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Draft AML/CTF Rules relating to customer identification procedures where a business is transferred, sold or restructured to another entity
19 December 2008
What’s new?
AUSTRAC have released a draft rule relating to customer identification procedures and special circumstances that may apply as a result of a reporting entity’s restructure, takeover, sale or transfer of all or part of its business to another reporting entity.
Such a restructure may result in the mass transfer of customers from one reporting entity to another; existing AML/CTF provisions requiring customer identification could have significant business impact on the second reporting entity, and specifically to customers who may have already been identified by the first reporting entity.
The draft rule, if enabled, will exempt the second company from carrying out the applicable customer identification procedures on transferring customers, but only if they have:
- Assessed the ML/TF risk it may face if it provides a designated service to those customers
- Established whether an applicable customer identification procedure has been conducted
- Considered if it is reasonable for them to rely on that procedure.
The draft rules also allow the second reporting entity to treat any pre-commencement customers of the first entity as a pre-commencement customer of theirs, but again, only if they have assessed the ML/TF risk and have appropriate policies and procedures in place regarding that risk.
How does this apply to you?
At the moment this rule is in draft format and for your information only.
A consultation period is open until the 30th of January 2009 if you wish to comment.
For further information:
Certainty Compliance can help keep you up to date with all your customer identification policies and procedures. Please contact a Consultant on (02) 9238 8091 or enquiries@certaintycompliance.com.au