June 2006 Top Story:
***MLI ARCHIVE***
Consultation delay to fine-tune draft:
The second consultation period on the government’s anti-money laundering reform package has been delayed until mid June to enable greater consideration of the views of industry and a Senate committee investigating the area.
The Minister for Justice and Customs, senator Chris Ellison, said late last month that more than 120 submissions on the legislation had been received and the outcomes of a report from a Senate committee inquiry into the draft bill also needed to be considered.
“While we are close to an agreed position, a small delay in releasing the revised bill will help to ensure that we get the balance right,” Ellison said.
“The government has reviewed the recommendations of the committee, along with submissions from industry, and is fine-tuning the bill and rules.”
It is understood that the delay will have no effect on the time period allotted for the second period of consultation, which will remain a three-week window after the revised legislation is released.
Ellison said he had been impressed by industry’s willingness to work with the government on developing the legislation.
The proposed legislation was subject to some criticism in the submissions, with both the Financial Planning Association and the Association of Superannuation Funds of Australia considering it to be too prescriptive.
The Law Council of Australia has said it is considering legal action against the bill, as it feared it would destroy time-honoured lawyer-client privilege.
The FPA and ASFA have advocated a more risk-based approach that would allow entities to introduce their own policies and procedures in line with the rules set by Austrac and would reduce the level of action required on the part of planners for certain lower risk financial transactions.
Chris Cass, a forensic partner at Deloitte in Sydney, told MLI that this was not a problematic delay. He said he understood that it had been driven “by the sheer volume of queries and the feeling between the government and some of the industry in resolving these issues”.
“It’s not always the number of submissions that delays these things, it’s the passion, the extent to which each party upholds their part,” Cass said.
“Where there may be major differences on key policy issues then you will appreciate these things don’t get ironed out in a 30 minute phone call.”
While Cass said the delay was frustrating, “itwas neitherher nor there in the grand scheme of things”.
Gary Gill, KPMG’s leader of investigations and integrity risk management, agreed that the delay was not problematic and said he expected there to be less prescription within the revised legislation.
“It’s going to be more-risked-based which means the organisations will effectively have to make their own decisions as to what’s risky or not,” Gill said.
“I’d like to think that we will end up with something most people
will agree with.”
Senator Ellison’s release statement that from the beginning of
June until the release of the draft revision, he would be discussing
the experiences of the US and UK in implementing anti-money laundering
reforms. The results of these discussions would also inform the revised
draft legislative package.
“I am confident that the second consultation period will enable us to produce a regime that is fair to legitimate business while fulfiling Australia’s law enforcement requirements and preserving privacy interests,” he said.
DelMonte Publications June 2006
