On 11 September 2024, the Commonwealth Attorney-General introduced the Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2024. This Bill aims to strengthen Australia’s existing AML/CTF regime, bringing it in line with international standards set by the Financial Action Task Force (FATF).
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On 11 September 2024, the Commonwealth Attorney-General introduced the Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2024. This Bill aims to strengthen Australia’s existing AML/CTF regime, bringing it in line with international standards set by the Financial Action Task Force (FATF). The proposed legislation follows extensive consultations with industry sectors, law enforcement and regulatory bodies, addressing gaps in the current framework.
The Bill has three main objectives: expanding regulatory coverage to high-risk sectors, modernizing rules related to virtual assets and simplifying the existing AML/CTF system. The expansion brings real estate professionals, certain legal and accounting professionals and dealers in precious metals and stones (referred to as ‘Tranche 2’ entities) under AML/CTF oversight. However, obligations will only apply to those providing designated high-risk services. The Bill also introduces regulations for virtual asset service providers, broadening the definition of “digital currency” to “virtual assets” to cover various digital assets, including stablecoins and NFTs.
One of the major changes is the requirement for businesses to reassess and enhance their AML/CTF programs. Governing bodies, such as boards and senior management, must actively oversee how money laundering and terrorism financing risks are managed. New risk assessment procedures must be implemented and the roles of compliance officers will need to be clearly defined particularly in managing these risks.
Customer due diligence (CDD) requirements will become more rigorous, with entities required to assign risk ratings to all clients. These ratings will dictate whether simplified or enhanced due diligence measures are needed, both at the start and throughout the client relationship. This new approach aims to ensure continuous monitoring of client activities and risk.
Additionally, the Bill proposes changes to financial transaction reporting. It simplifies the current system by consolidating the funds transfer chain into a single framework for value transfers, including international value transfer services. This move seeks to align Australia’s regulations with global best practices, particularly in the context of cross-border transactions.
Another notable change is the adjustment to the “tipping off” offence, which traditionally restricted information sharing to avoid compromising investigations. The new provisions would permit entities to share information internally to better manage financial crime risks, as long as it does not interfere with law enforcement actions.
The Bill also replaces the existing concept of a “designated business group” with a “reporting group”, assigning greater responsibility to the lead entity of the group for ensuring compliance across the group.
The proposed changes are set to take effect by 31 March 2026, allowing time for businesses to adapt to the new requirements. As further amendments to the AML/CTF Rules are expected by the end of 2024, businesses are encouraged to begin reviewing their compliance processes now to ensure they meet the updated standards by the target date.
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