What is the consequence if an agent fails to verify the identity of a client as required under AML/CTF legislation?
Correct Answer
B) Civil penalty proceedings and other AUSTRAC enforcement, including large fines
Failing to carry out required customer identification is a breach of the AML/CTF Act, a federal law enforced by AUSTRAC. AUSTRAC can seek civil penalties in the Federal Court, with very large maximums, and can also use infringement notices, enforceable undertakings and remedial directions.
Why This Is the Correct Answer
Customer due diligence obligations under the AML/CTF Act are civil penalty provisions enforced by AUSTRAC. A failure to verify identity can lead to civil penalty proceedings and other enforcement action such as infringement notices, enforceable undertakings and remedial directions.
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