ANTI-MONEY LAUNDERING AND COUNTER-TERRORISM FINANCING ACT 2006 - SECT 95 Prohibitions on correspondent banking relationships involving shell banks
ANTI-MONEY LAUNDERING AND COUNTER-TERRORISM FINANCING ACT 2006 - SECT 95
Prohibitions on correspondent banking relationships involving shell banks(1) A financial institution must not enter into a correspondent banking relationship with another person if:
(a) the other person is a shell bank; or
(b) the other person is a financial institution that has a correspondent banking relationship with a shell bank; or
(c) the other person is a financial institution that permits its accounts to be used by a shell bank.
Note: For geographical links, see section 100.
(2) If a financial institution (the first institution ) is in a correspondent banking relationship with another person and the first institution becomes aware that:
(a) the other person is a shell bank; or
(b) the other person is a financial institution that has a correspondent banking relationship with a shell bank; or
(c) the other person is a financial institution that permits its accounts to be used by a shell bank;
the first institution must, within 20 days after becoming so aware or such longer period (if any) as the AUSTRAC CEO allows, do one of the following:
(d) terminate the correspondent banking relationship;
(e) if paragraph (b) applies--request the other financial institution to terminate the correspondent banking relationship mentioned in that paragraph.
Note: For geographical links, see section 100.
(a) the first institution makes a request under paragraph (2)(e) of another financial institution; and
(b) at the end of the period (the first period ) of 20 business days after the request was made, the other financial institution has not complied with the request;
the first institution must terminate its correspondent banking relationship with the other financial institution within 20 days after the end of the first period or such longer period (if any) as the AUSTRAC CEO allows.
Note: For geographical links, see section 100.
Civil penalty
(4) Subsections (1), (2) and (3) are
civil penalty provisions.