Overview of the AML/CTF Amendment Bill

The Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Amendment Bill, introduced to Parliament on September 11, 2024, aims to enhance Australia’s AML/CTF framework. If enacted, it will amend the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) to better prevent, detect, and disrupt money laundering and terrorism financing, aligning with international standards set by the Financial Action Task Force.

The Bill has three primary objectives:

1. Extend Coverage: Broaden the AML/CTF regime to include additional high-risk services provided by tranche two entities.
2. Modernize Regulation: Update regulations for digital currency and virtual asset and payments technologies.
3. Streamline and Clarify: Simplify the AML/CTF regime to improve flexibility, reduce regulatory impacts, and help businesses more effectively combat financial crime.

Australia remains a target for serious and organized crime, with risks including terrorism financing and weapons proliferation. Without significant reforms, the AML/CTF regime may become increasingly ineffective, and the costs of inaction could be substantial.

The Bill’s development followed extensive consultations with affected sectors, national security, law enforcement, and regulatory agencies, gathering over 270 submissions and conducting over 100 stakeholder meetings from April 2023 to June 2024.

For detailed information, refer to the Bill and its explanatory materials on the Parliament of Australia website.

Key Measures

The Bill includes several reforms:

• Regulating High-Risk Services: New measures for additional high-risk sectors.
• Virtual Assets: Updated regulations for digital currency and virtual asset technologies.
• Financial Sector: Changes to AML/CTF program requirements and customer due diligence.
• Tipping Off Offence: Amendments to related offenses.
• Repeal of the Financial Transaction Reports Act 1988
• AUSTRAC Powers: Expanded information-gathering powers.

Regulated Entities

The AML/CTF regime will use a ‘designated services’ model for regulation. Only businesses providing specific designated services will be regulated under the new framework. Businesses must implement measures to guard against criminal exploitation and fulfill key AML/CTF obligations, including:

• Enrolling with AUSTRAC.
• Developing and maintaining a tailored AML/CTF program.
• Conducting initial and ongoing customer due diligence.
• Reporting certain transactions and suspicious activities.
• Keeping detailed records.

The reforms aim to minimize regulatory burdens while enhancing the regime’s effectiveness. The full Impact Analysis, available on the Office of Impact Analysis website, highlights the significant benefits of the reforms compared to the covert nature and challenges of quantifying money laundering costs.

What’s Next?

• Consultation on AML/CTF Rules: AUSTRAC will consult on draft amendments to the AML/CTF Rules before the end of 2024. Updates will be available on the AUSTRAC website.
• Guidance and Education: AUSTRAC will develop sector-specific guidance and education resources to assist regulated entities in implementing the new measures.
• Mutual Evaluation: Australia’s next evaluation by the Financial Action Task Force is set for 2026, assessing the effectiveness of the AML/CTF measures.

For further details, consult the AUSTRAC website and the Attorney‑General’s Department’s coordination efforts in preparation for the evaluation.