What is the AML/CTF Act?
The Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) is Australian legislation designed to detect, deter, and disrupt money laundering and terrorism financing.
Purpose and Scope
The Act requires certain businesses (reporting entities) to implement controls that prevent criminals from misusing Australia's financial system:
Identify and verify customers before establishing relationships or conducting transactions
Monitor transactions for unusual or suspicious activity
Report suspicious matters to authorities
Maintain comprehensive records of customers, transactions, and compliance activities
Administration and Enforcement
AUSTRAC (Australian Transaction Reports and Analysis Centre) administers the Act, overseeing compliance, receiving reports, analyzing financial intelligence, and taking enforcement action when necessary.
Industry Coverage
Existing Coverage (Tranche 1): Financial institutions, gambling providers, bullion dealers, and money remitters
New Coverage (Tranche 2): Lawyers, accountants, real estate agents, conveyancers, and trust and company service providers when providing specified services
Why Do We Have AML and CTF Policies?
Protecting the Financial System
Money laundering allows criminals to disguise proceeds from serious crimes like drug trafficking, fraud, and organized crime. Terrorism financing enables terrorist organizations to fund their operations. Without effective controls, criminals can purchase assets with illicit funds, move money across borders undetected, and undermine legitimate businesses.
Creating Financial Transparency
AML/CTF policies create transparency that makes criminal activity harder to conceal. Proper identification, monitoring, and reporting procedures create audit trails for investigations, identify unusual patterns, deter criminal misuse of businesses, and enable authorities to trace and recover criminal proceeds.
Protecting Your Business
Effective AML/CTF frameworks protect your reputation, help manage risk by identifying problematic relationships, ensure business continuity by avoiding penalties and disruption, and fulfil your professional responsibility to prevent exploitation of your services.
Contributing to Community Safety
Your compliance efforts help disrupt criminal networks, prevent terrorism financing, support law enforcement investigations, maintain confidence in Australia's economy, and protect vulnerable individuals from exploitation. Combined with other reporting entities, your actions create comprehensive defence against financial crime benefiting all Australians.