AUSTRAC Seeks Industry Feedback on Major AML/CTF Rule Overhaul: What It Means for Regulated Entities

Australia’s financial crime watchdog, AUSTRAC, has launched a second round of public consultation as it moves to finalise sweeping amendments to the country’s Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Rules. This second consultation, open until 27 June 2025, seeks critical industry input before the rules are finalised in August 2025.

These reforms are designed to implement updates to the AML/CTF Act 2006 and reflect Australia’s commitment to aligning with evolving global standards while reducing compliance burdens on reporting entities.

Key Updates: Who's Affected and What's Changing

The proposed AML/CTF rule overhaul expands the regime to include a wider range of non-financial businesses and professions, such as:

• Real estate professionals

• Dealers in precious metals and stones

• Professional services firms (such as legal, accounting, and corporate service providers)

The draft rules also address the need for modernisation in regulating virtual assets, payments technologies, and value transfer services—a clear nod to the rise of digital financial ecosystems across Australia and globally.

Greater Flexibility for Regulated Entities

AUSTRAC’s updated proposals include several changes designed to make compliance more practical for industry stakeholders, particularly in high-volume or complex transaction environments:

• Delayed PEP & Sanctions Checks: Reporting entities may now verify a customer's PEP or sanctions status after the commencement of services, provided all other identity requirements are fulfilled.

• CDD Delays for Real Estate: Real estate agents and conveyancers can delay initial customer due diligence (CDD) until before settlement, offering relief from the previous requirement to conduct CDD at the start of the transaction.

• Shared KYC Information: Entities involved in the same real estate transaction (including agents, conveyancers, and financial institutions) will be permitted to rely on one another’s KYC data, reducing duplication and streamlining compliance.

Areas Open for Further Feedback

In addition to the above, AUSTRAC is inviting detailed industry feedback on several crucial areas:

• Definitions of Value Transfer Services: Clarification is sought on what constitutes an “ordering” or “beneficiary” institution in the context of cross-border transfers.

• Financial Sanctions Compliance: A new requirement proposes integrating sanctions policies directly into AML/CTF programmes to ensure entities do not inadvertently breach targeted financial sanctions.

• Reporting Requirements: AUSTRAC is reviewing expectations for threshold transaction reports, suspicious matter reports (SMRs), and entity enrolment information.

What’s Next?

Following extensive industry input from the first consultation in late 2024, AUSTRAC has already revised key areas, such as:

• Broader permissions for delayed initial CDD

• Flexibility in determining lead entities within reporting groups

• Drafting an exposure paper on class exemptions, which is also open for comment

This second consultation is a crucial opportunity for industry stakeholders—especially those newly captured under the expanded AML/CTF regime—to influence how the rules are implemented.

TrustSphere’s Take: Action Required Now

For reporting entities in Australia’s financial and non-financial sectors, this is a pivotal moment. The expansion of the AML/CTF regime signals a shift in compliance expectations, particularly for real estate, legal, and accounting sectors that may not have historically operated under such obligations.

At TrustSphere, we encourage financial institutions, payments providers, RegTech firms, and professional services to:

1. Review the exposure drafts in detail.

2. Submit structured feedback to AUSTRAC before 27 June 2025.

3. Evaluate your current AML/CTF programme, including how sanctions compliance and CDD processes will need to adapt.

4. Consider the implications of shared KYC across partners and reporting entities to improve efficiency and compliance alignment.

   
   

Want to understand how these reforms impact your compliance stack or client onboarding process?

TrustSphere helps organizations across APAC future-proof their AML/CTF frameworks and implement RegTech solutions that align with regional regulatory shifts. To learn more about how Technology can be used to meet regulations and ensure greater business efficiency and profitability please reach out to schedule a discussion.