Background
On 10 December 2024, the Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024 (Cth) ("AML/CTF Amendment Act") received royal assent, amending the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) ("AML/CTF Act").
Prior to the inception of the AML/CTF Amendment Act, Australia was one of five jurisdictions that did not regulate 'tranche two' entities. In 2015, the FATF scrutinised Australia's failure to adhere to international AML/CTF standards, calling out the lack of regulation for 'high-risk' services, also known as 'tranche two' entities, such as real estate professionals, professional service providers and dealers in precious stones and metals. This deficiency was acknowledged in the 2016 statutory review of the Australian AML/CTF regime, leading to the development of the AML/CTF Amendment Act.
The AML/CTF Amendment Act addresses three main objectives:
- To expand the scope of the AML/CTF regime to include particular 'high-risk' services or 'tranche two entities' that have fallen outside of the scope of the current regime, such as real estate professionals, professional service providers including lawyers, accountants, trust and company service providers, and dealers in precious stones and metals;
- To simplify the AML/CTF regime in order to improve the effectiveness and provide clarity for businesses to comply with their obligations; and
- To update the regime to reflect contemporary business structures, technologies and illicit financing methodologies.
For further information relating to the inclusion of tranche two entities under the AML/CTF Act, see our previous client alert here.
Summary of key amendments to the AML/CTF Act
The table below sets out the amendments made to the AML/CTF Act and the commencement date of each schedule.
| Provision |
Summary of provision |
Date/Details |
| Schedule 1 – AML/CTF programs and business groups |
Establishes a framework for reporting entities and defines the entities that constitute a 'reporting group'. Provides an overview and establishes requirements for reporting entities to maintain and comply with an AML/CTF program. Reporting entities are also required to undertake an assessment that identifies the risks of money laundering and financing of terrorism. Amendments also dictate requirements for establishment, compliance and record keeping in relation to the AML/CTF program. |
31 March 2026 |
| Schedule 2 – Customer due diligence |
Clarifies requirements and processes that reporting entities must adhere to in relation to undertaking initial and ongoing customer due diligence. |
31 March 2026 |
| Schedule 3 – Regulating additional high-risk services |
Expands the AML/CTF Act to include new designated services, being 'high-risk' services or 'tranche two' entities, such as real estate professionals, dealers in precious metals and stones and professional service providers. |
31 March 2026 |
| Schedule 4 – Legal professional privilege |
Provides clarification with regard to how information which is required for AML/CTF purposes should be treated when it may be subject to legal professional privilege. |
1 July 2026 |
| Schedule 5 – Tipping off offence and disclosure of AUSTRAC information to foreign countries or agencies |
Reforms the current provision which prevents entities from 'tipping off' their customers in relation to suspicion relating to their behavior. Instead, the focus of the offence has shifted toward preventing the disclosure of information where it may prejudice an investigation. Establishes two exceptions for when information may be appropriately disclosed. |
Schedule 5, item 1 commences 31 March 2026.
Schedule 5, item 2 commences 31 March 2025.
Schedule 5, Part 1, Division 2 commences 31 March 2026.
Schedule 5, Part 2 commences the later of the commencement of Schedule 5, item 2 and immediately after the commencement of item 94 of Schedule 1 to the Intelligence Services Legislation Amendment Act 2024.
|
| Schedule 6 – Services relating to virtual assets |
Substitutes the term 'digital currency' with 'virtual asset' and expands the AML/CTF Act to include virtual asset-related services. The definition of virtual asset has been amended to encompass a wider breadth of 'virtual assets'. |
Schedule 6, Part 1 commences 31 March 2026.
Schedule 6, Part 2 commences the later of the commencement of Schedule 6, Part 1 and immediately after the commencement of Schedule 2 to the Crimes and Other Legislation Amendment (Omnibus No. 1) Act 2024.
|
| Schedule 7 – Definition of bearer negotiable instrument |
Clarifies the definition of a 'bearer negotiable instrument'. |
1 July 2026 |
| Schedule 8 – Transfer of value and international value transfer services |
Simplifies the terminology and concepts relating to the regulation of telegraphic transfers, remittance and virtual asset transfers. Amends the international funds transfer instruction reporting regime. |
31 March 2026 |
| Schedule 9 – Powers and definitions |
Establishes new information gathering powers which enables AUSTRAC to obtain information and documents to assist with enforcement decisions and for intelligence purposes. |
Schedule 9, Parts 1 to 3 commence 7 January 2025.
Schedule 9, Part 4 commences on the later of Schedule 9, Parts 1 to 3 and immediately after the commencement of item 94 of Schedule 1 to the Intelligence Services Legislation Amendment Act 2024.
|
| Schedule 10 – Exemptions |
Transfers the exceptions for particular AML/CTF obligations from the AML/CTF Rules to the AML/CTF Act to enable greater parliamentary oversight of appropriate exemptions from designated services. |
31 March 2026 |
| Schedule 11 – Repeal of the Financial Transaction Reports Act 1988 |
Repeals the Financial Transaction Reports Act 1988 (Cth) in its entirety. |
7 January 2025 |
| Schedule 12 – Transitional rules |
Enables the Minister to make rules of a transitional nature relating to amendments of the AML/CTF Act through legislative instrument. This schedule also contains a 'Henry VIII clause', whereby rules made within four years of commencement of the AML/CTF Act can amend the operation of the primary AML/CTF Act. |
7 January 2025 |
Next steps
Due to the significant amendments to the Act, reporting entities should review the revisions to the AML/CTF Act to consider how their businesses will be affected, and consider whether new policies and processes are required in order to maintain adequate compliance with their obligations under the AML/CTF framework.
AUSTRAC has reported that it has been in close collaboration with industry representatives in order to develop education and guidance, to ensure that reporting entities are able to clearly understand and meet their reporting obligations. Since the AML/CTF Amendment Act's release, AUSTRAC has released its first public consultation into the development of the proposed new AML/CTF Rules ("Rules"). AUSTRAC invites submissions from industry on the Rules and the consultation paper. The first of two rounds of consultation will close at midnight on 14 February 2025. We will provide an in-depth update on this first round of consultation in early 2025.
