The 2006 Compliance Standard - AS 3806-2006

Compliance is the act of adhering to, and demonstrating adherence to, relevant laws, standards and regulations. If compliance is well organised and aligned with business strategy it can provide significant value to the overall business.

Standards Australia issued the new standard for compliance programs in March 2006. It is a significant reworking of the previous standard AS 3806-1998. The 2006 Standard moves away from the rather aspirational and largely immeasurable, 1998 Standard to one which is both helpful to an organisation in outlining what a compliance program should look like, and encourages benchmarking against the Standard.

How Corporate Regulators View the Standard

Corporate regulators have strong corporate compliance and consumer protection requirements. These requirements are placed upon any organisation which falls under their respective regulatory regime. The regulators are: ASIC, APRA, ACCC, ATO, and the Privacy Commissioner. Each regulator will have regard to the 2006 Standard when investigating whether or not an organisation regulated by it has a robust and effective compliance system.

As an example, for organisations which are regulated by ASIC: all holders of Australian Financial Services Licences are required to conduct regular reviews of their compliance systems against industry standards, namely, AS3806-2006. Failure to carry out regular compliance reviews will result in the licence holder being in breach of its licence obligations and the Sect 912A of the Corporations Act 2001.

ASIC explicitly states in Policy Statement 164 (Licensing: Organisational capacities) that "in deciding whether a specific licensee’s compliance measures, process and procedures are adequate, the licensee may whish to refer to Australian Standard on Compliance Programs. the Standard is a useful benchmark that we expect licensees to use as a guide in planning and implementing compliance measures, processes and procedures." [PS164.54]

In relation to reviewing compliance arrangements ASIC "anticipates that a licensee will ensure that its measures, processes and procedures are reviewed when its obligations, business, or the environment in which it operates changes" [PS164.49] and "in some cases, it may be sensible for licensees to consider external review of the compliance measures." [PS164.50]

The 2006 Standard will also prove useful for both Courts and Regulators undertaking investigations into organisation’s compliance activities.

Our Compliance Standard Services

SSAMM has extensive experience in advising clients on AS 3806-1998 and more recently AS3806-2006.

Advice on Compliance Standard AS 3806-2006

Our consultants have a unique blend of legal and consulting skills to help clients understand the Standard, and where it lies both within the client organisation and the legal and regulatory framework.

SSAMM will facilitate workshops which will identify the key money laundering risk criteria: country risk; customer risk; service risk and apply them to the organisation or business unit. Situations which need enhanced controls will be identified and those controls designed. SSAMM will also deliver training programs.

AML/CTF Audits

Every AML/CTF program should be reviewed periodically, and at least annually, to ensure that it is working effectively and that it is focussing on the current money laundering risks. Remember that money launders will target organisations with real or perceived weaknesses in their AML/CTF programs. Organisations will also be required to report to AUSTRAC on its compliance with the legislation.

SSAMM will undertake an audit of your AML/CTF program to test for weaknesses and currency.

Compliance Standard Review – Gap Analysis

SSAMM will be able to carry out a Compliance Standard Review. This will consist of a Compliance Standard Gap Analysis encompassing:
  1. A review of the organisation’s existing compliance framework
  2. A systems & process review
  3. Interviews with key management and compliance personnel
  4. An assessment of where the organisation sits in relation to AS3806-2006
A Compliance Standard Review will enable your organisation to:
  1. Fulfil its licence obligation and comply with the law
  2. Measure its compliance system for effectiveness
  3. Align the organisation's business objectives with compliance
  4. Benchmark the compliance system against the industry standard.
SSAMM carried out one of the first AFSL licensee compliance reviews against the new AS3806-2206.

Conduct your own desktop assessment with our free Online Compliance Standard Review

What does the Standard look like?

The Standard is broken down into four high level tenets of compliance and twelve principles of compliance. These are outlined in the table below. The high level tenets are the basis on which all compliance programs should be based. The principles outline what an organisation should be achieving in order to have an efficient and effective compliance system.

High Level Compliance Description
1. Commitment
  • Commitment to effective compliance
  • Compliance aligned to business strategy
  • Appropriate resources allocated
  • Compliance objectives endorsed by senior management
  • Obligations identified and assessed
    • 2. Implementation
  • Responsibility for outcomes assigned
  • Employees appropriately trained
  • Compliance behaviours advanced
  • Controls
    • 3. Monitoring & Measuring
  • Compliance program monitored
  • Compliance with the program can be evidenced
    • 4. Continual Improvement
  • Compliance program is reviewed and improved


    • SSAMM will work with your organisation to provide detailed planning and realistic timelines for achieving compliance with the obligations.

     

    		 
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