The Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) and Rules are federal laws with the express goal of reducing Australia's exposure to terrorism-financing through money-laundering activities.
The laws capture organisations on the basis of designated services. As gambling (gaming machine play and wagering but not keno and bingo) are classified as designated services, all clubs that provide these services are deemed reporting entities for the purpose of compliance.
It is important to note that clubs are reporting entities for gaming, while the reporting entity for wagering in clubs is the TAB provider. This is on the basis that clubs have ownership of their gaming machines. Clubs that have wagering must follow directives issued by their TAB provider.
The Act requires reporting entities to implement a compliance program as a means of preventing their designated services from being used for the purpose of money-laundering or terrorism-financing activities. The compliance program must include a range of matters, including:
- risk assessment and management of designated services
- customer identification and verification to ascertain customers are who they claim to be
- reporting on threshold transactions (payment of $10,000 or more in cash) and suspicious matters (anything that appears or is suspicious)
- board/employee training and due diligence
- oversight by board and management
- regular independent review of the compliance efforts
- liaison with the regulator: Australian Transaction Reports and Analysis Centre (AUSTRAC),
Why the Complex Requirements
It is estimated that approximately US$1.5 trillion is laundered worldwide every year. This includes approximately US$10 billion in the Asia-Pacific region. At least 10% of this amount comes from small transactions. Most of this 'dirty' money (which become 'clean' through money laundering) goes towards financing of terrorism.
Based on these facts, it is important that even the smallest risk of money-laundering or terrorism-financing is identified and eliminated or else managed.
The fundamental position of the government is that a risk is a risk, no matter how small, but reporting entities can assess their own level of risk and act accordingly. So a low risk entity such a club would not have to implement the same level of compliance as financial institutions (which are high risk entities).
What clubs must do
All club with gaming machines must implement an effective compliance program, do board/employee risk awareness training, engage in regular independent review of their compliance efforts through an internal or external party and lodge an annual compliance report (to AUSTRAC):
- Clubs can access a user-friendly compliance guide, which contains an example of a standard compliance program template (schedule 5), by calling Clubs Queensland. It is critical that clubs customise the template to their individual circumstances because no two clubs' compliance program can be exactly the same. There is no cost for this resource.
- Clubs can purchase a succinct board/employee risk awareness training program by clicking here. This training program is self-placed and runs for about 45 minutes. Upon successful completion, clubs can obtain up to 10 certificates of completion from Clubs Queensland. The total cost of the training program is $165 (GST incl.)
- Clubs must engage in regular independent review of their compliance efforts through an internal or external party. "Regular" in this context means at least once a year and "independent" means a party who is not involved in the day-to-day implementation of the compliance program. More information is available by clicking here and watching this 4-minute clip.
- Clubs should complete the annual compliance report by registering on AUSTRAC Online.
Clubs should note that the above are the minimum compliance efforts and significant civil and criminal penalties apply for non-compliance.