AUSTRAC tables new AML/CTF Rules in Parliament
What should a company board understand about the updated regulations regarding Australian AML/CTF laws tabled to Australian Parliament on 29 August 2025?
Introduction
Boards, Responsible Managers and Compliance Officers of Australian Financial Services Licence (‘AFSL’) holders and ‘tranche two’ entities such as:
real estate professionals (such as real estate agents, buyers’ agents and property developers);
dealers in precious stones, metals and products;
lawyers;
conveyancers;
accountants; and
trust and company service providers
need to be cognisant of the significant reforms underway in Australia's anti-money laundering and counter-terrorism financing (‘AML/CTF’) regime.
Who is AUSTRAC?
The Australian Transaction Reports and Analysis Centre (‘AUSTRAC’) is the federal government agency responsible for preventing money laundering, terrorism financing, and serious financial crime in Australia. It regulates entities under the AML/CTF Act and works closely with law enforcement, industry and government.
In 2025, AUSTRAC is leading the rollout of tranche two reforms, which bring certain service providers under the AML/CTF regime for the first time, something recommended by the global Financial Action Task Force (‘FATF’).
AUSTRAC tables new AML/CTF rules
On 29 August 2025, AUSTRAC tabled the new Anti-Money Laundering and Counter-Terrorism Financing Rules 2025 (‘AML/CTF Rules’) in Parliament, following the completion of its second round of consultation in June 2025. The new AML/CTF Rules will come into effect in different stages, including the following key dates:
31 March 2026: the amended AML/CTF regime will commence for current reporting entities (apart from threshold transaction reporting and suspicious matter reporting requirements, which will continue to operate in their current form until 2029);
31 March 2026: enrolment will open for newly regulated tranche two entities; and
1 July 2026: the amended AML/CTF regime will commence for tranche two entities.
The AML/CTF Rules are now spread across two instruments:
the AML/CTF Rules, containing additional general requirements that build on the amended AML/CTF Act; and
the Anti‑Money Laundering and Counter‑Terrorism Financing (Class Exemptions and Other Matters) Rules 2007 (Class Exemption Rules), which set out exemptions.
What is a tranche two entity?
From 1 July 2026, AML/CTF obligations will apply to certain services typically provided by the following professions and businesses, known as tranche two entities:
real estate (such as real estate agents and property developers);
dealers in precious stones and products;
lawyers;
conveyancers;
accountants; and
trust and company service providers.
From 31 March 2026 enrolment with AUSTRAC will be open for newly regulated tranche two entities.
Businesses already regulated by AUSTRAC
For those businesses that are already regulated by AUSTRAC, these entities must implement updated AML/CTF obligations, including enhanced customer due diligence and risk management. These currently regulated entities need to review and update their AML/CTF programs and policies to ensure they align with the new regime.
Conclusion
The next nine months will be critical for organisations to understand the scope of change regarding AML/CTF reforms.
Boards must act now by reviewing their AML/CTF programs, understanding the practical implications of the updated rules, and seeking external advice where needed. AUSTRAC will expect not just policy documents, but clear evidence that boards and senior management understand and are accountable for their updated AML/CTF obligations - these updated changes have been clearly and progressively announced since late 2024.
If your board does not yet have a compliance expert or governance professional who is experienced with AML/CTF compliance, I would like to offer your organisation guidance or support, whether by reviewing your current AML/CTF Program, advising or joining your Risk/Governance or Compliance Committee, or by joining your board sub-committee to help your board navigate these significant AML/CTF compliance changes.
AML/CTF reform is on its way and board-level leadership will be essential to navigating these important anti-money laundering reforms.
https://www.andrewsmcneil.com/