Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF)

Created OnJanuary 15, 2021

Last Updated OnDecember 6, 2021

AUSTRAC is Australia’s financial intelligence agency and AML/CTF regulator. They work in partnership with industries and government to help reduce the risk of criminal activity. Clubs with gaming have an important role to help protect the community. The information that clubs provide to AUSTRAC helps stop money laundering, illegal drugs, fraud and many other crimes.

Clubs must comply with their AML/CTF Obligations which help identify, mitigate and manage the risks they face. Understanding these risks and putting in place effective controls will help protect your club from potential criminal abuse and avoid harsh penalties for non-compliance.

To assist Clubs, CCV in conjunction with GovLaw have produced the ‘Clubs Assistance Pack’. A comprehensive guide, covering gaming management, staff training, a knowledge quiz and recommended staff meeting schedule to ensure that your program is maintained as a ‘best practice’ system in your venue.

Clubs Assistance Pack – AML/CTF Compliance

Key Obligations for Clubs

The below does not cover all obligations, the best way to ensure you are meeting your obligations is by reading the AUSTRAC guide for pubs and clubs with gaming machines on how to develop and implement an AML/CTF program.

You must enrol with AUSTRAC within 28 days of when you start providing gaming machines services.

If you are not enrolled, you can Enrol Here.

Any changes to your club can be updated through AUSTRAC Online by opening the AUSTRAC Business Profile Form via the Business Profile page under the My Business tab. Update your club’s details and click Submit.

If your venue is licensed for 16 or more EGMs (regardless of how many attached entitlements you have), you must adopt and maintain an AML/CTF program. You do not have to have an AML/CTF program in place if you are licensed for 15 or fewer EGMs.
Regardless of how many EGMs you have you must enrol your business, report suspicious matters, and keep transaction records.

Your program MUST be approved & minuted by the Board / Committee.

Your program must also undergo an independent review (i.e. by a qualified person/organisation without a vested interest) every 2 years. See CCV’s Provider Directory for a list of AML/CTF Review providers.

It is often frontline staff in clubs who will be carrying out identification and monitoring of patrons, or will be best placed to notice suspicious or unusual behaviour. Staff training is therefore a key part of meeting AML/CTF obligations.

Your employees should be trained in:

your business’ obligations and the consequences of not complying
the types of risks your club might face
AML/CTF processes and procedures that are relevant to their work, such as how to notify the Compliance Officer if they see something suspicious.

To assist clubs train staff, CCV has incorporated a staff training quiz into the ‘Clubs Assistance Pack’. Doing this quiz alone would not be considered meeting your staff training obligations, but rather provides support in your staff training.

You need to have a transaction monitoring program to identify any transactions that may be suspicious and need to be reported to AUSTRAC. This includes complex transactions, unusual large transactions or unusual patterns of transactions. What is considered complex, unusually large, or an unusual pattern will depend on your club and your customers – You need to define what is an unusual transaction for your club.

The AUSTRAC industry guide includes some examples and processes you could put in place to monitor gameplay and transactions in your venue. One method you could consider is to create a digital cheque register for your business using software like Excel or Google Sheets. This will allow you to record cheques issued to customers and more easily identify patterns or unusual activity.

Record Keeping

You must keep records of customer identification, transactions and your AML/CTF program.

Most records must be kept for 7 years.

Compliance Officer

You MUST have a Board / Committee appointed & minuted Compliance Officer.
This is often the Gaming Manager, General Manager, Operations Manager or Bar Manager depending on scope and scale of your club (e.g. the GM role is appointed, not “Fred”). However the individual’s name (e.g. “Fred”) needs to stay updated with AUSTRAC. If the individual in the role changes, you need to update their details through AUSTRAC Online within 14 days of the change occurring.

The club’s Board/Committee are personally liable to ensure AML/CTF compliance is met. It is the Compliance Officer’s role to implement and maintain the club’s AML/CTF program – ensuring ongoing documentation, risk assessment & controls are in place – keeping directors across necessary information, but it is the board’s responsibility.

