Item 7: when the role is a designated service
AUSTRAC explains that item 7 does not capture an ordinary agent performing only administrative or procedural steps. The statutory service applies where a person acts as trustee, partner, director or secretary for another person, or arranges or prepares for another person to act in that role, and the nominator retains control over fulfilment of the role. The designated service is not the job title; it is the combination of the role, the nominator's control and the steps that directly advance the arrangement.
For a trustee, the nominator's wishes and instructions govern the role. For a director, the same control test applies. A tax agent who merely recommends a director or prepares documents for a client to sign is not automatically acting as the director; an agent who takes the appointment and acts on the client's wishes may be.
Item 8: nominee shareholding
Item 8 applies where a person holds shares or an interest in a body corporate or legal arrangement on another person's behalf and either exercises the associated voting rights according to that person's instructions or receives dividends or distributions on their behalf. Arranging or preparing for another person to hold shares that way can also be captured.
The control test matters. Holding shares as a bare nominee with no voting discretion and passing dividends through can still be item 8 where the statutory elements are met. Identify the nominator and the ultimate person on whose behalf the interest is held, and record the role, the instructions and the flow of dividends.
CDD for the roles
The nominator relationship is not a substitute for CDD. A nominee or acting-director arrangement often exists precisely to separate legal control from economic ownership, which is why AUSTRAC guidance treats these roles as higher-risk contexts rather than automatic high-risk ratings.
- Identify the nominator and verify their identity
- Identify the person on whose behalf the role is performed
- For entity customers, map the beneficial owners and controllers
- Screen for PEPs, sanctions and adverse media
- Record why the role is or is not a designated service on the file
Risk and reporting
A trustee or nominee role can be a legitimate service - or a mechanism for obscuring control. The file should show the same discipline as any designated service: a scope decision, a customer, evidence, a risk rating and a monitoring plan.
- Assess the ML/TF/PF risk of the role, the nominator and the underlying entity
- Apply enhanced due diligence where the statutory triggers or risk assessment require it
- Monitor instructions, distributions and ownership changes
- Report suspicious activity and protect SMR-related information
Official sources
Use these primary AUSTRAC pages to confirm the current rules and apply them to your circumstances.
Frequently asked questions
Is every acting-director arrangement item 7?
No. Item 7 applies where the statutory elements are met, including the nominator retaining control over fulfilment of the role. Ordinary administrative or procedural agency work is not captured.
Does holding shares for a client always trigger item 8?
Only where the holder exercises voting rights according to the other person's instructions or receives dividends on their behalf, or arranges for someone else to do so. Record the actual arrangements.
Who is the customer for a nominee role?
Identify the nominator and the person on whose behalf the service is received, then apply the customer-type rules. For entities, map the beneficial owners and controllers.
Are trustee and nominee roles automatically high risk?
No. They are contexts that require careful analysis. The risk rating follows the assessment of the customer, the structure, the jurisdiction and the transaction, not the label.
Put it into practice
Cassandra AML turns these obligations into a working system: designated-service decisions, customer due diligence, screening, monitoring and reporting records — hosted in Sydney, free to start.
This guide is general information for Australian professionals. It is not legal advice and does not replace the AML/CTF Act, the AML/CTF Rules or AUSTRAC guidance. Confirm your specific obligations with AUSTRAC or a qualified legal adviser. See our editorial and correction standards.