What is the Anti-Money Laundering and Counter-Terrorism Financing Act (AML/CTF Act)?
The AML/CTF Act already regulates the provisions of certain types of services known as ‘designated services’. It has applied to financial services, gambling services and bullion services for nearly 2 decades. It has required 'reporting entities' to enrol with AUSTRAC (Australia’s financial intelligence unit and AML/CTF regulator), establish and comply with an AML/CTF Program, and report certain matters to the regulator (including cash transactions above a threshold of $10,000, international funds transfers instructions, suspicious matters, and annual compliance reports. Historically it has been supported by a prescriptive set of AML/CTF Rules covering a wide range of matters including ‘know your customer' (KYC) checks.
Enforcement of the regime has resulted in some of the highest civil penalties in Australian history. The cost of managing the risk and complying with the regime can be significant; as can be the customer impact.
Which new sectors are impacted by Anti-Money Laundering and Counter-Terrorism Financing Act (AML/CTF Act)?
The Act extends AML/CTF obligations to new sectors, including lawyers, accountants, and real estate professionals, requiring them to implement AML/CTF programs by 1 July 2026. In addition, the Act will now apply to a range of businesses dealing in precious metals and stones. The amendments also more explicitly extend AML/CTF obligations to persons involved in transfers of value (including digital assets and not just currency) to reflect modern business practice.
What other changes are happening?
The reforms are more than just an extension of the AML/CTF Act to new service types. They involve a substantial rewrite of the obligations even for existing reporting entities.
At the heart of the amended regime is the increased importance of the money-laundering and terrorism financing risk assessment (which must now also include proliferation-financing risk). Reporting entities will be required to ensure that their AML/CTF program responds in a more bespoke manner to the ML/TF risks identified in their ML/TF risk assessments.
New AML/CTF Rules (most of which were finalised at the end of August 2025) will replace the existing rules and AUSTRAC is issuing significant new guidance (progressively from October 2025). Features of the legislative changes include (amongst other things):
- A revised structure for AML/CTF programs
- Fundamental changes to reporting group concepts (replacing the existing designated business group concepts)
- New governance requirements that impose specific obligations on governing bodies, senior management and the AML/CTF Compliance Officer
- Changes to Customer due diligence
- Introducing the concepts of 'transfers of value' and 'international value transfer services' (IVTS) to replace the existing regimes for international funds transfer instructions (IFTI) and designated remittance arrangements
- Reforms to offshore activities
- An extension to AUSTRAC's powers to include an examination power and an expended information gathering power.
The emphasis on identifying and mitigating ML/TF risk in the new law means that compliance requires both legal and risk management considerations. Evolving technologies, such as AI-enabled biometrics and blockchain, and reliance arrangements with third party providers, will likely play an increased role in how reporting entities meet their new compliance requirements, enhance efficiency, and ensure robust customer verification and monitoring.
Anti-Money Laundering and Counter-Terrorism Financing Act: Timeline to compliance
