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Australia AML laws are undergoing their most significant overhaul in nearly two decades. The reforms to Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) regime introduce updated obligations for existing reporting entities and extend regulation to additional sectors, including certain legal, accounting, real estate, precious-metals and virtual-asset services. This guide explains Australia’s AML laws, the role of AUSTRAC, key AML/CTF obligations, and the major regulatory changes taking effect in 2026.
Overview of Australia's AML/CTF Regime
Serious and organised crime cost the Australian economy an estimated A$60.1 billion in 2020–21, including A$43.7 billion in direct costs and A$16.4 billion in prevention and response. The street value of four major illicit drugs consumed in Australia in 2023 alone reached A$12.4 billion, with proceeds likely laundered through legitimate financial channels. These figures make it clear why counter terrorism financing and money laundering laws sit at the centre of Australia’s national security architecture.
Australia’s anti-money laundering framework is governed by the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (the AML CTF Act), supported by the AML CTF Rules and administered by AUSTRAC, which serves as both regulator and financial intelligence unit. The AML CTF regime aims to maintain the integrity of Australia’s financial system and national security by forcing regulated businesses to effectively deter, detect, and disrupt money laundering, terrorism financing, and proliferation financing.
The framework aligns Australia with global standards set by the Financial Action Task Force (FATF), and Australia’s next FATF mutual evaluation is scheduled for 2026, driving urgency across every regulated sector. ZIGRAM works with regulated entities operating in or from Australia to help operationalise AML CTF obligations through RegTech tools covering transaction monitoring, screening, and risk assessment.
Key Legislation: AML/CTF Act, AML/CTF Rules and Related Laws
The legislative framework governing Australia’s AML CTF regime consists of several interconnected instruments that reporting entities must understand as a unified system.
The AML/CTF Act is the centrepiece. Its purpose is to deter, detect, and disrupt money laundering and counter terrorism financing by imposing obligations on businesses providing designated services with a geographical link to Australia. The Act embeds a risk-based approach, requiring entities to assess risks by customer type, product, delivery channel, and geography. Examples of designated services include deposit-taking, remittance, gambling, bullion trading, and digital currency exchange.
The AML/CTF Rules Instrument 2007 (No. 1) serves as subordinate legislation providing more detailed information on customer due diligence, ongoing monitoring, reporting, and AML CTF program governance. The latest consolidated version is maintained on the Federal Register of Legislation and continues to be updated as reforms progress.
The Financial Transaction Reports Act 1988 was repealed on 7 January 2025, with its obligations consolidated under the AML/CTF Act and associated rules to streamline regulations. Reporting entities must also factor in the Privacy Act 1988 (Cth) when handling customer data, beneficial ownership disclosures, and record keeping. Sanctions law and proceeds of crime legislation round out the ecosystem that compliance programs must address.
Core AML/CTF Obligations for Reporting Entities
Reporting entities are businesses that provide one or more designated services under the AML CTF Act. The legislation places strict operational requirements on these businesses, covering the following core categories:
Customer due diligence (CDD/KYC): Customer due diligence includes identifying and verifying the customer’s identity, confirming beneficial owners, and understanding the purpose and nature of the business relationship. Enhanced due diligence applies for high-risk customers; simplified procedures may apply in low-risk situations.
Ongoing monitoring: Regulated entities must perform ongoing monitoring of customer transactions to identify risks, update risk profiles, and detect unusual or suspicious criminal activity.
Reporting obligations: Reporting entities are required to report suspicious activities to assist law enforcement efforts. Businesses must report suspicious matters and threshold transactions to AUSTRAC. Transaction reporting includes required reports for physical cash transactions of $10,000 or more (TTRs), suspicious matter reports (SMRs), and IFTI reports for international fund transfers.
Record keeping: Comprehensive records of customer identification procedures must be maintained for a minimum of seven years.
AML/CTF program: Regulated businesses must have a tailored risk-based compliance program developed to manage financial crime risks, including governance by senior management, a compliance officer appointment, staff training, and independent review.
The AML/CTF Act applies a risk-based approach: entities must identify, assess, and manage money laundering and terrorist financing risks relevant to their products, services provided, delivery channels, and customer types. Digital currency exchange providers have been subject to the regime since 2017, and virtual asset service providers now face expanded obligations under the 2024–2026 reforms.
ZIGRAM tools such as Transact Comply for transaction monitoring, PreScreening.io for name screening, Entity Hero for entity risk scoring, and Dragnet Alpha for adverse media can automate these obligations consistently with AUSTRAC expectations.
2024–2026 Reform Program and the AML/CTF Amendment Bill 2024
Australia is modernising its AML CTF regime through a staged reform program. The AML/CTF Amendment Act passed on 29 November 2024, introducing the most comprehensive set of changes since the original Act. Key objectives include strengthening the regime against evolving threats, aligning with FATF international standards, and closing gaps that previously made Australia attractive for illicit funds.
The reform follows two major consultation rounds between April 2023 and June 2024 involving industry, government, and other stakeholders. Key commencement dates are:
7 January 2025: Repeal of the Financial Transaction Reports Act 1988.
31 March 2025: Changes to the tipping-off offence take effect, allowing some intra-group information sharing while protecting investigations.
31 March 2026: Customer due diligence changes commence on 31 March 2026 for current reporting entities, along with updated AML CTF rules and virtual asset sector changes. Enrolment opens for tranche 2 entities.
1 July 2026: New designated services are regulated from 1 July 2026. Businesses must conduct ML/TF risk assessments by the 2026 deadline. New AML CTF obligations begin for tranche 2 entities.
