Understanding anti-money laundering and countering financing of terrorism (AML/CFT) obligations in Australia

1. assisting a person in the planning or execution of a transaction, or otherwise acting for or on behalf of a person in a transaction, to sell, buy or otherwise transfer real estate, where:
   1. the service is provided in the course of carrying on a business; and
   2. the sale, purchase or other transfer is not pursuant to, or resulting from, an order of a court or tribunal
2. assisting a person in the planning or execution of a transaction, or otherwise acting for or on behalf of a person in a transaction, to sell, buy or otherwise transfer a body corporate or legal arrangement, where:
   1. the service is provided in the course of carrying on a business; and
   2. the sale, purchase or other transfer is not pursuant to, or resulting from, an order of a court or tribunal
3. receiving, holding and controlling (including disbursing) or managing a person’s:
   1. money; or
   2. accounts; or
   3. securities and securities accounts; or
   4. virtual assets; or
   5. other property;
   as part of assisting the person in the planning or execution of a transaction, or otherwise acting for or on behalf of a person in a transaction, in the course of carrying on a business, other than in a circumstance covered by subsection (5C), being:
   • the money, accounts, securities, securities accounts, virtual assets or other property being held or managed is payment by the person for the provision of goods or services by the business
   • both:
     • the business does not provide any designated services other than the services referred to in this item 3; and
     • the money, accounts, securities, securities accounts, virtual assets or other property being held or managed is for payments reasonably incidental to the provision by the business of a service that is not a designated service
   • the money, accounts, securities, securities accounts, virtual assets or other property being held or managed is to be received or payable under an order of a court or tribunal
   • the service provided by the business is the receipt or disbursement of a payment mentioned in subsection (5D), being:
     • a payment to or from any of the following:
       • government body
       • a court or tribunal of the Commonwealth, a State, a Territory or a foreign country;
       • a public international organisation;
       • a person who is licensed under a law of the Commonwealth, a State or a Territory to provide insurance, including self-insured licensees; or
     • a payment of a kind specified in the Rules.
   • the service is any other designated service
   • a circumstance specified in the Rules.
4. assisting a person in organising, planning or executing a transaction, or otherwise acting for or on behalf of a person in a transaction, for equity or debt financing relating to:
   1. a body corporate (or proposed body corporate); or
   2. a legal arrangement (or proposed legal arrangement);
   in the course of carrying on a business
5. selling or transferring a shelf company, in the course of carrying on a business
6. assisting a person to plan or execute, or otherwise acting on behalf of a person in, the creation or restructuring of:
   1. a body corporate (other than a corporation under the Corporations (Aboriginal and Torres Strait Islander) Act 2006); or
   2. a legal arrangement;
   in the course of carrying on a business
7. acting as, or arranging for another person to act as, any of the following, on behalf of a person (the nominator), in the course of carrying on a business:
   1. a director or secretary of a company;
   2. a power of attorney of a body corporate or legal arrangement;
   3. a partner in a partnership;
   4. a trustee of an express trust;
   5. a position in any other legal arrangement that is functionally equivalent to a position mentioned in any of the above paragraphs;
   other than in a circumstance covered by subsection (5E), being:
   • acting, or arranging for another person to act, in a fiduciary capacity pursuant to, or as a result of, an order of a court or a tribunal; or
   • acting as the trustee of a regulated debtor’s estate (within the meaning of Schedule 2 to the Bankruptcy Act 1966); or
   • a circumstance specified in the Rules.
8. acting as, or arranging for another person to act as, a nominee shareholder of a body corporate or legal arrangement, on behalf of a person (the nominator), in the course of carrying on a business
9. providing a registered office address or principal place of business address of a body corporate or legal arrangement, in the course of carrying on a business

• Financial services (Table 1)
• Bullion and precious metals, stones and products (Table 2)
• Gambling services (Table 3)
• Services as prescribed in the regulations (Table 4)
• Real estate services (Table 5) – 1 July 2026
• Professional services (Table 6) – 1 July 2026

Enrolment and registration obligations will vary depending on the designated service(s) being provided. Members should refer to the table above.

Assign key roles to staff, including:

• an AML/CTF compliance officer to oversee implementation and day-to-day management of the program.
• a governing body to provide strategic oversight.
• a senior manager to approve the AML/CTF program and key decisions.

NOTE: in the case of sole practitioners and small practices all roles can be performed by the same person.

The provider of designated services (‘reporting entity’) must have and comply with an AML/CTF program comprising:

• the reporting entity’s assessment of the risk of money laundering, financing of terrorism and proliferation financing that the reporting entity may reasonably face in providing its designated services, and
  
• the reporting entity’s AML/CTF policies to appropriately manage and mitigate those risks.
  

The risk assessment must be completed and up-to-date, and the policies must be developed and maintained, prior to providing designated services.

Example: A reporting entity may routinely provide its address as the registered office address of its corporate clients. While the reporting entity itself is not involved in money laundering or terrorism financing activity, it is known that criminals can use this service to create a facade of legitimacy, while distancing themselves from illicit activities. Therefore, due to the risk inherent in the designated service it provides, the reporting entity's assessment of risk and preventative policies must reflect the inherent risk attached to that designated service.

The AML/CTF program must be documented and approved by a senior manager of the reporting entity. It must be kept up to date to reflect significant changes to the reporting entity’s business and relevant ML/TF/PF risk products released by AUSTRAC.

The AML/CTF program must be reviewed at the intervals or with the frequency specified in the AML/CTF Rules (still under development), and in any event at least once every 3 years.

Additionally, the AML/CTF program must be independently evaluated at least once every 3 years.

Reporting entities must conduct initial customer due diligence (CDD) before providing a designated service to a client and ongoing customer due diligence in relation to the provision by the reporting entity of designated services. However, simplified customer due diligence may be undertaken in certain low risk circumstances as part of initial and ongoing customer due diligence.

For reporting entities entering the AML/CTF regime from 1 July 2026, customer due diligence must be completed before designated services are provided.

Reporting entities may not need to conduct CDD for a customer that is a "pre-commencement customer" for the purposes of section 36 of the AML/CTF Act. However, CDD will be required for such customers if the customer:

1. has been the subject of a suspicious matter report; or
2. there is a significant change in the nature and purpose of the business relationship with the customer which results in the customer risk being medium or high.

Careful consideration should be given as to whether or not a customer meets the criteria of a "pre-commencement customer" as civil penalties apply where CDD is not conducted when required.

There are still ongoing CDD obligation.

Find out more by consulting the AUSTRAC guidance.

A reporting entity may need to submit the following reports to AUSTRAC:

• Suspicious matter reports (SMR): When it is suspected, on reasonable grounds, that a person is not who they claim to be or that a matter is linked to criminal activity or proceeds of crime.
• Threshold transaction reports (TTR): For individual physical currency transactions valued at A$10,000 or higher.
• International value transfer service reports (IVTS): For all international transfers of value transactions.
• Cross border movement reports: Submit when carrying physical currency or bearer negotiable instruments payable to bearer valued at A$10,000 or higher into or out of Australia.

A reporting entity will need to submit an annual compliance report summarising how the reporting entity has met its AML/CTF obligations in the previous year.

A reporting entity must keep records that are reasonably necessary to demonstrate compliance with the reporting entity’s AML/CTF obligations, which are in English or in a form in which is readily accessible and readily convertible into writing in English.

The reporting entity must retain the records until 7 years after the record is no longer relevant to the reporting entity’s compliance with its AML/CTF obligations.

Find out more by consulting the AUSTRAC guidance.