On 31 March 2026, a number of significant changes will be made to Australia’s anti-money laundering and counter-terrorism financing (“AML/CTF”) regime. These changes aim to simplify and modernise the current regime and ensure that Australia continues to meet the international standards set by the Financial Action Task Force (“FATF”).
Current Reporting Entities
The changes will affect all reporting entities that are currently regulated by AUSTRAC under the AML/CTF Act, including financial advisers, fund managers, non-cash payment providers, financial product issuers, cryptocurrency exchanges, remittance service providers and gambling service providers.
Tranche 2 Entities
The changes will also draw a number of additional entities (referred to as ‘tranche 2 entities’) into the AML/CTF regime on 1 July 2026. The types of businesses that are likely to be tranche 2 entities include accountants, real estate agents, property developers, precious metal and stone dealers, and trust and company service providers.
Reporting Groups
Under the upcoming AML/CTF regime, reporting entities will be able to form ‘reporting groups’. Members of a reporting group will be able to share one AML/CTF Program and centralise their compliance functions. One example of where this may be beneficial is where a current reporting entity (e.g. a financial advice practice) is part of a corporate group that will soon include a tranche 2 entity (e.g. an accounting firm).
AML/CTF Programs
The requirements that apply to AML/CTF Programs, including those in respect of ML/TF risk assessments, corporate governance, KYC procedures, and ongoing customer due diligence are changing significantly.
A reporting entity may retain its existing AML/CTF Program or adopt a new AML/CTF Program. If a reporting entity chooses to retain its existing AML/CTF Program, it will need to be updated to comply with the upcoming AML/CTF regime. The extent of the updates required will depend on how compliant the AML/CTF Program currently is and how well it is working. In most cases, it will be more efficient and more cost effective to adopt a new AML/CTF Program that complies with the upcoming AML/CTF regime.
Regardless of whether a reporting entity updates an existing AML/CTF Program or adopts a new AML/CTF Program, the change must be made before 31 March 2026, so that the reporting entity is in a position to comply from 31 March 2026.
Please contact Compliance@CowellClarke.com.au if you would like us to assist with the preparation of a new AML/CTF Program that complies with the upcoming AML/CTF regime or consider your current AML/CTF arrangements.
This publication has been prepared for general guidance on matters of interest only and does not constitute professional legal advice. You should not act upon the information contained in this publication without obtaining specific professional legal advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication and to the extent permitted by law, Cowell Clarke does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting or refraining to act in relation on the information contained in this publication or for any decision based on it.
