For existing reporting entities, most changes take effect on 31 March 2026, so it’s important for reporting entities to start considering the action they must take now.
Some enhancements to AUSTRAC’s information and examination powers came into effect earlier, on 7 January 2025, and amendments to the ‘tipping off’ offence were effective from 31 March 2025.
The Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024 (AML/CTF Act) was passed by Parliament on 29 November 2024. The Amended AML/CTF Act introduces substantial changes to modernise, clarify, and simplify the existing AML/CTF regime in Australia.
There are a number of key changes, including in relation to governance, AML/CTF Compliance Officers, and customer due diligence (CDD). The most important change is in relation to the risk assessment – existing reporting entities must conduct a risk assessment of their business and also of each client onboarded.
Existing reporting entities must update their current AML/CTF Programs, and the frameworks and systems, and consider changes to how they manage their risks and obligations. Reporting entities must ensure they have the necessary resources, tools and organisational focus to make these changes over the coming months.
Yes, reporting entities must update their existing AML/CTF Program in order to comply with the amended Act and Rules. AUSTRAC expects reporting entities to be making a concerted effort to review and update their AML/CTF Programs, systems, policies and controls to ensure changes are implemented prior to 31 March 2026.
No, AUSTRAC has not announced a transition period for existing reporting entities.
Yes, risk assessments are a critical focus for AUSTRAC. Reporting entities will need to review and enhance their ML/TF risk management framework and processes. The requirement to undertake a money-laundering, terrorism financing, and proliferation financing (ML/TF/PF) risk assessment is now a specific requirement in the Amendment Act. This overarching written risk assessment must consider relevant risks, taking into account the nature, size and complexity of your business, including:
Proliferation financing refers to providing funds for the manufacture, acquisition, or use of nuclear, chemical, or biological weapons.
No. The updated AML/CTF Act revises the structure of AML/CTF programs.
The two main components are now:
Programs no longer need to be formally split into Parts A and B. Reporting entities can implement a range of policies which must be documented in writing, approved by a senior manager and reviewed and updated regularly.
Remember, non-compliance with your AML/CTF policies now constitutes a civil penalty offence.
Independent reviews are now called independent evaluations.
Reporting entities must have their AML/CTF policies independently evaluated at least every three years. Your AML/CTF policies must incorporate procedures for conducting these independent evaluations. If the independent evaluator makes adverse findings, reporting entities must conduct a review of their ML/TF risk assessment as soon as practicable.
Under the new requirements, there are three key roles:
You will need to formally appoint an AML/CTF Compliance Officer and determine the person is:
The concept of a Designated Business Group (DBG) is replaced by a new ‘reporting group’ framework. A ‘reporting group’ may include both reporting and non-reporting entities. There are two types of reporting groups:
Reporting entities in the group must designate a ‘lead entity’. The lead entity’s governing body must maintain oversight across the group and will be liable for a contravention committed by a reporting entity member of the group.
The reforms shift from prescriptive rules to an outcomes-based framework. Reporting entities are required to carry out:
The risk assessment assists reporting entities in determining the initial and enhanced KYC information required from the client.
Initial CDD must be completed before providing a designated service unless it would interrupt the ordinary course of business. As part of initial CDD, reporting entities must establish:
Reporting entities must continuously monitor customers to identify, assess, manage, and mitigate ML/TF/PF risks. This includes:
Sophie Grace can provide you with an AML/CTF Program and can assist you to tailor it to your business’ needs. We have three different options available to suit your business and finance needs.
You can purchase template documents from our online shop. The template is an instant download and includes prompts to help you tailor the document yourself. We have template documents for:
Sign up to the Compliance Portal and receive the template AML/CTF Program Package, and obtain access to updated documents in light of any updates we make as new guidance or amended legislation is released. Choose between:
Sophie Grace can assist you to prepare the AML/CTF Program package based on your business’ specific requirements. Contact us to discuss further.
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