Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2017 (130 of 2017)
Schedule 1 Amendments
Part 2 Digital currencies
Anti-Money Laundering and Counter-Terrorism Financing Act 2006
20 After Part 6
Insert:
Part 6A - The Digital Currency Exchange Register
Division 1 - Simplified outline
76 Simplified outline
The following is a simplified outline of this Part:
• This Part provides for a system of registration for providers of digital currency exchange services.
• Division 2 sets out offences and civil penalties in relation to the provision of registrable digital currency exchange services by persons who are not registered.
• Division 3 requires the AUSTRAC CEO to maintain the Digital Currency Exchange Register and sets out the process of applying for registration.
Division 2 - Restrictions on providing digital currency exchange services
76A Unregistered persons must not provide certain digital currency exchange services
Registrable digital currency exchange services
(1) A person (the first person ) must not provide a registrable digital currency exchange service to another person if the first person is not a registered digital currency exchange provider.
Breach of conditions
(2) A person must not breach a condition to which the registration of the person as a digital currency exchange provider is subject.
Offences
(3) A person commits an offence if:
(a) the person is subject to a requirement under subsection (1) or (2); and
(b) the person engages in conduct; and
(c) the person's conduct breaches the requirement.
Penalty: Imprisonment for 2 years or 500 penalty units, or both.
(4) Strict liability applies to paragraphs (3)(b) and (c).
Note: For strict liability , see section 6.1 of the Criminal Code.
(5) A person commits an offence if:
(a) the person is subject to a requirement under subsection (1) or (2); and
(b) the person engages in conduct; and
(c) the person's conduct breaches the requirement; and
(d) the AUSTRAC CEO previously:
(i) gave the person a direction under subsection 191(2) in relation to subsection (1) or (2) of this section; or
(ii) accepted an undertaking given by the person under section 197 in relation to subsection (1) or (2) of this section; and
(e) that was the only occasion on which the AUSTRAC CEO previously gave such a direction to, or accepted such an undertaking from, the person.
Penalty: Imprisonment for 4 years or 1,000 penalty units, or both.
(6) Strict liability applies to paragraphs (5)(b) and (c).
Note: For strict liability , see section 6.1 of the Criminal Code.
(7) A person commits an offence if:
(a) the person is subject to a requirement under subsection (1) or (2); and
(b) the person engages in conduct; and
(c) the person's conduct breaches the requirement; and
(d) the AUSTRAC CEO previously:
(i) gave the person a direction under subsection 191(2) in relation to subsection (1) or (2) of this section; or
(ii) accepted an undertaking given by the person under section 197 in relation to subsection (1) or (2) of this section; and
(e) that was not the only occasion on which the AUSTRAC CEO previously gave such a direction to, or accepted such an undertaking from, the person.
Penalty: Imprisonment for 7 years or 2,000 penalty units, or both.
(8) Strict liability applies to paragraphs (7)(b) and (c).
Note: For strict liability , see section 6.1 of the Criminal Code.
(9) A person commits an offence if:
(a) the person is subject to a requirement under subsection (1) or (2); and
(b) the person engages in conduct; and
(c) the person's conduct breaches the requirement; and
(d) either:
(i) the person had previously been convicted of an offence against subsection (3), (5) or (7), and that conviction has not been set aside or quashed; or
(ii) an order had previously been made against the person under section 19B of the Crimes Act 1914 in respect of an offence against subsection (3), (5) or (7), and that order has not been set aside.
Penalty: Imprisonment for 7 years or 2,000 penalty units, or both.
(10) Strict liability applies to paragraphs (9)(b) and (c).
Note: For strict liability , see section 6.1 of the Criminal Code.
Civil penalty
(11) Subsections (1) and (2) are civil penalty provisions.
Division 3 - Registration of persons
76B Digital Currency Exchange Register
(1) The AUSTRAC CEO must maintain a register for the purposes of this Part, to be known as the Digital Currency Exchange Register.
(2) The AUSTRAC CEO may maintain the Digital Currency Exchange Register by electronic means.
(3) The Digital Currency Exchange Register is not a legislative instrument.
(4) The AML/CTF Rules may make provision for and in relation to the following:
(a) the correction of entries in the Digital Currency Exchange Register;
(b) the publication of the Digital Currency Exchange Register in whole or part, or of specified information entered on the Digital Currency Exchange Register;
(c) any other matter relating to the administration or operation of the Digital Currency Exchange Register.
76C Information to be entered on the Digital Currency Exchange Register
If the AUSTRAC CEO decides to register a person under subsection 76E(2), the AUSTRAC CEO must enter the following details on the Digital Currency Exchange Register:
(a) the name of the person;
(b) any conditions to which the registration of the person is subject;
(c) the date on which the registration takes effect;
(d) the registrable details in relation to the person.
76D Applications for registration
(1) A person may apply in writing to the AUSTRAC CEO for registration as a digital currency exchange provider.
(2) An application under subsection (1) must:
(a) be in the approved form; and
(b) contain the information required by the AML/CTF Rules.
