The AML CFT Act empowers regulatory supervisors to issue Codes of Practice (Codes). The Codes provide transparency and certainty of compliance requirements.  Some codes will cover all sectors, while others will be applicable to specific sectors or sub-sectors.

SAFE HARBOUR

Reporting entities who adopt practices as set out in the codes will place themselves in a position of 'safe harbour' from regulatory action (section 67(1)(a)).


ALTERNATIVE APPROACH

If reporting entites have an alernative but "equally effective" means of compliance, they may rely on section 67(1)(b) to adopt that practice. Before s.67(1)(b) can be used as a defence to a regulatory action, the reporting entity must have provided their supervisor notice in writing of their intention to adopt out of the Code. The written notice must have been provided before the regulatory breach occurred (s.67(2)).