In a recent webinar for Accurium, Gilbert said other activities that could be classed as a “designated service” include controlling and managing a person’s accounts, securities, virtual assets, other property, or an execution of a transaction, assisting and organising or planning a transaction for equity or debt financing relating to a body corporate.
“It also includes assisting in planning and executing and creating or restructuring a body corporate or a legal arrangement. This includes acting on the person’s behalf, acting as a director or a secretary, a power of attorney of a body corporate or a legal arrangement, a partner in a partnership trustee of an express trust or other functionally equivalent position on behalf of the person acting as a nominee shareholder of a body corporate or a legal arrangement,” he said.
“Additionally, this includes arranging for another person to act in those roles, and the final one is providing a registered office service. One of the key issues here that has also come up, and this is important to cover, is where accountants may be looking at this and thinking they don’t provide any of these designated services and won’t be caught, but do they have evidence that they have done the due diligence to determine that they do not provide those designated services?”
Gilbert said this evidence needs to be documented so that if an accountant is asked to produce it, they can.
“It often comes up that an accountant may say they have existing clients, and decide they are not going to provide designated services going forward. [The challenge is] where you have existing clients or pre-commencement clients, if you’ve provided a designated service to them in the past, and you then provide a designated service to them post 1 July, you’re then caught in the regime,” he said.
“It’s important to document that you’ve done that review. We’re four weeks away from the scenario where this all takes effect. So from 1 July if you provide a designated service to an existing client or a new client, then you need to have made sure that you’ve registered with AUSTRAC. If you haven’t done that from 1 July, you have 28 days to do so.”
Gilbert said the compliance arrangements require accountants to enrol with the AUSTRAC incoming program if they provide a designated service. This is a written AML program that covers off money laundering risks and puts in place policies and procedures around personal due diligence completed for staff that are involved in the business.
“As well, there is customer due diligence or client due diligence, in terms of identifying who your client is. This is the know-your-client scenario, who is my client, and what are they asking me to do?” he said.
“You need to meet governance requirements by appointing a compliance officer, that’s fundamental. When you apply with AUSTRAC, you have to nominate the compliance officer, and you need to have a governing body, and a senior manager for oversight.”
He continued that in terms of reporting, the business has to also have a suspicious matters report as part of the identification process with a new client.
“It could even be an existing client, recognising that something doesn’t add up, that could potentially become a suspicious matters report,” he said.
“There is also a requirement that if it is a suspicious matter, to report that to AUSTRAC, as well as the threshold transaction reports. You need to be using those approved forms, and every year you will need to lodge an annual report to AUSTRAC. There are some serious ramifications for failing to go through that process.”
