AUSTRAC, Australia’s financial intelligence agency, published guidance on March 5, 2026, detailing its new compulsory examination powers under Section 172A of the Anti-Money Laundering and Counter-Terrorism Financing Act 2024 (AML/CTF Amendment Act). These powers, effective since January 7, 2025, allow the AUSTRAC CEO or delegates to issue notices requiring individuals or businesses to attend examinations, answer questions, and produce relevant documents. The guidance sets clear expectations for when and how these powers will be applied, emphasizing their role in gathering evidence for enforcement decisions and court proceedings related to AML/CTF compliance.
This release comes as AUSTRAC’s regulatory scope expands dramatically, from 17,000 to nearly 100,000 reporting entities, including lawyers, accountants, real estate agents, and non-bank lenders. The powers mark a shift toward proactive intelligence gathering, aligning AUSTRAC’s capabilities with those of ASIC and APRA.
Background on Legislative Changes
The AML/CTF Amendment Act 2024 introduced three key enhancements to AUSTRAC’s toolkit. First, the compulsory examination power under new Section 172A enables notices for persons reasonably believed to hold relevant information on AML/CTF compliance, regulations, or related offenses under the Crimes Act 1914 or Criminal Code. Second, a new information-gathering notice allows proactive requests untied to suspicious matter reports, supporting AUSTRAC’s financial intelligence unit functions. Third, an expanded Section 167 power permits notices to any person—not just reporting entities—with pertinent details.
These reforms address rising financial crime risks, including money laundering through emerging sectors like digital assets and non-bank lending. Implementation began in early 2025, with full tranche-two obligations for new sectors phased in through 2026.
Key Features of Compulsory Examinations
Under Section 172A, notices must specify the examination’s subject matter, such as AML/CTF program compliance or offense investigations. Examinees must appear before an authorized examiner, produce documents, and answer questions, even if self-incriminating. Privilege claims against self-incrimination are available, rendering such statements inadmissible in certain civil, criminal, or penalty proceedings, but answers remain usable in money laundering or terrorism financing cases.
Examinations follow a structured framework: they are recorded, and statements can support AUSTRAC enforcement actions. The guidance stresses proportionality—powers target matters where reasonable grounds exist, prioritizing high-risk areas like board oversight failures or inadequate transaction monitoring.
Implications for Businesses and Individuals
The guidance underscores personal accountability, with AUSTRAC signaling increased focus on joining individuals—such as directors and senior managers—to corporate proceedings for AML/CTF breaches. Robust governance, including board-level AML/CTF oversight and technology-driven monitoring, is now critical. Non-compliance risks escalate, as these powers enable deeper probes into program effectiveness and overlap with financial accountability regime (FAR) duties.
For newly regulated sectors, preparation involves risk-based AML programs rejecting “template” approaches, alongside staff training on notice responses. Legal advisors recommend documenting privilege claims carefully during examinations.
Broader Regulatory Context
AUSTRAC’s enforcement pace shows no slowdown, with 2025-26 priorities including technology-enabled compliance and individual liability. The guidance aligns with global AML standards, bolstering Australia’s defenses against illicit finance amid cryptocurrency growth and sector expansion. Businesses face audits and reviews with heightened scrutiny, prompting calls for proactive enhancements like advanced monitoring systems.
Industry Reactions
Law firms and consultants view the guidance as a compliance roadmap, urging reviews of internal frameworks. Emerging finance sectors, under new surveillance, must integrate these powers into operations. While empowering enforcement, the measures balance rights through privilege protections.
Compliance Recommendations
To mitigate risks:
- Strengthen board oversight of AML/CTF programs.
- Deploy real-time monitoring tools.
- Train staff on examination protocols and privilege.
- Conduct internal audits preempting AUSTRAC notices.
This guidance reinforces AUSTRAC’s robust stance, ensuring Australia’s AML/CTF regime evolves with financial crime threats.