AML/CTF legislation: The legal lowdown and looming rules

The article is relevant to members in Australia and was current at the time of publication.

The final version of the Anti-Money Laundering and Counter-Terrorism Financing Rules 2025 has been tabled in parliament and accountants now have just eight months to become compliant. 

Existing reporting entities must meet compliance requirements by 31 March 2026, while accountants, lawyers and real estate agents — as newly-covered Tranche 2 professions — have until 1 July 2026.

Accountants must understand the scope

Brendan Thomas, CEO of the Australian Transaction Reports and Analysis Centre (AUSTRAC), says accountants, like all reporting entities, are required to understand the full scope of the Rules. 

He emphasises however, that the core of the AML/CTF regime for the accounting profession is risk awareness and customer due diligence (CDD).

“Governance is critical,” Thomas says. “It’s the responsibility of the business leadership to understand its ML/TF risks and to ensure that appropriate controls are in place and working.” 

The ultimate objective, he says, is to prevent concealment.

“We want accountants to be confident that they know who they’re dealing with and that the person is who they say they are, not a front for a third party or shell company.”

Simplified versus enhanced customer due diligence

The tabled rules supplement obligations set out in the updated Anti-Money Laundering and Counter-Terrorism Financing Act 2006, and follow two rounds of industry consultation. 

The rules introduce more nuanced risk awareness and due diligence procedures based on customer risk levels and are designed to help businesses build robust compliance frameworks and bring Australia closer to global AML/CTF standards.

Key updates include:

• mandatory collection of granular data (e.g. beneficial ownership and control)
• delayed verification permitted only in limited scenarios with strict deadlines (e.g. account opening, foreign services) 
• enhanced CDD for high-risk customers, including Politically Exposed Persons (PEPs) and virtual asset users, and senior management approval 
• simplified CDD for low-risk clients with appropriate documentation and justification
• expansion of “persons associated with the customer” to include agents, beneficial owners and trustees 
• transitional exemptions for pre-2026 customers.

“Where a customer is a low risk, simplified diligence can apply,” Thomas says. “So very minimal collection of information is required. We’re not asking accountants to keep a record of every document. Just that they record the fact that they did it. It is not as complex as people initially think.” 

More regulatory support coming 

To assist firms to interpret and apply the legislation, AUSTRAC will, throughout the next year, release industry-specific guidance, including examples tailored to the accounting profession.

“Accountants then need to have processes in place to verify that their customers are who they claim to be,” Thomas says. “And they must keep, and continue to keep, records showing how that verification was carried out.”

Thomas adds that practice management must ensure systems are in place to monitor compliance and that any suspicious activity, such as identity concealment or potential criminal conduct, must be reported to AUSTRAC.

New tool to identify AML/CTF obligations

Recognising the complexity of the new legislation, law firm Hall & Wilcox has developed a tool to aid accounting professionals in determining if they are captured by the AML/CTF regime.

“It will help accountants identify which regulated services they provide, give them a clearer understanding of why they’re captured and provide access to people who can support them with the steps they need to take next,” says Adrian Verdnik, Partner at Hall & Wilcox.

The firm has previously developed similar tools to support the industry transition through complex regulatory changes.

“This is part of our ‘Smarter Law’ philosophy, which focuses on providing clients and communities with simple, accessible tools to navigate what is often complex legal terrain,” says Verdnik.
In conjunction with CPA Australia, the tool is being tailored specifically for accountants in public practice.

Avoid a last-minute scramble

Verdnik emphasises the value of investing time upfront to create a tailored, right-sized compliance program.

“Once the program is in place, the ongoing elements such as CDD and reporting become much easier to manage, but that initial risk assessment and program design are key.”

He also warns that AUSTRAC is unlikely to show leniency for non-compliance, given the support materials and guidance being provided.

“Australia is catching up to jurisdictions like the UK, where accountants and real estate agents have been subject to AML obligations for years. AUSTRAC has made it clear that businesses ignoring these changes will face consequences.”

Be ready for compliance

Do not assume your firm is too small or that the legislation does not apply to you. If you provide designated services, the legal obligation is yours. Manage the legal countdown by:

1. reviewing your services
2. identifying your ML/TF risks
3. updating AML/CTF policies
4. using available tools and resources
5. ensuring internal stakeholders are on board
6. starting any necessary training.