Commonwealth Numbered Acts

ANTI-MONEY LAUNDERING AND COUNTER-TERRORISM FINANCING ACT 2006 (NO. 169, 2006) - SECT 98

Preliminary risk assessment

             (1)  If a financial institution (the first financial institution ) has, whether before or after the commencement of this section, entered into a correspondent banking relationship with another financial institution, the first financial institution must carry out regular assessments of the risk the first financial institution may reasonably face that the correspondent banking relationship might (whether inadvertently or otherwise) involve or facilitate:

                     (a)  money laundering; or

                     (b)  financing of terrorism.

Due diligence assessment

             (2)  If a financial institution (the first financial institution ) has, whether before or after the commencement of this section, entered into a correspondent banking relationship with another financial institution, the first financial institution must:

                     (a)  carry out regular assessments of such matters as are specified in the AML/CTF Rules; and

                     (b)  prepare a written record of each assessment as soon as practicable after the completion of the assessment;

if carrying out those assessments are warranted by the risk identified in an assessment carried out by the first financial institution under subsection (1).

Note:          For geographical links, see section 100.

Frequency of assessments

             (3)  The first assessment under subsection (1) must be carried out within:

                     (a)  if the first financial institution enters into the correspondent banking relationship after the commencement of this section--the period:

                              (i)  beginning at the time when the first financial institution enters into the correspondent banking relationship; and

                             (ii)  ending at the end of the period ascertained in accordance with the AML/CTF Rules; or

                     (b)  otherwise--the period:

                              (i)  beginning at the commencement of this section; and

                             (ii)  ending at the end of the period ascertained in accordance with the AML/CTF Rules.

             (4)  The intervals between subsequent assessments must not be longer than the period ascertained in accordance with the AML/CTF Rules.

             (5)  AML/CTF Rules made for the purposes of subparagraph (3)(a)(ii) or (b)(ii) or subsection (4) may provide that, for the purposes of the application of this Act to the first financial institution, the first financial institution is required or permitted to determine the period concerned, so long as the first financial institution has regard to such matters as are specified in the AML/CTF Rules.

             (6)  Subsection (5) does not limit subparagraph (3)(a)(ii) or (b)(ii) or subsection (4).

Civil penalty

             (7)  Subsections (1) and (2) are civil penalty provisions.