The Australian Transaction Reports and Analysis Centre (AUSTRAC) has been taken to task for how loosely it has sought to identify politicians, senior public servants and senior members of the military for the purposes of superannuation funds undertaking customer due diligence.
The Association of Superannuation Funds of Australia (ASFA) has used a submission on AUSTRAC's draft Anti-Money Laundering/Counter Terrorism rules relating to customer due diligence to warn that some key definitions including those for politicians, senior public servants and high ranking military offices need to be clarified.
The submission goes so far as to tell AUSTRAC that it needs to clarify whether its descriptor "government ministers" includes both Federal and State government ministers, while cautioning that this could significantly increase the workload of one particular superannuation fund.
"In sub-paragraph 1(b) of the definition of politically exposed person, does ‘government ministers' refer to State as well as Commonwealth ministers?" the submission asks. "ASFA considers that this should be clarified. Assuming this is the case, some of our members have advised that this alone would represent a much larger population of PEP members than would otherwise be captured under the old definition (one fund has advised that in their case this would be at least 100 extra PEPs). This would require significant changes to funds' enrolment/on-boarding processes."
The submission similarly points to difficulties with respect to public servants, stating that "in sub-paragraph 1(c), it is unclear what exactly constitutes a ‘senior' government official. In particular, it is not apparent how ‘prominent' they must be or whether this includes senior public servants. Guidance will be necessary as to how to determine who is sufficiently senior or prominent to be included".
The submission also warns that superannuation funds are not equipped to identify "politically exposed" people and that requiring them to do so would require complex changes to their information-collecting capabilities.
