In a story published on Accountants Daily on 29 November 2024, accountants have been urged to start preparing for significant changes to their regulatory obligations under the Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Amendment Bill 2024.
Passed by parliament last week, this landmark legislation expands the AML/CTF regime to include high-risk services offered by accountants, lawyers, real estate professionals and other sectors. The new requirements mark an important step in Australia’s ongoing efforts to combat financial crime, but they also introduce new compliance challenges for the accounting profession.
What the AML/CTF Amendments Mean for Accountants
The newly expanded regime focuses on certain high-risk services provided by professionals, rather than applying blanket obligations to entire professions. For accountants, this means that those offering one or more of nine designated services—such as establishing companies or trusts, or managing client assets—will now be classified as reporting entities under the AML/CTF regime. Reporting entities are required to:
Conduct a Risk Assessment: Accountants must evaluate the risks posed by their clients, services, and business practices, including risks related to money laundering and terrorism financing.
Develop Policies and Procedures: Firms must create tailored policies to mitigate identified risks and ensure compliance with AML/CTF requirements.
Report Suspicious Activity: Any suspicious matters must be reported to AUSTRAC (the Australian Transaction Reports and Analysis Centre).
Enrol and Comply: Reporting entities must enrol with AUSTRAC by 31 March 2026 and achieve full compliance with the regime by 1 July 2026.
A Collaborative Approach to Implementation
AUSTRAC’s CEO, Brendan Thomas, described the passing of the bill as “historic,” highlighting its role in disrupting financial crime and reducing the harm caused by illegal activities such as drug trafficking, human trafficking and cybercrime. “The money being laundered is generated from illegal activities that cause up to $60.1 billion in harm to the Australian community,” Thomas said.
Thomas also emphasised AUSTRAC’s commitment to working closely with newly covered industries, including accountants. “We have already established strong relationships with the industry bodies affected by these changes,” he said. AUSTRAC has pledged to provide guidance and support to help accountants implement the new regime while keeping compliance costs as low as possible.
Industry Reactions
The expanded regime has been met with mixed reactions from the accounting profession. Chartered Accountants Australia and New Zealand (CA ANZ) welcomed the reforms as a step forward in meeting international compliance standards but stressed the importance of complementary measures to assist accountants. CEO Ainslie van Onselen noted the need for practical tools like a beneficial ownership register and free searches on ASIC’s registers to reduce costs and streamline compliance.
“CA ANZ will work closely with AUSTRAC to develop guidance and resources for accountants, ensuring they are well equipped to meet their obligations,” van Onselen said. She also praised the government for striking “an appropriate balance” between strengthening compliance and minimising unnecessary regulatory burdens, particularly for smaller firms.
CPA Australia echoed support for the reforms but flagged concerns about the potential for excessive costs. Regulations and standards lead Belinda Zohrab-McConnell highlighted the need for practical implementation to avoid undue burdens on accountants and their clients. “We are looking to the Attorney General and AUSTRAC to ensure that implementation is practical and not unreasonably costly,” she said.
Addressing Cost Concerns
Cost remains one of the most significant concerns raised during the consultation process. Treasury modeling estimates that compliance costs for accounting firms could reach $2.88 billion. Industry bodies have called for measures to reduce these expenses, including better integration of existing tools such as ASIC’s Director ID system and streamlined access to government data.
Van Onselen stressed that the government must continue to collaborate with the profession to ensure compliance remains practical and affordable. “Director IDs should be linked to their companies on ASIC registers to further minimize compliance costs and enhance the effectiveness of the AML/CTF regime,” she said.
Preparing for the New Regime
With the compliance deadlines of 31 March 2026 for enrolment and 1 July 2026 for full compliance, accountants who may fall under the new regime should start preparing now. This includes:
Reviewing Services: Determine whether your firm provides any of the designated high-risk services covered by the legislation.
Conducting Preliminary Risk Assessments: Identify potential risks related to your clients and services to start shaping your AML/CTF policies.
Engaging with Industry Bodies: Take advantage of resources and guidance being developed by AUSTRAC, CA ANZ, and CPA Australia.
Training Staff: Ensure that your team understands the new obligations and is prepared to implement them effectively.
Looking Ahead
The expansion of the AML/CTF regime is an important step in Australia’s fight against financial crime, bringing accountants into a critical role in identifying and mitigating risks.
However, as AUSTRAC and the government work to finalize the accompanying rules and guidance, collaboration with industry will be key to ensuring that the new system is both effective and practical.
By starting preparations early and leveraging available resources, accountants can navigate these changes successfully while continuing to deliver high-quality services to their clients.
WhiteLight AML Can Ease The Burden
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Our services include tailored AML/CTF program development, risk assessments, KYC/identity verification (IDV), ongoing due diligence and reporting, all designed to align with AUSTRAC requirements.
With a proven track record of supporting financial professionals, WhiteLight AML ensures compliance with minimal disruption, allowing accountants to focus on their core business while we handle the complexities of AML compliance.
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