AML/CTF myths exposed: Clarifying your AML/CTF reporting obligations

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

Australia’s expanded anti-money laundering and counter-terrorism financing (AML/CTF) laws for accountants came into effect on 1 July 2026. 

The expanded compliance obligations apply to accounting services that fall within AUSTRAC’s professional designated services framework and include requirements for risk assessments, customer due diligence (CDD), reporting to AUSTRAC and internal governance.

Those who have been brought into the regime, but have not taken steps to meet their obligations, may now face significant consequences.

Your first move

Accountants should first determine whether the service they are providing is a designated service before applying the AML/CTF requirements. 

CPA Australia has published a range of resources to help accountants understand their AML/CTF reporting obligations, while AUSTRAC provides detailed information and examples on the professional designated services incorporated into the Anti-Money Laundering and Counter-Terrorism Financing Act 2006.

Accountants providing captured professional designated services may need to submit Suspicious Matter Reports (SMRs), Threshold Transaction Reports (TTRs) where applicable, and annual compliance reports to AUSTRAC.

Reporting entities must conduct a risk assessment that considers money laundering, terrorism financing and proliferation financing risks, and use it to identify and evaluate potential exposure across their captured services.

However, some accountants are still unsure about their obligations, including when they are performing designated services, and when they need to complete risk assessments and CDD checks.

Below we answer the most common questions being asked by accountants.

When am I providing a designated service?

The nine professional designated services for accountants specifically relate to:

• assisting a person in the planning or execution of a transaction or otherwise acting for or on behalf of a person in a transaction
• receiving, holding and controlling (including disbursing) or managing a person’s money, accounts, securities and securities accounts, virtual assets or other property
• providing instructions for financial transactions
• acting as, or arranging for (on behalf of another person) someone to act as a director or company secretary, partner, trustee or a power of attorney.

“The first question accountants should be asking themselves when they are requested by a client to provide a particular service, or when they’re told they’ve got an AML/CTF obligation should be, ‘which designated service?’”, says CPA Australia’s Policy Advisor, Regulation and Standards, Neville Birthisel FCPA.

“That won’t always be black and white, but most times we’re finding it is. Preparing tax returns is not a designated service requiring AML/CTF obligations.”

When do I need to do an initial CDD check?

Under the expanded AML/CTF regime, accountants must conduct CDD before providing any designated service. This includes forming companies, trusts, partnerships or other legal arrangements, or acting as or arranging for someone to act as a director, secretary, trustee, partner or nominee shareholder.

CDD involves identifying the customer and determining who ultimately owns or controls them, such as individuals with 25 per cent or more ownership or individuals exercising effective control.

Birthisel says there is no requirement to undertake initial CDD checks on pre-existing clients unless their AML/CTF risk profile has increased or they request a designated service they have not previously requested. The same applies to individuals, companies and trusts.

“If, for example, you provide your address as their registered office and you’ve done that for the last 20 years and you intend to do it for the next 20 years, and that’s all you do, you’ll never have to do initial customer due diligence for them,” Birthisel says.

Likewise, being asked to change the private address of a client or a director is not considered to be providing a designated service. However, if an accountant is asked by a pre-existing client if they can now use the practice’s address as their registered office, this will be treated as providing a designated service.

What if I take over a client from another practice?

Birthisel says accountants taking on a client from another practice need to be satisfied that they have identified them appropriately.

“When you are taking on a new client from another accountant, you’re probably going to be fairly diligent in the customer diligence you conduct anyway, because you don’t know the other accountant or what they’ve done,” he says.

“So, you still want to know who your client is, what they’re involved in, what the risks are, and what the opportunities are to ensure that you have fully assessed and appropriately onboarded them.”

Can I create a business group with other accountants?

The new laws allow related entities (including non reporting entities) to share AML/CTF obligations and information.

However, the AML/CTF grouping rules are similar to corporate grouping rules where there needs to be ownership and control.

“Just because you and another accountant know each other doesn’t mean you can form an AML/CTF group,” Birthisel says.

What is a body corporate for AML/CTF?

Another area of confusion for some accountants is the broad use of the term “body corporate” within the AML/CTF Act in relation to transactions and other designated services.

“Some people are thinking this means ‘owners corporation’, as in a rental situation,” Birthisel says. “However, the AML/CTF usage is more closely aligned with the Corporations Act 2001 (the Act).”

In this context, a body corporate is an entity with a separate legal personality distinct from its members. This includes companies incorporated under the Act, incorporated associations, statutory corporations established by legislation, corporations sole (where applicable) and various foreign incorporated entities.

 

 

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