financial institution or cash dealer is required by law to release an original document before the end of the minimum retention period applicable to the document, the institution or dealer shall keep a complete copy of the document until the period has ended or the original document is returned, whichever occurs first.
(2) The financial institution or cash dealer shall maintain a register of documents released under subsection (1).
(3) A financial institution or cash dealer that fails, without reasonable excuse, to comply with subsection (1) or (2) commits an offence punishable by:
(a) if the offender is a natural person — a fine of $30 000 or imprisonment for 5 years, or both; or
(b) if the offender is a body corporate — a fine of $150 000.
Protection for financial institutions etc
112. If a financial institution or cash dealer, or an employee or agent of a financial institution or cash dealer, gives information to a police officer or the Attorney-General under section 107(1) as soon as practicable after the grounds for suspicion mentioned in that section become known, the institution or dealer is taken, for sections 12 and 13, not to have been in possession of that information at any time.
