Updated AML/CTF Regulatory Changes: Effective March 2026

Significant updated reforms to Australia’s Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) regime are coming into effect, introducing a more modern, risk-focused regulatory framework. According to AUSTRAC, these changes strengthen governance, additionally expand reporting obligations, also address proliferation financing risks, and moreover broaden the scope of regulated entities, with key milestones and compliance deadlines from 2026 onwards.

Below is a clear summary of the key regulatory changes and important dates reporting entities need to know.

1. Risk-Based AML/CTF Framework

The reforms shift AML/CTF compliance from a procedural, compliance-based model to a more risk-based and outcome-focused approach. Reporting entities must:

• Document and regularly review AML/TF/PF risk assessments
• Develop and maintain AML/CTF Policies (in addition to AML/CTF Programs)
• Ensure governing body oversight and regular compliance reporting

The separation of AML/CTF Programs into Part A and Part B will cease from 31 March 2026.

2. Proliferation Financing (PF)

From 31 March 2026, reporting entities must assess and manage proliferation financing risk, including:

• Identifying and mitigating PF exposure
• Applying enhanced due diligence for high-risk jurisdictions
• Updating internal policies where required

3. Customer Due Diligence (CDD)

These measures reinforce a risk-based approach to customer verification and ongoing monitoring, ensuring compliance with AML/CTF obligations.

• Revised Initial and Ongoing CDD requirements
• Enhanced Customer Due Diligence (ECDD) for high-risk customers (e.g. PEPs, complex transactions)
• Simplified CDD (SCDD) where low risk is appropriately documented
• New source of wealth and source of funds requirements

Transitional arrangements allow existing reporting entities up to 30 March 2029 to transition initial CDD processes, although ongoing CDD must comply from 31 March 2026.

4. Expanded reporting obligations

Updates include changes to:

• Suspicious Matter Reporting (expanded mandatory content)
• Threshold Transaction Reporting (including reduced gambling threshold)
• International Value Transfer Services (replacing IFTIs)
• Value transfer chain obligations (including virtual assets)

5. Governance and compliance requirements

To ensure robust oversight and accountability, the following governance and compliance measures are now required:

• Strengthened AML/CTF Compliance Officer requirements (management-level, Australian resident, fit and proper)
• Enhanced governing body oversight responsibilities
• Reporting group and lead entity obligations
• Independent evaluation requirements and staggered deadlines
• New annual AML/CTF compliance reporting to AUSTRAC

6. New designated services (Tranche 2 expansion)

Starting 1 July 2026, the regime expands to include additional high-risk sectors, including:

• Real estate professionals
• Dealers in precious metals and stones
• Professional service providers (lawyers, conveyancers, accountants, trust and company service providers)

Reporting entities must update AML/CTF programs, governance, and CDD to meet upcoming reforms. With key compliance milestones starting from 31 March 2026 and tranche 2 expansions from 1 July 2026, proactive planning is essential to ensure full compliance. For the most up-to-date guidance and resources, reporting entities can refer directly to AUSTRAC’s AML/CTF reform hub.