Are you on top of your customer due diligence procedures?

If you have Australian based managed funds, you should already be aware that AUSTRAC introduced new Customer Due Diligence (CDD) requirements in Australia from 1 June 2014.

Made in response to Financial Action Task Force (FATF) recommendations, the requirements address gaps in Australia’s existing anti-money laundering and counter-terrorism financing (AML/CTF) regime. This will bring Australia in line with other FATF member countries, such as Singapore, that have already adopted the requirements.

Australian reporting entities were expected to have a transition plan in place by November 2014 to achieve full compliance by the start of 2016.


Customer due diligence is central to a regime free of anti-money laundering and counter-terrorism financing. Reporting entities need to identify and verify each customer to determine the money laundering and terrorism financing risk they pose, decide whether to proceed with a business relationship or transaction and assess the level of future monitoring required.

Under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act), the broader risks associated with customers need to be considered as well as collation and verification of their identification information, identification of who owns and controls the customers and performance of ongoing customer due diligence and monitoring, including scrutiny of transactions.

These Australian requirements generally mirror global standards agreed by the 36 member Financial Action Task Force, apart from some deficiencies which are now being address through the new requirements. The updated AML/CTF Rules will strengthen Australia’s financial system against money laundering and terrorism financing.

What do I need to do?

New CDD requirements took effect from 1 June 2014 via amendments to seven chapters of the AML/CTF Rules.

Reporting entities are encouraged by AUSTRAC to take ‘reasonable steps’ to implement the reforms during the implementation period of June 2014 to December 2015.

So you should already be considering the amendments, working on updating your AML/CTF policies and working through your transition plan. You will also need to consider the impact of the new CCD requirements on your customer facing documents.

More information

If you have any questions, or are interested in FundBPO undertaking AML/KYC responsibilities for your fund, please contact us.


This article is not intended to be financial advice and is of a general nature only that does not take into account your individual objectives, financial situation or needs. While all efforts have been made to ensure the information contained in this article is accurate, errors may occur.

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