AUSTRAC announces key AML/CTF Rules amendments: what you need to know
Marking a further step in the ongoing evolution of Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) framework, AUSTRAC has recently announced amendments to streamline reporting processes, clarify customer due diligence (CDD) and strengthen oversight.
We outline the key reforms and the implications for new and existing reporting entities as well as compliance professionals.
Need to know
- On 25 March 2026, AUSTRAC published two instruments amending the Anti-Money Laundering and Counter-Terrorism Financing Rules 2025 (Cth) (AML/CTF Rules).
- The key amendments, which came into effect on 31 March 2026, include:
a new 'opt-out' reporting group model;
technical clarifications to the CDD provisions;
new class exemptions;
travel rule relief;
aligning the annual compliance report period and lodgement date to the Commonwealth Performance Framework; and
additional AUSTRAC powers and processes.
- Reach out to a member of our specialist AML/CTF team or visit our AML/CTF guide for more information.
Background
On 29 August 2025, AUSTRAC published the new AML/CTF Rules, which supplement the obligations set out in the Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024 (Cth).
AUSTRAC has since identified some targeted amendments to improve its effectiveness, correct minor errors, and reduce administrative burden for reporting entities. These amendments are made by the following instruments and came into effect on 31 March 2026:
the Anti-Money Laundering and Counter-Terrorism Financing (2025 Rules) Amendment Rules 2026 (Cth); and
the Anti-Money Laundering and Counter-Terrorism Financing (Class Exemptions and Other Matters) Amendment Rules 2026 (Cth);
Reporting groups
One of the most significant changes introduced by the Amendment Rules relates to the reporting group framework. The original AML/CTF Rules required related entities wishing to form a reporting group to take active steps to do so, while the Amendment Rules replace this with a new 'opt-out' mechanism.
Under the opt-out model, related entities within a corporate group or other control structure will form a reporting group by default, unless a reporting entity formally declines membership in writing. This is designed to reduce the administrative burden associated with establishing a reporting group, particularly for large corporate structures with multiple reporting entities. The opt-out model is a direct response to industry feedback that the original process for forming a reporting group was unnecessarily complex and resource-intensive.
In addition to the opt-out model, the Amendment Rules introduce consequential amendments to the lead entity provisions, ensuring the lead entity role operates effectively within the context of a default group formation mechanism. These changes are also intended to assist in circumstances where entities may need to transition from existing designated business group arrangements.
Other key amendments
Customer due diligence clarifications
The Amendment Rules introduce several technical clarifications to the operation of CDD provisions, including an extended timeframe for verifying KYC information previously verified by another party to a real estate transaction, and a new deemed CDD mechanism for real estate agents. The policy intent is to recognise that real estate agents may face operational difficulties in obtaining CCD information from parties who are not their client directly.
Enrolment and registration
Updates and corrections have been made to the information required in enrolment and registration applications. These amendments are designed to accommodate all possible business models and structures, ensuring the enrolment and registration framework can be applied consistently across the wide range of reporting entities captured by the reformed AML/CTF regime.
Annual compliance reporting
The Amendment Rules align the annual compliance report period and lodgement date to the Commonwealth Performance Framework as set out in the Public Governance, Performance and Accountability Act 2013 (Cth). This change is intended to streamline compliance reporting obligations and create consistency with broader Commonwealth reporting requirements.
Monitoring for prohibited hate group offences
Reporting entities will now be required to monitor for prohibited hate group offences as part of their obligations to monitor for unusual transactions and behaviours under the safe harbour rules.
Travel rule amendments
The Amendment Rules extend the existing customer exemption from verifying certain information (including payer address) to all customers for transactions conducted before 1 July 2030, recognising that full compliance with the travel rule verification requirements may require additional time for some reporting entities to implement.
Reconsideration of reviewable decisions
The Amendment Rules prescribe the content of forms when applying for reconsideration of a reviewable decision, providing greater clarity and consistency for reporting entities seeking to challenge AUSTRAC decisions.
Additional specified agencies for keep open notices
The amendments prescribe additional agencies as specified agencies eligible to issue ‘keep open notices’. Keep open notices allow law enforcement to direct reporting entities to maintain accounts or business relationships that would otherwise be terminated, to preserve the integrity of an ongoing investigation.
AUSTRAC CEO powers regarding computer programs
The Amendment Rules prescribe the AML/CTF Act provisions under which the AUSTRAC CEO may use computer programs to take administrative action, recognising the increasing role of technology in regulatory administration and providing a clear legal basis for automated decision-making in appropriate circumstances.
Exemptions
The Class Exemption Amendment Rules introduce some new exemptions designed to provide targeted regulatory relief, including:
ATM operators are exempt from undertaking initial CDD on people who withdraw less than $10,000 in cash where the person is not the ATM operator's customer;
virtual asset service providers (VASPs) are exempt from undertaking initial CDD on people who withdraw less than $1000 in virtual assets to their self-hosted wallet where the person is not the VASP's customer;
reporting entities that issue open-loop gift cards are exempt from undertaking initial CDD about the gift card recipient when the card is used to pay for goods and services, provided there are other appropriate risk mitigations in place; and
providers of legal assistance, barristers providing services to Australian government bodies, and clearing and settlement facility operators providing services incidental to the operation of the clearing and settlement facility have been given regulatory relief where it was not intended that they be captured by the AML/CTF regime.
What's next
For both new and existing reporting entities seeking tailored advice or assistance with navigating these amendments or the upcoming AML/CTF reforms generally, we provide comprehensive end-to-end support at every stage to ensure your practices are compliant and effective.
Please reach out to a member of our specialist AML/CTF team or visit our AML/CTF guide for more information.
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