Regulatory Background

Australia’s Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Act (introduced in 2006) is expanding under Tranche 2 Reforms, which passed on 29th November 2024. These amendments extend compliance obligations to professional service providers such as accountants, lawyers, real estate agents, and trust service providers.

• Firms must enrol with AUSTRAC from 31st March 2026
• Compliance is mandatory from 1st July 2026

Who Needs to Comply?

Accounting practices must comply if they provide designated services, including but not limited to:

1. Managing client funds (e.g. trust accounts, investments).
2. Trust and company formation services (e.g., setting up legal structures, concealing ownership).
3. Nominee services (acting as or arranging nominee directors, shareholders, or trustees).
4. Providing a registered office or correspondence address.
5. Engaging in financial transactions on behalf of clients (e.g., property purchases, business sales).

AML/CTF vs. TPB Proof of Identity (POI)

AML/CTF compliance goes beyond the Tax Practitioner Board’s (TPB) POI checks. It requires:

• A comprehensive compliance program
• Appointment of an AML/CTF Compliance Officer
• Regular staff training & independent reviews
• Annual compliance declarations to AUSTRAC

Building an AML/CTF Program

An AML/CTF Program must identify and mitigate risks based on:

• Customer profiles
• Services offered
• Delivery methods
• Foreign jurisdictions involved

Part A: Risk Assessment

This forms the foundation of your AML/CTF Program. It involves:

• Evaluating your firm’s exposure based on client types, services offered, delivery channels, and geographical risks
• Considering the nature and complexity of the business
• Identifying the likelihood and impact of potential money laundering or terrorism financing risks across different parts of your business
• Documenting how these risks are identified and managed

Part B: AML/CTF Policy

This outlines the procedures and controls your firm will implement to comply with AML/CTF obligations and mitigate the risks identified. It should include:

• Governance and oversight arrangements, including a designated AML/CTF Compliance Officer
• Staff training on AML/CTF risks, red flags, and internal procedures
• Customer identification and verification procedures, including how you verify clients and beneficial owners
• Ongoing customer due diligence and enhanced due diligence for higher-risk clients
• Transaction monitoring and suspicious matter reporting processes
• Screening processes for politically exposed persons (PEPs)
• Employee due diligence measures to ensure staff involved in AML/CTF processes are trustworthy and appropriately vetted

Getting Started

Accounting firms should begin planning now. FeeSynergy, in partnership with One AML, offers:

• RegTech solutions for identity verification (biometrics, document verification, AML checks)
• Consulting services for AML/CTF Program development
• Group-wide compliance frameworks for national accounting firms

Next Steps: Firms should assess their obligations and take action before the 2026 deadlines to avoid penalties. For a more in-depth explanation read our three part series beginning with Tranche 2 Reforms – What Accounting Firms Need to Know Now or contact FeeSynergy.

For more information from AUSTRAC, please click here.