Anti-Laundering Requirements

Gee whizz it seems to be getting tough out there in data land.

One of mine called me last night with a garbled message about the bank wanting details of her income in regard to a savings account. Couldn't understand it fully and still don't to a large degree but I do have some appreciation what they were on about now I've seen the email which was forwarded.

It was a request to check the account holders details. The institution states:

"To comply with our local and global legislative requirements and our internal policies, from time to time we need to confirm the details that we have for you. We may request additional details from you in certain circumstances.

We're checking some details with you now to comply with Anti-Money Laundering laws both in Australia and globally."

and is asking for:

"Please check that all your details are correct - those details include, by way of example, your nationality, country of birth, source of income and so on. Please update anything that needs to change. If anything is missing, we'll ask you to provide it."

From what was told this morning I understand details are also required on how the account holder paid for assets. The account receives money as a result of a bequest from a deceased relative and also from a Testamentary Trust.

So damn fortunate I scanned a copy of the deceased relative's Will and Probate for the Testamentary Trust. At least there is an substantiation for the source of the funds. The account holder has access to these and I reminded them of that in case other documentation is requested.

 

I had a lender want to know how a person youngish, managed to get an unencumbered property. Told them an inheritance and they wanted proof. I argued too intrusive but they persisted with their request. Client didn't object and provided copy of will and probate docs

 

AML and CT (anti money laundering / counter terrorism) rules are getting tougher and tougher.
AML/CTF Act | AUSTRAC

Know your customer is the mantra. It allows banks etc to ask much more than they used to.
eg Fred wins $100m on Powerball and the $$$ is EFTd to his account 2 weeks later. The bank may freeze the funds until satisfied of their source and nature....Yeah they are allowed. Austrac can see its from Tatts but the bank may not. Fred may need to demonstrate he won the money. If the bank doesnt freeze it Austrac may detect it as a risk and step in too eg funds from US lottery or prize winnings or Lottoland etc

Fun fact - Large lottery prize winners receive a letter that is recommended by Tatts they hold onto for this very reason. I have a client who reckons its a PITA when moving $$$ around to invest.

Australian Banks can also be impacted by US laws too if the customer has reportable US dealings. The bank may be obliged for the customer to provide information shared with the IRS. FACTA laws...
Automatic Exchange of Foreign Tax Residency Information (CRS and FATCA) | Westpac