(3) Without limiting the information that the AML/CTF Rules may require under paragraph (2)(b), the AML/CTF Rules may require information relating to the matters mentioned in paragraph 76E(2)(a) or in Rules made under paragraph 76E(2)(b) (these provisions deal with matters to which the AUSTRAC CEO must have regard in deciding whether to register a person).
Deemed refusal in certain circumstances
(4) If the AUSTRAC CEO has not made a decision on the application within the relevant period, the AUSTRAC CEO is taken to have decided not to register the person at the end of the relevant period. The relevant period is the period of 90 days beginning on the latest of the following days:
(a) the day the application is made;
(b) if the AUSTRAC CEO requests information under subsection 76Q(1) in relation to the application - the last day such information is provided;
(c) if the person makes a submission under section 76S in relation to the application - the day the person makes the submission.
Note: A deemed decision not to register the person is reviewable (see Part 17A).
(5) However, if the AUSTRAC CEO determines in writing that:
(a) the application cannot be dealt with properly within the 90 day period, either because of its complexity or because of other special circumstances; and
(b) that period is extended by a specified period of not more than 30 days;
the relevant period is that period as so extended. The AUSTRAC CEO must notify the applicant in writing of the determination before the end of the 90 day period.
76E Registration by AUSTRAC CEO
When section applies
(1) This section applies if an application has been made under section 76D for registration of a person.
When AUSTRAC CEO must register a person
(2) The AUSTRAC CEO must decide to register the person in accordance with the application if the AUSTRAC CEO is satisfied that it is appropriate to do so, having regard to:
(a) whether registering the person would involve a significant money laundering, financing of terrorism or other serious crime risk; and
(b) such other matters (if any) as are specified in the AML/CTF Rules under this paragraph.
Note: A decision not to register the person is reviewable (see Part 17A).
Matters that may be specified in the AML/CTF Rules
(3) Without limiting the matters that the AML/CTF Rules may specify under paragraph (2)(b), the matters may relate to the following:
(a) offences of which the applicant for registration, or any other person, has been charged or convicted under the law of the Commonwealth, a State or Territory or a foreign country;
(b) the compliance or non-compliance of the applicant, or any other person, with this Act or any other law;
(c) the legal and beneficial ownership and control of the applicant, or any other person.
Notice of decision to register
(4) The AUSTRAC CEO must, as soon as practicable after deciding to register an applicant, give a written notice to the applicant.
Contents of notice of decision to register
(5) A notice under subsection (4) must specify:
(a) the conditions (if any) to which the registration is subject (see section 76G); and
(b) the date on which the registration takes effect.
76F Spent convictions scheme
The AML/CTF Rules made under paragraph 76D(2)(b) or 76E(2)(b) must not affect the operation of Part VIIC of the Crimes Act 1914 (which includes provisions that, in certain circumstances, relieve persons from the requirement to disclose spent convictions and require persons aware of such convictions to disregard them).
76G Registration may be subject to conditions
(1) The AUSTRAC CEO may, in writing, impose conditions to which the registration of a person under this Part is subject.
Note: A decision to impose a condition is reviewable (see Part 17A).
(2) Without limiting the conditions that the AUSTRAC CEO may impose under subsection (1), the conditions may relate to the following:
(a) the value of digital currency or money exchanged;
(b) the volume of digital currency exchanged (whether by reference to a particular period, a particular kind of digital currency, or otherwise);
(c) the kinds of digital currencies exchanged;
(d) requiring notification of the exchange of particular kinds of digital currency, changes in circumstances, or other specified events.
Note: Section 76P imposes a general obligation in relation to notification of changes in circumstances.
76H When registration of a person ceases
(1) The registration of a person ceases at the earliest of the following times:
(a) when the cancellation of the registration of the person under section 76J takes effect;
(b) when the entry relating to the registration of the person is removed from the Digital Currency Exchange Register under subsection 76M(2);
(c) subject to subsection (2) - 3 years after the day on which the registration took effect;
(d) in the case of an individual - when the individual dies;
(e) in the case of a body corporate - when the body corporate ceases to exist.
(2) Paragraph (1)(c) is subject to the AML/CTF Rules made under section 76L (which deals with renewal of registration).
76J Cancellation of registration
(1) The AUSTRAC CEO may cancel the registration of a person if the AUSTRAC CEO is satisfied that it is appropriate to do so, having regard to:
(a) whether the continued registration of the person involves, or may involve, a significant money laundering, financing of terrorism or other serious crime risk; or
(b) one or more breaches by the person of a condition of registration; or
(c) such other matters (if any) as are specified in the AML/CTF Rules under this paragraph.
(2) The AUSTRAC CEO may also cancel the registration of a person if the AUSTRAC CEO has reasonable grounds to believe that the registered person no longer carries on a business that involves providing a digital currency exchange service.
Note: A decision to cancel a registration is reviewable (see Part 17A).
(3) The cancellation of the registration of a person takes effect on the day specified in the notice given to the person under subsection 233C(1).
