Major reforms to Australia’s anti-money laundering and counterterrorism financing (AML/CTF) regime come into effect Tuesday, imposing new rules on regulated businesses before they spread to accountants, lawyers, and precious gem dealers.
Businesses moving, storing, and processing large volumes of cash face new reporting obligations, designed to cut down on financial crime costing the community $82 billion each year.
eforms to the Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024 are designed to strengthen, simplify, and expand the federal government’s regulatory toolkit.
The changes, widely billed as the most significant since the Act was passed in 2006, include new requirements around money laundering and terrorism financing risk assessments.
This includes changes to customer due diligence (CDD) requirements, both before providing any designated services and once a customer is on board.
Businesses overseen by federal watchdog AUSTRAC must establish AML/CTF policies to identify and mitigate any identified risks, in line with their obligations.
Senior management at those organisations will need to take a more active role in spotting and handling those risks, with regulated businesses facing an explicit requirement to inform AUSTRAC of their designated AML/CTF compliance officer by May 30, 2026.
When tipping off AUSTRAC about suspicious transactions and transactions above a certain threshold, regulated businesses will need to include more details than before.
And there are bolstered rules for businesses involved with international transfers, and the information they must collect, verify and pass on regarding major transactions.
Which businesses are covered?
The reforms cover the approximately 19,000 businesses already regulated by AUSTRAC, which are classified as tranche 1 businesses.
A non-exhaustive list includes:
traditional banks,
pubs and clubs offering gambling services,
casinos,
bookmakers,
super funds,
and remittance network providers.
Cryptocurrency exchanges and other virtual asset service providers are set to come under those rules on March 31, but their obligations are deferred until July 1.
Even more businesses — some 90,000 in total — will face AML/CTF obligations from July 1.
Specifically, businesses providing services designated as high risk for exploitation will face those compliance rules.
These tranche 2 entities include:
real estate agents,
property developers,
conveyancers
precious metal and jewel dealers,
lawyers,
accountants
trust and company service providers.
Many businesses in those sectors, including small businesses without dedicated AML/CTF compliance personnel, will face AUSTRAC obligations for the first time.
Tranche 2 businesses providing services designated under the AML/CTF rules can enrol with AUSTRAC before the July 1 deadline.
And those tranche 2 businesses can extend the deadline for the first independent evaluation of their AML/CTF policies, giving those entities even more time to get it right.
The first deadline will come due on July 1, 2029, with further deadlines spread at six-month intervals.
AUSTRAC is also providing tailored starter kits to help those tranche 2 businesses get a head start.
Will AUSTRAC crack down on businesses?
Given the scale of those reforms, AUSTRAC says it will not savage businesses genuinely trying to meet their new obligations.
“We’ll take a pragmatic and proportionate approach to new regulation,” an AUSTRAC spokesperson said, in a statement shared on Monday.
“However, if risks aren’t properly managed or obligations aren’t met, we may step in and take regulatory action.”
AUSTRAC has released transitional guidelines to help businesses adhere to the reforms.
Businesses will have until March 30, 2029, to move to a new initial CDD framework (but refreshed ongoing CDD obligations kick in from March 31, 2026).
Tranche 1 reporting entities must let AUSTRAC know if their internal compliance officer changes by May 30, with Tranche 2 entities having until July 29.
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