New AML/CTF laws- How does it impact accounting firms?
Austrac is the Australian government’s financial intelligence agency, responsible for regulating and preventing, detecting, and responding to money laundering, terrorism financing, and other critical financial crimes.
On 29th November 2024, the Australian Parliament passed the AML/CTF Amendment Bill 2024. As per AUSTRAC, the new laws simplify and modernise the AML/CTF regime and ensure compliance with international standards set by the Financial Action Task Force.
What are the key changes under the AML/CTF law?
The new laws will now expand into new industries that are recognised domestically and globally as high-risk for financial misuse by criminals.
Financial services are designated services under AML/CTF laws due to their associated risks.
As per the Tranche 2 reform, which is the next phase of Australia’s AML/CTF law updates, the industries/professionals who are brought under the reform are,
- Accountants
- Lawyers
- Real estate agents
- Conveyancers
- Trust and company service providers
- Businesses providing certain virtual asset services
All the above service providers who provide designated services will be regulated by Austrac from July 2026.
The following are the new designated services that will be regulated by Austrac from July 2026.
- assisting in the planning or execution of a transaction to sell, buy or transfer real estate
- assisting in the planning or execution of a transaction to sell, buy or transfer a body corporate or legal arrangement
- receiving, holding, controlling or managing a person’s property to help in the planning or execution of a transaction
- assisting in organising, planning, or executing a transaction for equity or debt financing relating to a body corporate or legal arrangement
- selling or transferring a shelf company
- assisting in the planning or execution of the creation or restructuring of a body corporate or legal arrangement
- acting, or arranging for someone to act on behalf of a person in particular positions in a body corporate or legal arrangement
- providing a registered office address or principal place of business address of a body corporate or legal arrangement.
From July 2026, the accounting firms will need to,
- Be enrolled as a reporting entity, and the online enrolment system has been open since 31st March 2026.
- Be equipped with an AML program, which is a starter program provided by AUSTRAC or have your own program.
- Have an AML/CTF compliance officer
- Train your staff on the AML/CTF program and processes.
- Be prepared to question your clients and report any suspicious activity.
Challenges the accounting firms might face due to these changes
- Accounting firms need to spend more time on compliance with additional documentation and reporting work.
- Increased client due diligence, which involves verifying their identity, recognising the source of funds, and conducting risk assessments, causes additional operational strain.
- Need to structure AML/CTF programs, which will require additional process and system changes.
- Staff are required to be trained continuously on reporting obligations and regulatory updates.
Altogether, the introduction of new AML/CTF obligations increases the workload, operational complexity, compliance requirements and risks involved for accounting firms.
Having a reliable outsourcing partner can help you streamline your operations while your firm can focus on providing a better experience for your clients.
