06 Jun Guide: Know your investor

Posted at 14:31h in Guide by

Guide: Know your investor

 

In recent times the Australian Commonwealth has taken a number of steps to help prevent money laundering and financing of terrorism, particularly through legislation and supporting rules for identifying persons prior to receiving funds from them, or handling any funds on their behalf.

The rules generally do not apply to direct investment in proprietary companies, however, the rules provide the foundational requirements used in the finance industry for identifying and verifying the identity of an individual, body corporate, or trust.

You should consider whether it is in your interests to conform with the requirements of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth), and Anti-Money Laundering and Counter-Terrorism Financing Rules 2007 (No. 1) (Cth) to identify any unknown prospective investor.

The following is provided as background information only and must not be construed as advice. Prior to making any decisions or taking any action relating to anything contemplated by this Guide, you should obtain legal and financial advice.

 

Summary identification requirements

    1. Individuals should be identified by one or a combination of the following:
      • an original or certified copy of a primary photographic identification document; or
      • both of:
        • an original or certified copy of a primary non-photographic identification document; and
        • an original or certified copy of a secondary identification document; and
      • verify that the document(s) have not expired.
    2. Australian body corporates should be identified by one or a combination of the following:
      • a search of the relevant domestic stock exchange (listed companies only);
      • a public document issued by the relevant company (public companies only);
      • a search of the relevant ASIC database; or
      • a search of the licence or other records of the relevant regulator (for specific circumstances).
    3. Trusts should be identified with the procedure that suits the type of trust and place of registration (if any). However, as a trust is a relationship, not a legal entity, each of the trustees and beneficiaries should be subjected to the identification procedures as outlined above.
    4. For the purposes of the paragraphs above, the following definitions apply:
Defined term Meaning
accredited translator a.    a person currently accredited by the National Accreditation Authority for Translators and Interpreters Ltd. (NAATI) at the level of Professional Translator, or above, to translate from a language other than English into English; or

b.    a person who currently holds an accreditation that is consistent with the standard specified in (1).
primary photographic identification document Any of the following:

a.    a licence or permit issued under a law of a State or Territory or equivalent authority of a foreign country for the purpose of driving a vehicle that contains a photograph of the person in whose name the document is issued;

b.    a passport issued by the Commonwealth;

c.    a passport or a similar document issued for the purpose of international travel, that:

d.    contains a photograph and the signature of the person in whose name the document is issued;

e.    is issued by a foreign government, the United Nations or an agency of the United Nations; and

f.      if it is written in a language that is not understood by the person carrying out the verification ‑ is accompanied by an English translation prepared by an accredited translator.

g.    a card issued under a law of a State or Territory for the purpose of proving the person’s age which contains a photograph of the person in whose name the document is issued.

h.    a national identity card issued for the purpose of identification, that:

i.      contains a photograph and the signature of the person in whose name the document is issued;

j.      is issued by a foreign government, the United Nations or an agency of the United Nations; and

k.    if it is written in a language that is not understood by the person carrying out the verification ‑ is accompanied by an English translation prepared by an accredited translator;

 
primary non‑photographic identification document Any of the following:

a.    a birth certificate or birth extract issued by a State or Territory;

b.    a citizenship certificate issued by the Commonwealth;

c.    a citizenship certificate issued by a foreign government that, if it is written in a language that is not understood by the person carrying out the verification, is accompanied by an English translation prepared by an accredited translator;

d.    a birth certificate issued by a foreign government, the United Nations or an agency of the United Nations that, if it is written in a language that is not understood by the person carrying out the verification, is accompanied by an English translation prepared by an accredited translator;

e.    a concession card, as defined from time to time in the Social Security Act 1991, or an equivalent term which expresses the same concept in relation to concession holders.

 
secondary identification document Any of the following:

a.    A notice that:

i.     was issued to an individual by the Commonwealth, a State or Territory within the preceding twelve months;

ii.     contains the name of the individual and his or her residential address; and

iii.     records the provision of financial benefits to the individual under a law of the Commonwealth, State or Territory (as the case may be);

b.    a notice that:

i.     was issued to an individual by the Australian Taxation Office within the preceding 12 months;

ii.     contains the name of the individual and his or her residential address; and

iii.     records a debt payable to or by the individual by or to (respectively) the Commonwealth under a Commonwealth law relating to taxation;

c.    a notice that:

i.     was issued to an individual by a local government body or utilities provider within the preceding three months;

ii.     contains the name of the individual and his or her residential address; and

iii.     records the provision of services by that local government body or utilities provider to that address or to that person.

d.    In relation to a person under the age of 18, a notice that:

i.     was issued to a person by a school principal within the preceding three months;

ii.     contains the name of the person and his or her residential address; and

iii.     records the period of time that the person attended at the school.
Updated on: 6 June 2019

 

Warning!

If you unexpectedly receive funds in any of your accounts (and particularly by way of international electronic transfer), and are subsequently contacted by a person claiming to be the transferor, or a representative of the transferor, you should contact your solicitor immediately to obtain advice.

Further, it may be prudent that you immediately make arrangements within your organisation, and with your bank or other financial institution, to ensure that the funds are frozen or held in a separate account until the source and purpose of funds are confirmed.



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