New Anti Money Laundering and Counter Terrorism Financing Laws
Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) have been significantly amended in the new Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024 (Cth) (TheAct).Passed by Parliament on 29 November 2024 and receiving Royal Assent on 10 December 2024, this legislation marks the most substantial reform to the AML/CTF regime since its inception.
The Act refers to designated services, which will trigger AML/CTF obligations for these businesses1. This includes services provided by:
- real estate professionals;
- dealers in precious metals and precious stones; and
- professional service providers such as lawyers, conveyancers, accountants, and trust and company service providers.
(Designated Service Providers)
This article focuses on the key changes introduced by The Act, the effect these changes may have on Designated Service Providers and practical guidance on maintaining compliance.
HISTORICAL CONTEXT
The original Anti-Money Laundering and Counter-Terrorism Financing Act, established in 2006 created the framework for detecting, deterring,and disrupting money laundering and terrorism financing. The original act focused almost entirely on ”tranche one” entities being banks, casinos and various financial service providers.
In2016, a statutory review of the AML/CTF laws at the time conducted by the financial action task force, found that the current laws failed to sufficiently protect against “tranche two” entities, being the Designated Service Providers who provide designated services. The Act was introduced to remedy this deficiency.
KEY OBLIGATIONS
The Act establishes positive obligations that Designated Service Providers must comply with, these obligations include:
- registering with the Australian Transaction Reports and Analysis Centre (AUSTRAC) by 29 July 2026;
- develop and maintain an AML/CTF program tailored to their practice;
- conduct initial customer due diligence;
- conduct ongoing customer due diligence;
- report certain transactions and suspicious activities; and
- make and keep records.
1. Anti-Money Laundering and Counter-Terrorism Financing Act 2006s 6(5B), table 6
(KeyObligations)
The Key Obligations commence on 1 July 2026.
AUSTRAC
Designated Service Providers can enroll with AUSTRAC from 31 March 2026. Information that is required is:
- expanded or amended designated services;
- beneficial owners of your business;
- details of your AML/CTF compliance officer;
- updated organisational profile information; and
- reporting group details.
Designated Service Provides can enroll and find more information regarding enrollment at the following link:
Enrol with us | AUSTRAC
AML/CTFProgramDesignated Services Providers must have an AML/CTF program in place by 1 July2026 for tranche two entities.If you are a tranche one entity, your program must be updated by 31March 2026. The general obligations of the AML/CTF Program include:
- establishing a governance framework;
- conducting a risk assessment;
- developing policies;
- document and approve the program;
- comply with program;
- review and update program; and
- independent evaluation.
AUSTRAC has released a guide to compliance with each of the above steps, this guide has been reproduced in Annexure A below.
DueDiligence
The customer due diligence (CDD)obligations have been separated into the following categories, with a guide for each category as identified below:
With enhanced protections for politically exposed persons and persons designated for targeted financial sanctions.
AUSTRAC
The Act establishes several reporting obligations that Designated Service Providers must follow, these include:
- Suspicious matter reports (SMR) for suspicions including identity concerns or information relevant to criminal activity;
- Threshold transaction reports (TTR) for transactions involving physical currency ≥ AUD 10,000;
- International funds transfer reports (IFTI) for instructions to transfer funds into/out of Australia;
- Cross-border movement reports (CBM) where physical currency/monetary instruments ≥ AUD 10,000 move into/out of Australia; and
- Annual compliance reports on how obligations were met.
For tranche two entities it is the SMRs that will be the most immediately relevant reporting channel. AUSTRAC explicitly expects personnel to be trained to recognize suspicious activity and to monitor for unusual transactions/behaviour that may require an SMR.
An SMR must be submitted if you suspect on reasonable grounds that,information you have may be relevant to a crime, a customer/their agent isn’t who they claim to be and/or a person is planning a AML/CTFoffence. Professionals in these industries should be aware of their SMR obligations and look for any red flags.
CONCLUSION
The Act creates significant obligations for Designated Service Providers with failure to comply with these requirements resulting in serious civil and/or criminal charges.
As the implementation date of 1 July 2026 approaches, businesses and individuals should take proactive steps to understand their obligations under the new regime and adapt their asset protection strategies accordingly. This may involve reviewing existing structures, enhancing due diligence processes, and implementing new systems to comply with the travel rule and other requirements.
You should immediately contact legal support if you are non-compliant with Key Obligations.
