Legislation to enlist real estate agents in War on Terror

Legislation to enlist real estate agents in War on Terror

Summary: Vendors and privacy advocates alike have expressed their reservations over the Anti-Money Laundering and Counter Terrorist Finance Act enacted by Parliament last year, but it appears unlikely that the Labor government will review the legislation.

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Vendors and privacy advocates alike have expressed their reservations over the Anti-Money Laundering and Counter Terrorist Finance Act enacted by Parliament last year, but it appears unlikely that the Labor government will review the legislation.

"There's a discrepancy between what the legislation requires and its practicality," said Carey Anderson, Director of Global Data Company (GDC), a specialist AML/CTF and Know Your Customer (KYC) compliance firm.

AML/CTF legislation serves as an extension of the Financial Transaction Reports Act (1988) and is considered as a hybrid counter-terrorist and anti-fraud measure, and obligates businesses to comply with KYC measures for all transactions as well as extending existing suspicious transaction reporting requirements to SMEs.

The AML/CTF Act was drafted for two phases of enactment; the first phase becomes effective as of 12 December this year. It requires banks, credit unions, lenders and brokers to comply with identity verification measures stipulated under the KYC component of the Act.

The second phase -- effective as of next year -- will require accountants, real estate agents, jewellers and a number of other small business providers to comply with the legislation.

Anderson said that some larger financial institutions and major banks are having difficulty coming to terms with a number of the its requirements.

"There's a lot of confusion in the marketplace about the legislation itself," he said.

He went on to express his concern over the second phase requiring small businesses to comply with the legislation next year, and suggested that if major banks were having problems with it then the burden for small business will be even greater.

"There's nowhere near the resources they'll need," he said, "they're going to have great difficulty complying without certain support."

According to Anderson one of the major problems vendors have had so far with the legislation is that some pieces of information needed to comply with KYC requirements -- such as an individual's date of birth -- are protected by the privacy act.

"The fact that so little is known about this legislation is one of my major concerns," said Roger Clarke, chair of the Australian Privacy Foundation (APF).

"The Financial Transactions Reports act was implemented donkeys years ago and has had almost no success."

Clarke said that the new legislation has effectively co-opted business -- from major banks to local professionals -- to intrude on the individual's right to privacy under the guise of counter-terrorism measures.

"Banks and other businesses are now required to be actively suspicious of their own customers rather than just providing a service," he said.

"I never thought something like this would happen in Australia, perhaps in the former East Germany."

GDCs Anderson believes that the change of government over the weekend will do little to change the nature or the timeframe set for the enactment of the legislation.

"I don't think with the amount of work that has gone into it so far that Labor is going to change anything much, they may open the process up to a little more flexibility, but I can't see them rolling back the legislation," he said.

Topics: Government, Banking, Big Data, Government AU, Privacy, Security, IT Employment

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  • Legislation to enlist real estate agents in War on Terror

    I personally believe that banks need to scrutinize both their new and existing customer base more than ever before.

    As the current identification procedures that exist in most banks today are still poor and antiquated, most of which rely on relatively static data sources, of which are prone to abuse. Not to mention the reluctance of generation y’s to update their identity particulars.

    I am all for further enhancement of the customer identification processes, it will protect my family, me and my money.
    anonymous