Key Timeline Milestones
June 2025: Finalization of AML/CTF Rules
December 2025/January 2026: Finalization of Tranche 2 specific guidance + sector-specific starter packages
March 2026: AUSTRAC opens for enrolment of Tranche 2 entities
1 July 2026: AML/CTF obligations commence for Tranche 2 entities
Recommended Preparation Steps
1. Assess Your Current Position
Determine if your organization is a designated service provider using AUSTRAC's eligibility tool
Identify which specific designated services you provide (legal, accounting, corporate services, real estate)
2. Appoint an AML/CTF Compliance Officer (AMLCO)
Must be a fit and proper person domiciled in Australia
Responsible for day-to-day oversight, reporting suspicious matters, staff training, and conducting risk assessments
3. Conduct a Risk Assessment
Evaluate money laundering and terrorism financing risks specific to your practice
Consider customer types, services, delivery channels, geographic locations, and transaction patterns
Use a risk assessment matrix to evaluate likelihood and consequence
Document your findings thoroughly
4. Develop Your AML/CTF Program
Risk management framework:
Risk assessment procedures and senior management oversight
Compliance officer appointment and employee due diligence
Internal controls, governance, and independent review processes
Training programs and transaction monitoring procedures
2. Customer due diligence:
Customer and beneficial owner identification (KYC/KYB)
PEP and sanctions screening
Enhanced Due Diligence for high-risk customers
Ongoing monitoring and record-keeping (7 years minimum)
5. Implement Technology Solutions
Consider RegTech providers (VerifiMe) for identity verification, screening databases, transaction monitoring, and secure record-keeping
Review AUSTRAC's Guidance for engaging a RegTech
6. Start Collecting Customer Data Early
Begin building your Customer Due Diligence register now. Collect over 18 months rather than rushing near the deadline:
Full name, date of birth, address, government-issued ID documents
Beneficial ownership information and source of funds documentation
Benefits: Proactive compliance, risk mitigation, operational efficiency, and building trust with regulators
7. Train Your Staff
Ensure personnel understand AML/CTF risks, their responsibilities, obligations under the Act, consequences of non-compliance (penalties up to $21 million per contravention), how to identify suspicious activities, and reporting procedures.
8. Establish Reporting Procedures
Set up systems for:
Suspicious Matter Reports (SMRs): Within 24 hours (terrorism financing) or 3 business days (other)
Threshold Transaction Reports (TTRs): Physical currency AUD 10,000+ within 10 business days
International Funds Transfer Instructions (IFTIs): Within 10 business days
Annual Compliance Reports
9. Enroll with AUSTRAC (opens on 31 March 2026)
Complete the AUSTRAC Business Profile Form with details about services, business structure, key personnel, and financial statements. Note: enrollment applies to all designated service providers; registration is additional for remittance/digital currency exchange services only.
10. Conduct Independent Reviews
Arrange regular independent audits of your AML/CTF program. Reviewers must not have been involved in designing/implementing the policy (AMLCO excluded). Reviews should assess policy effectiveness, compliance, implementation, and organizational adherence.
11. Test Your Systems
Conduct trial runs before 1 July 2026 to identify operational issues, ensure technology integration, test reporting mechanisms, and verify record-keeping processes.
Important Considerations
Risks of Delaying:
Increased costs, compliance gaps, penalties, reputational damage, operational disruptions, and increased regulatory scrutiny
Your AML/CTF Program Requires Continuous Updates due to regulatory changes, technology evolution, global events, business changes, client profile shifts, and new services. Your policy will never be "set and fixed."
Additional Resources
AUSTRAC Homepage: austrac.gov.au
AML/CTF Act: AML/CTF Act | AUSTRAC
About Reforms: About the reforms | AUSTRAC
New Industries: New industries and services to be regulated | AUSTRAC
Disclaimer: This document provides general information about AML/CTF reform and should not be considered legal advice. Regulatory requirements are subject to change. Consult legal advisors and refer to official AUSTRAC guidance when developing your compliance framework.
For current information, visit: www.austrac.gov.au