In December 2024, Australia enacted the Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Amendment Act 2024, marking the most significant overhaul of the country’s financial crime laws since 2006. This reform aims to bolster Australia’s defences against money laundering and terrorism financing, aligning with international standards set by the Financial Action Task Force (FATF).
Key Changes Under the AML/CTF Amendment Act 2024
- Expansion of Regulated Entities
The Act extends AML/CTF obligations to additional sectors identified as high-risk by FATF. Professionals such as lawyers, accountants, real estate agents, and dealers in precious metals and stones will be required to:
- Conduct customer due diligence.
- Report suspicious transactions; and
- Maintain comprehensive records.
This expansion aims to close loopholes previously exploited by criminal organisations. Customer due diligence measures are anticipated to include:
- Verifying the identity of beneficial owners, trustees, and agents.
- Screening clients against sanctions lists; and
- Implementing plans to address situations where clients are found to be on sanctions lists, such as freezing funds and reporting.
- Enhanced Compliance Frameworks
The Act introduces clearer and more robust compliance requirements, including:
- Mandatory AML/CTF programs for businesses.
- Regular risk assessments; and
- Strengthened governance and oversight mechanisms.
These measures are designed to ensure that entities can effectively detect and prevent illicit activities.
- Increased Powers for AUSTRAC
The Australian Transaction Reports and Analysis Centre (AUSTRAC) has been granted enhanced powers to:
- Conduct examinations of reporting entities.
- Require the disclosure of information; and
- Impose stricter penalties for non-compliance.
These changes aim to improve the effectiveness of Australia’s AML/CTF regime.
Implications for Businesses and Professionals
Entities and individuals in the newly regulated sectors must prepare for the upcoming changes by:
- Developing and implementing AML/CTF programs.
- Training staff on compliance obligations; and
- Investing in appropriate technology solutions.
AUSTRAC has indicated that further guidance and educational materials will be released in mid-2025 to assist with compliance.
Timeline for Implementation
The new regulations will come into effect on 31 March 2026, and entities providing designated services can begin enrolling with AUSTRAC from this date. These entities will then be subject to AML/CTF obligations from 1 July 2026, providing businesses with time to prepare and adapt to the enhanced requirements.
Conclusion
The AML/CTF Amendment Act 2024 represents a significant step in strengthening Australia’s financial crime laws. By expanding the scope of regulated entities and enhancing compliance frameworks, the Act aims to protect the integrity of Australia’s financial system and align with global standards. Businesses and professionals in the affected sectors should begin preparations now to ensure compliance by the 2026 deadline.