Money laundering: Oz's long arm
New legislation will apply to overseas entities with even minimal connection with Australia. Financial institutions around the world need to make sure they don't get hung out to dry by new money laundering rules.
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The Anti-Money Laundering and Counter-Terrorism Financing Act 2006 is now law in Australia. The Act's broad and complex obligations can apply easily to overseas entities undertaking even minimal activities in Australia as well as to Australian entities' overseas activities.
First, some background on the Act and a brief explanation of what it requires entities to do.
The Act received Royal Assent on December 12 2006 after a period of public consultation (the related Anti-Money Laundering and Counter-Terrorism Financing (Transitional Provisions and Consequential Amendments) Act 2006 was also assented to on the same day). Different aspects of the Act will come into effect on a staggered basis. Some obligations commenced on December 13 2006 and the rest will commence over the next two years. By December 12 2008 the Act will apply in full. The Australian Government has also introduced the Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2007 into Parliament to make a number of amendments to the new Act and other legislation.
The Act provides for significant penalties if breached (for example, up to A$11 million ($8.65