(4) The AUSTRAC CEO may publish, in the manner specified in the AML/CTF Rules, a list of the names of persons whose registration has been cancelled and the date the cancellation takes effect.
76K Suspension of registration
(1) The AML/CTF Rules may make provision for and in relation to the suspension of registrations by the AUSTRAC CEO under this Part.
(2) The AML/CTF Rules may provide for matters including, but not limited to, the following:
(a) the grounds for suspension of registration;
(b) the effect of suspension on registration;
(c) the period for which suspensions have effect;
(d) making entries in and removing entries from the Digital Currency Exchange Register in relation to suspension;
(e) notices of suspension;
(f) review of decisions relating to suspension.
76L Renewal of registration
(1) The AML/CTF Rules may make provision for and in relation to the renewal of registrations by the AUSTRAC CEO under this Part.
(2) The AML/CTF Rules may provide for matters including, but not limited to, the following:
(a) the making of applications for renewal;
(b) the period within which applications for renewal may be made;
(c) the criteria for determining applications for renewal;
(d) entries in the Digital Currency Exchange Register in relation to renewal;
(e) the giving of notices relating to decisions on applications for renewal;
(f) review of decisions relating to applications for renewal;
(g) the period for which renewed registrations have effect.
(3) In particular, the AML/CTF Rules may provide that:
(a) if the registration of a person would otherwise cease at the end of the period of 3 years commencing on the day on which the registration took effect; and
(b) before the end of that period, an application for renewal of the registration was made to the AUSTRAC CEO within the period, and in the manner provided for, in the AML/CTF Rules;
the registration of the person continues in effect after the end of that period in accordance with the Rules.
76M Removal of entries from the Digital Currency Exchange Register
Removal on request
(1) A person who is a registered digital currency exchange provider may request the AUSTRAC CEO, in writing, to remove the entry relating to the registration of the person from the Digital Currency Exchange Register.
(2) If a person makes a request under subsection (1), the AUSTRAC CEO must remove the entry from the Digital Currency Exchange Register.
Removal on cessation of registration
(3) If the registration of a person ceases under another provision of this Part, the AUSTRAC CEO must remove the entry relating to the registration from the Digital Currency Exchange Register.
Notice of removal
(4) The AUSTRAC CEO must, as soon as reasonably practicable, notify a person, in writing, if the AUSTRAC CEO has acted under subsection (3) in relation to the person (unless the person has died or, in the case of a body corporate, ceased to exist).
76N AML/CTF Rules - general provision
If a provision of this Part provides for the AML/CTF Rules to make provision in relation to a matter relating to the registration or proposed registration of a person, the AML/CTF Rules may make different provision in relation to a matter depending on different circumstances.
76P Registered persons to advise of material changes in circumstance etc.
(1) A person who is registered under this Part must advise the AUSTRAC CEO of the following:
(a) any change in circumstances that could materially affect the person's registration;
(b) any matters specified in the AML/CTF Rules for the purposes of this paragraph.
(2) A person who is required by this section to advise the AUSTRAC CEO of a change in circumstances or a matter must do so:
(a) in accordance with the approved form; and
(b) within 14 days of the change in circumstances or the matter arising (however described).
Civil penalty
(3) Subsection (1) is a civil penalty provision.
76Q AUSTRAC CEO may request further information
(1) The AUSTRAC CEO may, in writing, request further information from any person for the purposes of making a decision under this Part.
(2) The AUSTRAC CEO is not required to make a decision under this Part until any information requested under subsection (1) in relation to the decision has been provided.
76R Immunity from suit
An action, suit or proceeding (whether criminal or civil) does not lie against:
(a) the Commonwealth; or
(b) the AUSTRAC CEO; or
(c) a member of the staff of AUSTRAC;
in relation to the publication of the Digital Currency Exchange Register or a list of a kind mentioned in subsection 76J(4).
76S Steps to be taken by AUSTRAC CEO before making certain reviewable decisions
(1) Before making a reviewable decision under section 76E, 76G or 76J in relation to a person, the AUSTRAC CEO must give a written notice to the person containing:
(a) the terms of the proposed decision; and
(b) if the proposed decision is to cancel a registration - the date on which the cancellation is proposed to take effect; and
(c) the reasons for the proposed decision; and
(d) a statement that the person may, within 28 days of the giving of the notice, make a submission under this section in relation to the proposed decision.
(2) The AUSTRAC CEO is not required to give a notice under this section if the AUSTRAC CEO is satisfied that it is inappropriate to do so because of the urgency of the circumstances.
Division 4 - Basis of registration
76T Basis of registration
Registration under this Part is on the basis that:
(a) the registration may cease as mentioned in section 76H; and
(b) the registration may be suspended as mentioned in section 76K; and
(c) the registration may be made subject to conditions as mentioned in section 76G; and
(d) the registration may cease, be suspended or be made subject to conditions by or under later legislation; and
(e) no compensation is payable if the registration ceases, is suspended or made subject to conditions as mentioned in any of the above paragraphs.