Key takeaways
Reporting cash transactions
AUSTRAC has this week updated its guidance on reporting cash transactions above the AUD 10,000 threshold. There had always been some uncertainty where a single customer or account was involved in multiple transactions that when combined reached this threshold. Practically, there are various permutations as to how this occurs.
To describe each circumstance, AUSTRAC has provided 13 examples across a broad range of sectors along with its view as to whether a threshold transaction report is required and which funds are to be included in the report. We have summarised these into three categories of examples below.
The guidance follows a consultation process and associated draft guidance issued late last year. Previously, AUSTRAC’s guidance required the reporting entity to determine in each circumstance whether multiple cash transactions that reached the AUD 10,000 in total should be treated as a single transaction. Now AUSTRAC has clarified that each transaction is to be evaluated on its own, but that the reporting entity must turn its mind to determine whether the multiple transactions trigger a suspicious matter reporting obligation.
In summary the examples make it clear that each transaction should always be evaluated on its own. This is the case even for transactions that closely follow another and appear to expressly be separated at the customer's choice.
AUSTRAC is providing a 12-month transition period from 1 July 2022 for businesses to update their systems, processes and staff training.
Cross-border movement reporting
In addition to the above new guidance for physical currency threshold transactions, from 17 June 2022, changes to the reporting of cross-border movement of monetary instruments of AUD 10,000 or more (or foreign currency equivalent) have also taken effect. This follows reforms introduced in 2020.
Previously, a report to AUSTRAC was only required in respect of non-physical currency above the threshold if requested to do so by a police or customs officer. Since 17 June 2022, an obligation to report cross-border movement of all monetary instruments valued at AUD 10,000 or more to AUSTRAC (whether or not there has been a request by a police or customs officer) applies.
AUSTRAC examples
A summary of examples where a threshold transaction report will not be required includes the following:
- Examples 1, 2 & 3: Split deposit into two accounts - Only if a single deposit is more than the threshold is there a reporting requirement for that deposit only. Amounts are not combined.
- Examples 4, 5, 6 & 7: Multiple deposits into same account - Only if a single deposit is more than the threshold is there a reporting requirement for that deposit only. Amounts are not combined. This applies even if the amounts were split by an agent accepting the deposit (e.g., Post Office)
- Examples 8, 9, 10, 11, 13 & 14: Separate designated services (purchase of bank cheque and making deposit - with cash) are treated separately. Likewise the purchase of two different currencies, two purchases of gaming chips at one casino, two offshore transfers or placing multiple wagers on a race are all treated separately.
However, it is important to note that in each of these examples a suspicious matter report may still be required unless there was a plausible basis for separating the transactions as described.
* * * * *
Feel free to reach out to any of the lawyers named in this alert or your usual contacts at Baker McKenzie with any queries you have more generally about the application of the new AUSTRAC guidance or reporting requirements under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth), or how you may be impacted by some of the changes described.
