AML Policy

AML Policy

An anti-money laundering and counter-terrorism financing program (AML/CTF program) is central to the risk-based approach established by the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act). While the management of money laundering and terro rism financing (ML/TF) risk is an obligation of the AML/CTF Act, it does no t prescribe any specific risk management methodology for identifying and managing those business risks. Instead, it provides for flexibility in the methodology a reporting entity adopts for the purposes of identifying, mitigating and managing th e ML/TF risks that it may reasonably face in providing a designated service, having regard to the size, nature and complexity of its business.
The terms 'mitigating' and 'mitigation' are frequently used with respect to risk management. 'Mitigating' in the context of risk management implies that though it is generally not possible to completely remove the possibility of an ML/TF incident happening, it is possible to put safeguards in place to reduce the seriousness or extent of the incident. The Australian Transaction Reports and Analysis Centre (AUSTRAC) is Australia's Financial intelligence unit (FIU) and AML/CTF regulator, overseeing compliance with the AML/CTF Act. The AML/CTF Act uses a risk-based appr oach to create a business environment that is hostile to the conduct of ML/TF. This means that reporting entities and their officers have the respon sibility to dilige ntly assess ML/TF ri sk and to develop and implement a program that effectively identifies, mitigates and manages risk. Under the risk-based approach to AML/CT F, while AUSTRAC can provide guidance to a reporting entity, it rema ins the reporting entity’s responsibility to adequately determine its risks and to implemen t and manage its AML/CTF program