Personnel Screening: Your New Section 26F(4) Obligation
Section 26F(4)(d) requires you to "undertake due diligence" on staff and personnel. It is not just a police check.
The Law: Section 26F(4)(d)
Personnel Due Diligence
Your AML/CTF policies must include procedures to "undertake due diligence" on employees and other personnel involved in compliance functions. This is a mandatory component of your Risk Assessment and Compliance Procedures (s 26F(2)).
What This Means in Practice
This is a risk-based check on staff in compliance roles, not just a standard police check. The level of due diligence should be proportionate to the role and the risk it presents.
Key Elements to Consider
- Background verification appropriate to the role and risk level
- Reference checks for compliance-related positions
- Ongoing monitoring of personnel with access to sensitive information
- Documentation of your screening process and outcomes
Who Needs to Be Screened?
Personnel due diligence applies to those involved in AML/CTF compliance functions, including:
- The AML/CTF Compliance Officer
- Staff conducting customer due diligence
- Staff involved in transaction monitoring
- Personnel with access to compliance records
- Anyone making decisions about suspicious matter reporting
Sole Practitioners
If you are a sole practitioner with no employees, the personnel due diligence requirement still applies to you. You should document your own suitability for the Compliance Officer role, including your qualifications, experience and any relevant checks you have undergone.
Key Takeaway
Section 26F(4)(d) requires risk-based due diligence on staff in compliance roles. This is not optional. HeadStart Docs™ includes a Personnel Screening Policy in all AML/CTF program documents to help you meet this obligation.
Read our complete Tranche 2 Guide
Key dates, affected sectors, obligations and how to prepare
Disclaimer: This article is general information only. It is not legal, financial or compliance advice. HeadStart Docs™ provides free compliance documents, not legal services.
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