AML/CTF Reforms in Australia | What Changes in 2026

Money laundering involves disguising the origins of illegally obtained funds to make them appear legitimate.  

To help prevent this from happening in Australia, the Government has introduced updates to the Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Amendment Act in 2026. The changes aim to close long-standing regulatory gaps and bring Australia in line with global standards and will affect the way thousands of businesses operate.  

Take a look at what the regulatory updates involve, who will be affected and how to ensure compliance in 2026 and beyond.  

Australia’s Approach to Money Laundering, Terrorism Financing and Proliferation

Businesses can unknowingly become facilitators for money laundering by handling funds or assets that are linked to criminal activity. 

Australia has faced criticism in the past for its failure to regulate certain high-risk sectors under its AML/CTF regime. Known as 'Tranche 2' entities, these include lawyers, accountants, real estate agents and jewellers.  Unlike banks and other financial institutions, these professions were previously not subject to direct AML obligations, despite being frequently exploited for money laundering. The intergovernmental Home Affairs and AUSTRAC sets global standards for combating money laundering and terrorism financing and has consistently flagged these gaps as a threat to the global financial system. Without legislative reform, Australia risked being formally assessed by the FATF as non-compliant. 

Beyond international pressure, the domestic case for reform has been strongly argued. Money laundering enables organised crime and terrorism financing, with recent research from the Australian Institute of Criminology showing a strong correlation between money laundering and the scale of crime-related harm within the community. 

AML reform: What is changing and when? 

From 1 July 2026, these sectors will be regulated under AML/CTF laws: 

• Legal professionals 

• Accountants 

• Real estate agents 

• Dealers in precious metals and stones 

• Trust and company service providers 

Impacted businesses will be required to enrol with AUSTRAC from 31 March 2026 and must be enrolled by 29 July 2026, with full AML/CTF compliance obligations commencing from 1 July 2026.

Other changes include:

• A clearer and modernised definition of ‘virtual assets’ (previously referred to as ‘digital currency’).

• Updates to customer due diligence (CDD), focusing on risk-based obligations.

• New rules for value transfers and updated reporting obligations.

• Repeal of the Financial Transaction Reports Act 1988, consolidating regulation under one framework.

Will AML laws affect your organisation? 

Around 90,000 new businesses are expected to fall under AML regulation as a result of the Tranche 2 reforms. 

Being regulated under the AML/CTF Act means you must: 

• Register with AUSTRAC 

• Implement an AML/CTF program tailored to your business 

• Conduct both initial and ongoing customer due diligence 

• Report suspicious matters and certain transactions 

• Maintain comprehensive records 
   

The Act also places increased responsibility on boards and senior management. Governance obligations now explicitly require governing bodies to take reasonable steps to manage AML/CTF risks across the business. 

For existing reporting entities such as banks and remitters, reforms mean changes to the way CDD is conducted, how value transfers are reported and how group-level compliance is managed. The new framework is more risk-based, offering flexibility in how obligations are met, but also requiring more active risk management and oversight. 

Check if your business may be included in AML/CTF reforms here.  

How to help prepare for AML reforms 

Tranche 2 businesses still have a few months to get ready and ensure compliance with AML reforms.  

Here’s what to prioritise: 

1. Identify if your services are designated 
   Review the full list of designated services under the updated AML/CTF Act. If you offer even one of these services, your business will be regulated. 
    

2. Get ready to enrol 
   New reporting entities must enrol with AUSTRAC between 31 March and 1 July 2026. You can access AUSTRAC’s guidance materials here. 
    

3. Build or adapt your AML/CTF program 
   Your program should include a business-wide risk assessment, tailored risk mitigation strategies and documented roles and responsibilities, taking an approach that is outcomes-focused and risk-responsive. 
    

4. Update/Implement CDD systems 
   CDD obligations will require identifying and verifying customers and understanding the risks associated with each client relationship. 
    

