Australian Independent Compliance Solutions recently hosted the Brisbane Compliance Forum, featuring Jessica Smith, an Anti-Money Laundering (AML) specialist from Hamilton Locke. The event provided valuable insights for compliance professionals in AFSL and ACL entities, as well as other AML-designated service providers. Here are the key takeaways from Jessica Smith’s presentation:
Item 154 Clarification of the Exemption and Part B
The AML/CTF framework requires all reporting entities to have a comprehensive AML/CTF program in place. This program should outline how your organisation identifies, mitigates, and manages the risks of money laundering and terrorism financing. It is divided into Part A (Risk Management) and Part B (Customer Identification).
Changes to Process
The AML framework has shifted from a prescriptive checklist model to an outcomes-based approach. Entities must demonstrate how they achieve results in risk identification, mitigation, and governance. Customer due diligence (CDD) is now divided into two phases: initial CDD conducted before onboarding and ongoing monitoring, with sanctions checks being a critical component of the process.
Designations
The new AML framework expands the definitions of senior managers and beneficial owners, increasing accountability and the need for transparent governance. AUSTRAC has clarified that “senior managers” are not limited to executives in C-suite roles. All individuals with decision-making authority must be aware of and directly accountable for their AML/CTF obligations.
Mandatory appointment of a fit and proper AML/CTF compliance officer.
Obligations in the Act for Independent and Risk Reviews
Independent review requirements ensure that compliance programs are effective and aligned with regulatory expectations. Entities must conduct regular independent reviews of their AML/CTF programs to assess their effectiveness and identify areas for improvement.
Key Implementation Dates
- 31 March 2026:
- New AML/CTF obligations begin for current reporting entities.
- Enrolment opens for newly regulated sectors (Tranche 2).
- 1 July 2026:
- AML/CTF obligations commence for Tranche 2 entities, including:
- Real estate
- Accounting
- Legal services
- Trust and company services
- Precious metals and stones
- Virtual assets
- AML/CTF obligations commence for Tranche 2 entities, including:
Risks of Non-compliance
Failure to comply with the new rules can result in:
- Civil penalties and enforcement action from AUSTRAC.
- Reputational damage and loss of client trust.
- Operational disruption due to reactive compliance fixes.
- Increased scrutiny from regulators and partners.
AUSTRAC has made it clear: entities that ignore enrolment or are complicit in money laundering will be prioritised for enforcement.
How to Integrate the Changes Confidently
- Conduct a Gap Analysis
- Compare your current AML/CTF program with the new requirements to ensure compliance.
- Use AUSTRAC’s renumbering table.
- Update Policies & Procedures
- Align with the risk-based approach.
- Remove outdated references to Part A/B.
- Appoint a Compliance Officer
- Ensure they meet AUSTRAC’s “fit and proper” criteria.
- Train Your Team
- Focus on practical scenarios and risk awareness.
- Leverage Technology
- Automate CDD and reporting where possible.
- Communicate the Value
- Position compliance as a business enabler, not a cost.
- Highlight benefits:
- Stronger client trust
- Better institutional partnerships
- Reduced long-term risk
At AICS, we believe compliance should be practical, empowering, and strategic. These reforms are a chance to future-proof your business, not just tick boxes.
We’re here to help AFSLs, ACLs, and advisers:
- Interpret the new rules
- Build tailored AML/CTF programs
- Train teams with confidence
- Avoid costly missteps
Need more assistance? Contact our compliance team today at [email protected]
Resources
- New AML/CTF Rules | AUSTRAC
- Summary of changes for current reporting entities | AUSTRAC
- AUSTRAC regulatory expectations and priorities for 2025–26
- renumbering table
- Risk Assessment Overview
- Updated Guidance on ML/TF Risk Assessments
- Downloadable Risk Assessment Guide (PDF)
- AUSTRAC Compliance Officer Checklist (PDF)
- AUSTRAC Compliance Officer Guidance
For more information and resources, visit the AUSTRAC website.
