Reform Timeline and Key Milestones
Australia’s Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) regime is undergoing its biggest overhaul since 2006, driven by the Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024. Enrolment for newly regulated “tranche 2” sectors opens on 31 March 2026, with full obligations kicking in on 1 July 2026. Current reporting entities must update systems by 31 March 2026 to align with the new outcomes-focused framework.
These changes expand regulation to real estate agents, lawyers, accountants, conveyancers, dealers in precious metals and stones, trust and company service providers, plus more virtual asset services from 31 March 2026. AUSTRAC has released the Anti-Money Laundering and Counter-Terrorism Financing Rules 2025, tabled in Parliament on 29 August 2025 after public consultations, to provide detailed supplementary obligations. The rules shift from prescriptive checklists to risk-based measures, aligning with Financial Action Task Force (FATF) global standards.
AUSTRAC’s Reassurance Efforts
AUSTRAC explicitly states it “does not expect perfection on day one,” prioritizing genuine risk mitigation over rigid box-ticking. The regulator is committed to collaborative support, including tailored guidance for tranche 2 entities like real estate and legal professionals, plus a “starter program kit” for small, low-complexity businesses in early 2026. Recent consultations on rule updates address industry feedback, such as opt-out reporting groups to cut administrative burdens and exemptions for low-risk activities like small ATM withdrawals under $10,000.
In its 2025-26 regulatory priorities, AUSTRAC focuses on effective ML/TF/PF risk management and quality reporting, evolving to an outcomes-focused model. For current entities, implementation plans are recommended to bridge gaps during transitions, without excusing ongoing obligations like timely suspicious matter reports. These measures aim to modernize the regime, close criminal loopholes in cross-border transfers, and enhance transparency via the FATF “travel rule.”
Core Obligations Under New Rules
Businesses must enrol (by 28 days after starting designated services) and register where required, providing details on structure, services, and personnel. AML/CTF programs now demand holistic risk assessments covering products, customers, channels, and jurisdictions, approved by senior managers and reviewed every three years. Governance roles are clarified: governing bodies oversee, senior managers approve, and compliance officers manage daily operations.
Customer due diligence (CDD) splits into initial (identity verification before services) and ongoing (transaction monitoring), with enhanced measures for high risks like politically exposed persons (PEPs) and simplified for low risks. Reporting includes suspicious matter reports (SMRs), threshold transactions over $10,000 cash, and international funds transfers; records must be kept for seven years. Legal professional privilege protections are strengthened, effective 1 July 2026.
Tranche 2 entities gain transitional relief for pre-existing customers, delaying full CDD until risk triggers like SMRs. Reporting groups allow shared compliance across corporate entities, with a lead entity coordinating. AUSTRAC’s online tools help check regulated status, and subscriptions provide reform updates.
Industry Impacts and Preparations
For fintechs and virtual asset service providers (VASPs), reforms mandate risk-based programs, board accountability, and travel rule compliance, with exemptions for minor self-hosted wallet withdrawals under $1,000. Real estate, legal, and accounting firms face new scrutiny on high-risk property and trust services, but proportional obligations reduce burdens for low-risk operations. The regime minimizes impacts via flexible, outcomes-based rules, as per the Attorney-General’s Department impact analysis.
Current entities like banks must evolve from old rules, now consolidated into time-limited Class Exemption Rules expiring 2031. AUSTRAC plans sector-specific examples and education to build AML/CTF cultures. Non-compliance risks criminal penalties, especially for unregistered remittances or VASPs.
Broader Context and Global Alignment
These reforms respond to FATF recommendations, bolstering Australia’s defenses against illicit finance amid rising digital asset and property laundering risks. Enhanced AUSTRAC powers, like examinations and information gathering, mirror those of ASIC, aiding its FIU role. By focusing on harm reduction and business viability, AUSTRAC positions the changes as a modernization win, not just added red tape.