IN THE MATTER OF:

INTRODUCTION

• This submission is made in opposition to the AML/CFT Amendment Bill.
• The Bill expands compliance obligations for businesses, increases regulatory oversight, and introduces privacy risks without sufficient safeguards.
• It imposes additional costs on businesses, particularly SMEs, and lacks a clear transition period for implementation.
• Given these concerns, I urge that the Bill be revised to ensure proportionality, fairness, and transparency.

GROUNDS FOR OPPOSITION

1. Increased Regulatory Burden on Businesses (Sections 5, 6, 56, 58, 78)

• More stringent customer due diligence requirements increase operational costs (Sections 6, 14, 18, 22, 24).
• The requirement for businesses without employees to appoint an AML/CFT compliance officer is impractical (Section 56).
• Additional reporting requirements related to stored value instruments could disproportionately affect legitimate businesses (Sections 67B, 68, 69).
• Recommendation: Exempt SMEs from unnecessary compliance requirements.

2. Ambiguities in Definitions and Compliance Requirements (Sections 5, 6, 14, 18, 22, 67B)

• Unclear definitions of "beneficial owner" and "trust and company service provider" may lead to legal uncertainty.
• The Bill lacks clear implementation guidelines, increasing regulatory confusion.
• Recommendation: Clarify definitions to ensure consistent enforcement.

3. Overreach in Enforcement and Supervisory Powers (Sections 80, 90A, 132)

• The replacement of "formal warnings" with "censures" could harm reputations without sufficient oversight (Section 80).
• Pecuniary penalties will be used to fund enforcement, creating a financial incentive for aggressive penalties (Section 90A).
• Supervisory powers are expanded to conduct inquiries on behalf of foreign regulators (Section 132).
• Recommendation: Introduce independent oversight of enforcement decisions.

4. Privacy and Data Protection Concerns (Section 137)

• The Bill weakens privacy protections by expanding data-sharing between agencies.
• Financial data could be shared without proper safeguards.
• Recommendation: Strengthen privacy protections to prevent misuse of financial data.

5. Disproportionate Impact on Cash and Stored Value Instruments (Sections 67B, 68, 69, 70, 71)

• New restrictions on gold, silver, vouchers, and casino chips may disrupt legitimate businesses.
• International transactions could face unintended complications.
• Recommendation: Ensure proportionality in stored value instrument regulations.

6. Lack of Transitional Provisions and Implementation Uncertainty (Section 2)

• The Bill takes effect immediately upon Royal Assent, leaving businesses no time to adjust.
• Recommendation: Implement a phased transition to allow proper adaptation.

CONCLUSION

• The Bill imposes heavy regulatory burdens without sufficient safeguards.
• It weakens privacy protections, expands supervisory powers, and risks overregulation.
• Significant amendments are needed to balance financial security with business rights.

RELIEF SOUGHT

• That the Committee recommend withdrawing or substantially revising the Bill.
• That the Bill be amended to:
  • Reduce compliance burdens on small businesses.
  • Introduce independent oversight for enforcement actions.
  • Strengthen privacy protections and restrict data sharing.
  • Ensure a reasonable transition period for affected entities.