5. Train your team 
   Your staff will need practical training to understand red flags, reporting requirements and risk-based decision-making. Check AUSTRAC training and educational materials for more information. 
    

6. Collaborate with your industry body or a legal advisor 
   Many professional associations are participating in AUSTRAC-led working groups. These will help develop sector-specific guidance and clarify how general obligations apply to your business model. 

AUSTRAC has released AML/CTF Program Starter Kits to help newly regulated businesses build and maintain compliant AML/CTF programs — see if these resources apply to your business

AUSTRAC AML/CTF Transitional Rules – Key Updates

AUSTRAC and the Department of Home Affairs have announced draft transitional rules to support implementation of the AML/CTF reforms, deferring certain obligations for existing reporting entities.

Key points include:

• Initial CDD: Changes to initial CDD are deferred from 31 March 2026 to 30 March 2029, while ongoing CDD still commences on 31 March 2026. Entities must apply either the pre-reform ACIP or new section 28 CDD rules consistently during the transition.

• Compliance Officer: Notification to AUSTRAC is required by 30 May 2026.

• Independent Evaluations: Extended timeframes apply for entities that have recently completed an independent review.

• Registration Roll-over: Existing remitters and DCEs will not need to re-register with AUSTRAC.

• VASP Travel Rule: Deferred until 1 July 2026.

• IVTS: New International Value Transfer Service obligations are deferred until 2029.

Monoova Reinforces Commitment to Strong AML/CTF Compliance

Monoova reaffirms its dedication to maintaining a robust and market-leading financial crime compliance program. We will fully cooperate with AUSTRAC’s requirement for an independent audit of our AML/CTF program.

We are committed to the highest standards of regulatory compliance. Our controls are designed to address all key risks relevant to our business, ensuring our compliance framework is fit for purpose. This allows us to provide secure, reliable payment solutions that help businesses operate more efficiently. While our platform is fully compliant, we do not provide compliance services or advice to other businesses.

We provide secure, automated payment solutions that help businesses operate efficiently while staying AML/CTF compliant. Contact us to know more.

Frequently Asked Questions

What is AML and why does it matter? 

AML stands for anti-money laundering. It refers to laws, policies and procedures that aim to prevent criminals from disguising the origins of illicit funds. For Australian businesses, being included in AML regulations means having systems in place to spot and report suspicious financial activity. Without proper controls, your organisation risks being used to facilitate money laundering or terrorism financing. 

Who will Tranche 2 reforms affect? 

The latest reforms apply to thousands of businesses not previously covered by AML/CTF legislation. This includes real estate professionals, lawyers, accountants, dealers in precious metals and stones, and trust and company service providers. Virtual asset service providers and some businesses in the financial sector will also face updated obligations. 

How do I know if my business is affected by AML/CTF reforms in Australia? 

If your business provides any of the services newly classified as 'designated services' under the AML/CTF Act, you will be regulated. This applies regardless of your business size. You’ll find a checklist here.  

What are my responsibilities if my business is included in the AML reforms? 

You will need to enrol with AUSTRAC, assess your business's exposure to financial crime risk, create and maintain an AML/CTF program, verify customers’ identities, monitor transactions, report suspicious activity and retain records. Governance and oversight requirements will also apply at board or senior management level. 

When do the changes take effect? 

  Newly regulated businesses must enrol with AUSTRAC from 31 March 2026 and comply fully with the AML/CTF regime from 1 July 2026, with enrolment required no later than 29 July 2026. Visit AUSTRAC for more information.

AUSTRAC has also indicated that transitional rules will apply to aspects of the reforms, with some obligations deferred during the implementation period. Further guidance is expected in early 2026. 

What are the risks of non-compliance? 

Failing to meet AML/CTF obligations can lead to enforcement action by AUSTRAC, including civil penalties, reputational damage and loss of partnerships with financial institutions. In some cases, businesses may also face increased scrutiny or limitations from international partners.