Countdown to AML/CTF reforms: AUSTRAC outlines what’s required
In light of the looming anti-money laundering and counter-terrorism financing (AML/CTF) reforms, the Australian Transaction Reports and Analysis Centre (AUSTRAC) has outlined what it expects from currently regulated and soon-to-be regulated entities. It also provided guidance on what these entities can expect from AUSTRAC once the reforms come into effect.
Reforms to the AML/CTF Act will take effect on:
- 31 March 2026 for currently regulated entities
- 1 July 2026 for newly regulated entities, including the legal, accounting and real estate industries.
These reforms come ahead of Australia’s next evaluation by the Financial Action Task Force – the global body that governs AML/CTF compliance.
For more context, see our previous articles:
Key takeaways
- AUSTRAC does not expect entities to have perfectly operating AML/CTF programs immediately. However, being proactive and showing sustained effort in developing and reviewing current AML/CTF programs is key.
- Emphasis will be placed on newly regulated entities to actively engage with the reforms and ensure compliance with their obligations by 1 July 2026, or risk facing focused scrutiny by the regulator.
- Look out for further regulatory guidance and materials to be released by AUSTRAC in the coming months to assist with implementing the required changes to new and existing AML/CTF programs.
What AUSTRAC expects for currently regulated entities
Businesses already subject to the AML/CTF Act must:
- maintain existing AML/CTF controls
- develop and document implementation plans to meet the reformed obligations
- show ongoing progress against those plans
- make tactical improvements to systems and processes in the short term
- review and strengthen AML/CTF frameworks to ensure they are fit for purpose.
Relying on the ‘status quo’, or superficial compliance – particularly if your current AML/CTF policies are ineffective – will not be tolerated. AUSTRAC expects businesses to comply with current obligations while also reviewing and enhancing their existing AML/CTF policies and procedures to determine their effectiveness in preparation for the incoming reforms.
What AUSTRAC expects for newly regulated industries
Businesses in the legal, accounting and real estate industries – soon to be regulated under the AML/CTF regime next year – will need to:
- enrol as a reporting entity (the online enrolment system will be accessible from 31 March 2026)
- implement an AML/CTF program
- appoint an AML/CTF compliance officer
- train staff on their AML/CTF program and processes
- be ready to ask clients questions and report suspicious activity.
What to expect from AUSTRAC
AUSTRAC has acknowledged the challenges facing newly regulated industries and has committed to a supportive approach. It has said it ‘does not expect newly regulated businesses to be perfect at identifying and controlling for money laundering risks from day one’.
However, this does not mean the regulator will overlook non-compliance once the reforms commence. AUSTRAC has committed to setting newly regulated businesses up for success by providing guidance, education and materials on how to comply with their statutory obligations.
What’s coming:
- By the end of July 2025: AUSTRAC will publish a more detailed timeline of regulatory expectations and it’s FY25/26 regulatory priorities to help businesses align their compliance efforts.
- In December 2025: AUSTRAC will release a ‘starter AML program’ for businesses to integrate if they do not develop their own.
Final comments
It’s clear from AUSTRAC’s statement businesses can’t afford to ignore the upcoming changes. The reforms are designed to reduce the risk of serious financial crime, and AUSTRAC will be closely monitoring compliance – particularly among newly regulated entities, once these new obligations come into effect next year.
By providing detailed guidance and assistance as the commencement dates approach, AUSTRAC has made its priorities as transparent as possible and businesses should act now to get ahead of the reforms.
If you’d like to understand how the new AML/CTF regime may affect your business, contact Langton Clarke, John Bassilios, Pip Bell, Andrew Ong or a member of our Funds team.
This article was prepared with the assistance of Kurt Frampton, Law Graduate.
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