Greg Kilminster
Head of Product - Content
Australia’s financial intelligence agency, AUSTRAC, has outlined its regulatory expectations for businesses preparing to implement reforms to the Anti-Money Laundering and Counter-Terrorism Financing Act 2006, which come into effect in 2026. The regulator has confirmed a phased implementation: 31 March 2026 for currently regulated entities, and 1 July 2026 for newly regulated sectors, including legal, accounting, real estate and jewellery businesses.
The announcement comes as Australia prepares for its next mutual evaluation by the Financial Action Task Force (FATF), scheduled to begin next year.
Some context
The updated legislation strengthens Australia’s AML/CTF framework by extending coverage to previously exempt sectors and placing greater emphasis on the identification and management of financial crime risks. AUSTRAC said it recognises the “tight” timeframes set by Parliament and acknowledged the challenges facing both existing and newly regulated businesses.
“Our primary goal is keeping Australia safe from criminal harm,” the regulator said. “We do not expect perfection on day one, but we do expect businesses to focus on reducing money laundering risk.”
The reforms come amid growing international pressure for Australia to bring its AML regime into line with global standards. AUSTRAC is recalibrating its regulatory approach accordingly, shifting focus towards real-world financial crime harms, including terrorism and proliferation financing.
Key takeaways
- Risk-based implementation required: AUSTRAC is urging all businesses to adopt a genuine risk-based approach and avoid what it called “the impression of compliance” without substance. “The core principles of identifying, mitigating and managing risk remain unchanged,” it said.
- For currently regulated entities, AUSTRAC expects:
- Continuation of existing money laundering controls.
- Implementation plans aligned to ML/TF/PF risks.
- Evidence of sustained progress.
- Short-term tactical improvements, where appropriate.
- Immediate efforts to strengthen frameworks, systems and processes.
The regulator also made clear that firms with ineffective systems must act now. “Failing to manage your ML/TF risk is a serious regulatory concern now and will be a serious concern when the reforms commence.”
- Expectations for newly regulated sectors: From 1 July 2026, newly regulated entities will be expected to:
- Enrol as reporting entities (enrolment opens 31 March 2026).
- Adopt or develop an AML program (a “starter program” will be available from December 2025).
- Appoint an AML/CTF Compliance Officer.
- Train staff on AML procedures.
- Be able to report suspicious activity and ask relevant client questions.
AUSTRAC acknowledged that AML obligations are unfamiliar territory for many new entrants. “We do not expect newly regulated businesses to be perfect,” it said. “We do expect honest efforts to meet your obligations and report suspicions.”
- Enforcement to focus on wilful non-compliance: While education and support will be provided ahead of implementation, AUSTRAC confirmed it will direct enforcement action post-implementation at those who fail to enrol or are “wilfully blind” to money laundering activities within their business.
Next steps
AUSTRAC will release further guidance in July 2025, including:
- Its regulatory priorities for 2025–26.
- A detailed timeline setting out monthly implementation expectations.
The timeline is intended to help businesses structure their preparation, with input drawn from industry associations and coordinated with other government reforms. “We are committed to setting newly regulated businesses up for success,” AUSTRAC said. “By working together to co-design the implementation, we can reduce the risk of money laundering and the harms that arise from it.”