Recent reforms have expanded coverage of the AML CTF legislation to additional professional service sectors. Existing reporting entities must re-baseline their AML programs, risk assessments, systems, and reporting frameworks well ahead of these deadlines. AUSTRAC developed guidance for new AML CTF obligations, including sector-specific starter kits expected from October 2025 onward.
Expansion to Tranche 2 Professions and High-Risk Sectors
“Tranche 2” refers to designated non-financial businesses and professions identified by FATF as high risk for misuse. New designated services will trigger AML CTF obligations for businesses in these sectors, bringing them under AUSTRAC supervision for the first time.
Key sectors captured from 1 July 2026 include:
Real estate professionals (agents, property developers, buyer’s and seller’s agents)
Legal professionals will be included in AML CTF regulations from 2026 (lawyers, conveyancers)
Accountants and company service providers
Trust and company service providers
Dealers in precious metals and precious stones
Motor vehicle dealers
Real estate services are attractive for money laundering activities because criminals exploit real estate to launder proceeds of crime through layering and integration. The AML CTF Act mandates risk assessments for real estate businesses. Professional service providers face significant ML/TF risks when creating complex corporate structures, managing trust accounts, or handling settlement funds from opaque sources.
Sector-specific risk examples include:
Property purchases through shell companies to obscure beneficial ownership
Misuse of client accounts in law and accounting firms
Trade-based money laundering using precious metals and stones as portable stores of value
These new reporting entities will need scalable compliance technology from day one. ZIGRAM’s SaaS platform and managed services provide an out-of-the-box AML CTF solution tailored to tranche 2 sectors, covering KYB checks, entity due diligence, and ongoing monitoring.
AML/CTF Programs, Customer Due Diligence and Reporting in Practice
This section covers how AML/CTF obligations translate into concrete processes within a regulated business.
Under current rules, an AML/CTF program consists of Part A (governance, risk assessment, policies and procedures, training, independent review) and Part B (further customer identification procedures). Under the reforms, program requirements shift toward outcomes-based standards. Regulated entities’ increased compliance obligations are aimed at closing systemic gaps regarding financial crimes.
Customer due diligence in the Australian context involves identifying and verifying customers and beneficial owners, understanding the purpose of the business relationship, and applying appropriate measures based on risk level: simplified, standard, or enhanced diligence. The CDD exemption threshold for gambling lowers to $5,000 under the reforms. AUSTRAC will guide new AML/CTF obligations to help entities comply with updated CDD standards.
Core reporting obligations include:
SMRs: Filed when a reporting entity forms a suspicion on reasonable grounds about money laundering, terrorism financing, or other crime
TTRs: Required for cash transactions of $10,000 or more
IFTI reports: For international fund transfers, transitioning to International Value Transfer Service (IVTS) reporting under reforms
AUSTRAC’s new powers were introduced by the Amendment Act 2024, strengthening enforcement tools including civil penalties and enforceable undertakings.
Role of AUSTRAC and the Financial Action Task Force (FATF)
AUSTRAC regulates AML compliance in Australia and oversees compliance for designated services under the AML/CTF Act. AUSTRAC’s role includes acting as Australia’s financial intelligence unit, receiving and analysing reports (SMRs, TTRs, IFTI reports), issuing AML/CTF rules and guidance, and taking enforcement action against non-compliant entities. The AUSTRAC CEO has significant powers to direct compliance outcomes and pursue civil penalties.
The Financial Action Task Force sets international standards on money laundering and counter terrorism financing through its 40 Recommendations. Australia is a FATF member, and the 2026 mutual evaluation is the primary catalyst behind the current reform cycle. Previous evaluations criticised Australia’s lack of supervision over DNFBPs and the virtual asset sector. The reforms respond directly to these deficiencies, with implications for cross-border financial services and correspondent banking. Global firms using ZIGRAM’s RegTech stack can leverage the same infrastructure to evidence compliance with multiple FATF-aligned regimes, lowering the cost of multi-jurisdictional AML compliance.
Practical Compliance Challenges and How RegTech Can Help
Moving from legal requirements to effective controls is where most organisations struggle. Industry concerns centre on data fragmentation across systems, legacy transaction monitoring that generates excessive false positives, manual KYC processes, and difficulty keeping pace with evolving AML/CTF rules and AUSTRAC guidance.
A risk-based regime centred on outcomes rather than prescriptive checklists demands stronger data quality, continuous tuning of monitoring scenarios, and feedback loops tied to AUSTRAC enforcement trends. The provision of more detailed information through sector-specific guidance will help, but entities must also develop internal capability.
ZIGRAM’s key products map directly to these challenges:
PreScreening.io: Onboarding KYC, sanctions, and watchlist screening
Entity Hero: Entity and beneficial owner due diligence and risk scoring
Fraud Fighter: Fraud monitoring, behavioural anomalies, and hidden fraud networks
Transact Comply: Transaction monitoring, rule scenario management, and SMR workflows
Dragnet Alpha / SATOC: Adverse media and news surveillance
Doss Engine: Secure document interaction and audit trails
Crypto and ESG modules: Emerging risk domains for virtual asset service providers and ESG-linked financial crime
Australia’s AML CTF reforms represent a significant shift in how the law expects businesses to manage financial crime risks. Whether you are an existing reporting entity recalibrating your program or a tranche 2 entrant building from scratch, the implementation window is closing. Compliance officers, MLROs, and legal teams responsible for AML CTF compliance in Australia should consider booking a ZIGRAM demo to assess readiness for the 2026 reforms and modernise their AML CTF operating model before deadlines arrive.
