Chapter 9 - AML/CTF Reforms
Right now, there are large gaps in our financial system. The government is making changes to close these gaps that contribute to an environment where organised crime and professional money laundering organisations can inflict harm to individuals, businesses and communities.
The new laws simplify and modernise the AML/CTF regime. These changes to Australia’s anti-money laundering and counter-terrorism funding (AML/CTF) regime help us build a stronger, more proactive intelligence picture. In turn, we can deter, detect and disrupt money laundering and terrorism financing (ML/TF).
Watch this video from AUSTRAC to learn more about the reforms:
Key changes under the laws
As an existing financial services licensee, we fall under ‘Tranche 1’. These are entities that are already regulated under the AML/CTF Act prior to the reforms.
As a ‘Tranche 1 entity’, from 31 March 2026, we must transition to the new obligations framework, including:
A modernised, outcomes-based AML/CTF Program
Enhanced risk assessments
Updated customer due diligence (CDD) and enhanced CDD processes
Stronger governance, oversight and record-keeping expectations
How Do These Changes Affect Me?
Simply collecting a copy of your client’s ID is not sufficient to meet your obligations.
Before you collect your clients ID Documents, you must first complete a risk assessment. The outcome of the risk assessment then determines what documents you need to collect.
Refer to the image below for the new AML/CTF process.
Assess the risk of your client/s - determine whether your client is low risk or high risk
a) If low risk, conduct customer due diligence (CDD) before providing advice.
b) If high risk, conduct enhanced customer due diligence (CDD) for higher-risk clients and situations.
3. Maintain accurate records in accordance with statutory requirements
4. Reporting suspicious matters to AUSTRAC.
In the next lesson, we will look at the customer risk ratings and provide practical examples of low, medium and high-risk scenarios.
Learn More
You can learn more about the reforms on the AUSTRAC Website
