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Student loans alert
- By Alan Fotheringham
- Published 27/02/2009
- Risk Watch
- Unrated
Recently some higher education providers have received advice from the Australian Transaction Reports and Analysis Centre (AUSTRAC) that their activities are subject to the provisions of the Anti-Money Laundering / Counter-Terrorism Financing (AML/CTF) Act 2006 (the Act).
Why is AUSTRAC interested?
AML/CTF legislation specifically applies to organisations that 'carry on a loans business'. Higher education providers that extend loans to students can; therefore, be said to be directly caught under the provisions of the Act. The legislation does not provide automatic exemptions for learning institutions or not-for-profit organisations generally, nor does it specifically exclude 'low value loans'. Subject to the terms of the loans, there may be grounds for special exemption on the basis that student financial assistance activities are 'low risk'.
Although the legislation has been in place for some time, it includes significant transitional provisions. We are only now moving beyond the “non prosecution period” for the first ('Part A') set of requirements. Part B is just coming into effect.
If your institution does offer financial assistance to students, those responsible for managing the scheme may have already taken steps to implement a full set of AML/CTF compliant policies and procedures. If so, you may wish to consider asking us to undertake a 'quick health check' of their operations to ensure that you are not exposed to any penalties under the legislation. Given AUSTRAC’s timetable, please forward this note to those directly involved as quickly as possible.
If you do not have policies and procedures in place, we strongly recommend that you ensure that the relevant official(s):
• Apply to AUSTRAC for special exemption from the provisions of the Act; or
• Implement a formal AML/CTF compliance program without delay.
Both of these options carry with them costs and benefits.
Our Risk Management Division has considerable expertise in all facets of the legislation. We can assist you and / or your colleagues and staff to weigh up your alternatives to achieve the best outcome in the long-term.
If you, or other relevant University officials, have any queries about AML/CTF legislation, please contact Alan Fotheringham, Associate Director, on telephone 8635 1865.
Why is AUSTRAC interested?
AML/CTF legislation specifically applies to organisations that 'carry on a loans business'. Higher education providers that extend loans to students can; therefore, be said to be directly caught under the provisions of the Act. The legislation does not provide automatic exemptions for learning institutions or not-for-profit organisations generally, nor does it specifically exclude 'low value loans'. Subject to the terms of the loans, there may be grounds for special exemption on the basis that student financial assistance activities are 'low risk'.
Although the legislation has been in place for some time, it includes significant transitional provisions. We are only now moving beyond the “non prosecution period” for the first ('Part A') set of requirements. Part B is just coming into effect.
If your institution does offer financial assistance to students, those responsible for managing the scheme may have already taken steps to implement a full set of AML/CTF compliant policies and procedures. If so, you may wish to consider asking us to undertake a 'quick health check' of their operations to ensure that you are not exposed to any penalties under the legislation. Given AUSTRAC’s timetable, please forward this note to those directly involved as quickly as possible.
If you do not have policies and procedures in place, we strongly recommend that you ensure that the relevant official(s):
• Apply to AUSTRAC for special exemption from the provisions of the Act; or
• Implement a formal AML/CTF compliance program without delay.
Both of these options carry with them costs and benefits.
Our Risk Management Division has considerable expertise in all facets of the legislation. We can assist you and / or your colleagues and staff to weigh up your alternatives to achieve the best outcome in the long-term.
If you, or other relevant University officials, have any queries about AML/CTF legislation, please contact Alan Fotheringham, Associate Director, on telephone 8635 1865.
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