7 Apr 2026Deadlines are fast approaching for businesses to take steps to comply with changes under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act).
AML/CTF Act reforms expand scope of existing laws
The new legislative amendments broaden the reach of laws fighting money laundering and covert financing of terrorism. (Please see Anti-Money Laundering and Counter-Terrorism Financing Act 2006.)
The reforms started on 31 March 2026 for what are called “tranche 1 entities” which perform financial transactions, such as banks, casinos, financial institutions and remittance service providers. These entities are already required to report suspicious activities.
New entities covered by AML/CTF Act are “gatekeepers” against criminal activity
Newly covered by the Act are so-called “tranche 2 entities”, such as legal and accounting practices, trust and company service providers, real estate professionals, and dealers in jewels and precious metals. These entities must comply by 1 July 2026.
Tranche 2 entities are described by the government as Australia’s “gatekeepers” against criminal activity and funds going to terrorists. Under the new laws, these entities are being tasked with assessing and managing their risk in relation to illicit financial transactions and helping law enforcement and national security by alerting authorities to suspicious activities.
The AML/CTF Act also regulates the financial, gambling, remittance, digital currency exchange and bullion sectors that provide designated services listed in the Act.
Money laundering undermines society and rule of law
The AML/CTF Act is regulated and policed by the Australian Transaction Reports and Analysis Centre, known as AUSTRAC. (Please see Education, AUSTRAC, 1 April 2026.)
Money laundering is the process of hiding the origin of illicit funds gleaned through crime, so they appear to come from a legitimate source. (Please see Money laundering and the harm from organised crime: Results from a data linkage study, Australian Institute of Criminology, 2024.)
Organised crime is estimated to cost Australia up to $60 billion a year.
Introducing the Bill in 2024, Attorney-General Mark Dreyfus told parliament: “Australia is an attractive destination to store, launder and legitimise proceeds of crime. That cannot continue – and this bill will put an end to it.
“Money laundering is not a victimless crime. Each year, billions of dollars of illicit funds are generated from criminal activity such as drug trafficking, cybercrime, child exploitation, tax evasion and other illegal and corrupt practices,” Mr Dreyfus said.
“Hardworking Australians have to compete in the housing market against criminals with dirty cash or run their businesses against loss-making, criminally owned enterprises.
“It’s also used by authoritarian regimes to fuel corruption, and undermine the rule of law across the world.”
Expanded AML/CTF Act requires extensive changes for businesses
The new laws will require extensive changes for the management of financial transactions for the businesses coming under the expanded Act.
Most legal and real estate practices already meet some AML/CTF requirements, such as checks identifying clients and being aware of ways to spot money laundering and terror financing.
Businesses which are particularly targeted by money launderers are those involved in transfers of large amounts of money, such as for property transactions or sales of businesses.
Under the new Act, law professionals will have tailored protections for information that may be subject to legal professional privilege.
This includes clear exemptions and mechanisms for regulated entities to comply with their reporting and disclosure obligations, without being required to disclose privileged information to AUSTRAC and other agencies.
Effective AML/CTF program required for businesses under the Act
Having an effective AML/CTF program, as required by AUSTRAC, should help businesses avoid being misused for financial crime, meet new legal obligations, and make defensible decisions about clients and transactions.
By 1 July 2026, tranche 2 entities must have an AML/CTF program that includes risk assessment, policies and procedures to manage risk, appointment of a compliance officer, training of staff on the requirements, and readiness to engage with clients in relation to the new obligations, as well as to report any suspicious activities.
Tranche 2 entities must also enrol with AUSTRAC by 29 July 2026. Enrolments opened on 31 March 2026.
AUSTRAC has released anti-money laundering program starter kits to help small businesses prepare for the new regulations. (Please see Program starter kits, AUSTRAC.)
Significant penalties for non-compliance with AML/CTF Act
It would be wise to get advice from an AML expert to ensure your business complies with the new laws, as penalties for non-compliance can be severe. It can start with a Federal Court issued fine of up to $6.6 million for an individual, or $33 million for a corporation per breach. (Please see Consequences of not complying, AUSTRAC, 2 April 2026.)
AUSTRAC has already successfully taken several tranche 1 casinos and banks to court for multiple counts of failing to comply with the legislation, which started in 2006.
Adelaide casino SkyCity was fined $67 million, Crown casino Melbourne was fined $450 million, Westpac was fined $1.3 billion, Commonwealth Bank paid a $700 million penalty and Tabcorp was fined $45 million.
Other civil court actions are underway for non-compliance with AML/CTF laws. (Please see Enforcement actions taken, AUSTRAC, 1 April 2026.)