AUSTRAC Annual Compliance Report

If you are licensed for 16 or more EGMs, you must submit an annual compliance report to AUSTRAC. This report is to let AUSTRAC know if you are meeting your obligations and assist in assessing industry standards. AUSTRAC will let you know when the report is due each year so make sure your club’s contact email address is up to date through AUSTRAC Online via the Business Profile page under the My Business tab.

What is a Compliance Report?

This is your club’s self-assessment of your anti-money laundering and counter-terrorism financing (AML/CTF) compliance.

How will this info be used?

AUSTRAC will use the information you provide primarily for diagnostic purposes to gauge what further training needs to be provided to your club, namely by:

measuring your compliance
analysing risks across different industries
improving education and guidance to clubs and the gambling industry

Filling out the Report

While the language used in the online Compliance Report is not club specific, there are aids to help explain the terminology used alongside the questions. As you fill out the report, the sections that do not apply to clubs should filter out (for example, clubs are not typically providers of services such as Western Union or payroll services). Take some time to familiarise yourself with the questions. If something is still unclear, feel free to get in touch with the AUSTRAC Contact Centre 1300 021 037.

If we don’t lodge the report?

The penalty for not lodging the Compliance Report is up to $21m. Although ‘compliance reporting’ sounds innocuous, clubs also need to be aware that depending on how they answer the questions, compliance or enforcement action may be taken against them.

Do you know who your club’s Compliance Officer is?

This person (e.g. club manager, gaming manger, etc.) is responsible to ensure the club’s AML/CTF compliance. If this person has changed, it’s very important that a new person at the club is appointed and their details are updated with AUSTRAC.

Audit Preparation

It is also prudent to prepare for an audit visit. If AUSTRAC authorised officers visited your club with a monitoring warrant – would you have adequate documentation to back up your claims on the Compliance Report?

Clubs with gaming must collect and verify the identity of customers who are paid out prize winnings of $10,000 or more, (Victorian gaming legislation requires ID produced to pay out at $2,000 so clubs meet this obligation by default, which can be noted in your AML/CTF program), or where a customer is defined by you as high-risk or you have formed a suspicion.

The minimum mandatory information you must collect for an individual:

Full name
Residential address; and
Date of birth (Tip: add this to your sign-in registry)

The information collected must be verified using reliable and independent sources (e.g. Driver’s License, Passport, etc.) You must be satisfied that an individual is who they claim to be. Also be conscious of any potential politically exposed persons (PEPs) (e.g. high profile person – such as an MP converting a bribe into gaming winnings).

You must also keep records of all customer identification & PEP checks you perform. Luckily as a club you already collect the above bulleted information at a minimum to comply with club liquor and gaming licensing in your sign-in registries (retain a copy for 7 years). For anyone you define as high-risk to your club (e.g. receiving $10k+ winnings, foreign, PEP, etc.), they should be checked in the Namescan database. (Tip: screenshot the PEP Check search results and save to a folder on your computer.)

Suspicious matter reports (SMR)

One of the most important obligations your club has is to let AUSTRAC know when you see something suspicious. A suspicious matter can relate to any crime, not just money laundering or terrorism financing. An SMR must be reported to AUSTRAC if you form a suspicion, even if you do not end up providing a gaming service to the customer – for example where the customer makes an enquiry or you propose to provide the service. This is important as it allows AUSTRAC to investigate further as well as law enforcement. SMRs must be submitted to AUSTRAC within 24 hours of forming a suspicion related to terrorism financing, and 3 business days if the suspicion relates to any other matter.

Remember: you must never let a customer know or imply that you will submit an SMR (this is known as ‘tipping off’).

AML/CTF compliance report

If you are licensed for 16 or more EGMs, you must submit an annual compliance report to AUSTRAC. This report is to let AUSTRAC know if you are meeting your obligations and assist in assessing industry standards. AUSTRAC will let you know when the report is due so make sure your club’s contact email address is up to date.

Further AUSTRAC information & Resources

See the Industry specific guidance page on the AUSTRAC website for more detailed information about how to meet each all your obligations.

You can also email AUSTRAC at [email protected] or phone 1300 021 037 or contact GovLaw AML/CTF Compliance Law Firm.

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