Anti-money laundering legislation lands: here’s what you need to be ready for

This article was current at the time of publication.

If you’re worried about the implications of the extension of the AML/CTF regime and the new powers of the Australian Transaction and Analysis Centre (AUSTRAC), CEO Brendan Thomas wants to allay concerns.

He notes: “We don’t normally punish people who are trying to do the right thing. Where businesses are working constructively with us, we’ll work constructively with them. 

“It’s where we get people not really wanting to follow their legal requirements or actively objecting to following their legal requirements, or where they’re just ignoring significant risk and allowing criminality to occur, that we would take stronger action,” he warns.

Power to interrogate

The regulatory body has new powers under the Anti-Money Laundering and Counter-Terrorism (AML/CTF) Financing Amendment Bill, which has been passed by Parliament. 

The additional powers will bring it into line with other regulators and give it more teeth. 

Currently, it can request information from professional services providers such as lawyers, real estate agents and accountants but it’s not mandatory for these services to comply.

“Under the [the Act], we’ll get some additional powers to make that happen,” says Thomas. “We’ll also have powers to require people to speak to us.”

New rules explained

Stakeholder forums, already underway, are bringing the accounting industry together to discuss what the rules might look like for tranche two entities, which also include lawyers, estate agents, company service providers and dealers in precious metals and stones. 

“There will be a significant opportunity for accountants, representative bodies, and for some accountants themselves, to participate in the design of those materials,” says Thomas.

“From there, we’ll be providing very specific advice about the risks and what you need to do to comply.

“Accountants, [who provide services included in the expanded regime], will have to register with us and we’ll provide some very specific information about how to do that as easily as possible. And you’ll be required to report certain things to us. 

“Again, we’ll provide practical information and some assistance on that,” he says.

AUSTRAC is currently consulting with industry on the new rules required as a result of the amending Act. CPA Australia, along with CAANZ and IPA, made a submission calling for “clear, sector specific, guidance from AUSTRAC on the current threat environment and how it manifests in each sector of professional services, as soon as practicable.” 

No need for consultants

The New Zealand experience saw accountants turning to consultants to meet their new requirements.

Thomas says the guidance material AUSTRAC is producing with the help of new upgrades, staff, resources and technology, will keep costs to a minimum and ensure an easier transition for Australia. 

New software may be needed; AUSTRAC recommends public practices contact it directly or CPA Australia before purchasing.

Negligent or falling short?

Thomas says AUSTRAC would only use its new powers against someone “who’s negligent in their legal responsibilities”. Its preference is to work with businesses rather than prosecute them.

“We do take strong regulatory action, when people are really negligent, not when people are trying to do a good job but falling short.”

The new Act allows AUSTRAC to amend the existing rules (that help clarify the legislation) and guidance material (which shows how to apply the rules) that businesses will need to follow to comply with the new reforms. 

Already regulating 17,500 businesses and gathering financial intelligence, AUSTRAC will now guide tranche two entities through their new obligations. 

“We’re not expecting you to go out and hire consultants unless you choose to. We’ll give you the base information that you need to comply with the law.”

‘Cost-effective’ approach

Assessments of compliance “will be done in a very ‘light touch’ way for small (low complexity) businesses”.

“Our approach is to make sure people who want to comply, can do it in the most efficient and cost-effective way they can. 

“They’ve got businesses to run, other regulatory standards to meet and we want to make sure it’s easy and efficient for them to meet these standards.”

Be aware: infringements

Infringements are covered in the Act. Thomas notes: “That could be a number of things from seeking civil penalties to imposing penalty notices on them, to making them comply with undertakings to improve their risk controls in their money laundering regime.”

Boost benefits businesses

Extra staff have already been hired to work on the new rules, guidance material and assessments, with AUSTRAC receiving A$160 million over the next two years to ensure it can support businesses by:

• Providing information on new legislation. 
• Working with accounting bodies to shape rules and guidance material.
• Including accountants in the design of guidance material.
• Ensuring practices register in correct entity categories.
• Providing specific advice on risk and compliance.

AUSTRAC is urging practitioners to note key dates and provide feedback to CPA Australia’s policy and Advocacy team. 

Disrupting financial crime

Australia’s AML/CTF reforms have been a long time coming. The country has lagged behind many other developed countries in creating these laws. 

“The money being laundered through Australia is significant,” says Thomas. “It’s the proceeds of massive drug trades, it’s the proceeds of human trafficking, it’s the proceeds of child sexual exploitation. 

“That’s the horrible crime we’re trying to get on top of.”

Accountants must now remember to: 

• Register by 31 March 2026. (Reporting obligations begin 1 July 2026.) 
• Maintain an AML/CTF program.
• Conduct client due diligence.
• Report all suspicious behaviour. 
• Keep records for seven years and make them available, on request.

For more background on the AML changes please see this earlier article.