New AML/CTF Legislation: Accountants
The Australian Government is introducing significant reforms to its Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) framework. From 1 July 2026, accountants providing designated services will be required to enrol with AUSTRAC, the national financial intelligence agency. This article outlines the rationale behind the legislation, the obligations for accountants, and the steps required to ensure compliance.
Why the New Legislation?
Australia's AML/CTF laws aim to combat money laundering and terrorism financing, which pose serious threats to national security and the integrity of financial systems. International standards set by the Financial Action Task Force (FATF) require that designated non- financial businesses and professionals (these include accountants) implement preventative measures.
Accountants often handle transactions involving large sums of money, making them potential targets for misuse by criminals. By extending AML/CTF obligations to accountants, the government seeks to close regulatory gaps and enhance transparency.
What is the status of the new legislation?
The Anti-Money Laundering and Counter-Terrorism Financing Act was originally passed in 2006. The new provisions discussed in this article are generally referred to as “tranche 2”, and those new provisions have been passed by Parliament. However, many of the provisions which will affect accountants will not come into effect until 31 March 2026 or 1 July 2026. In this article we refer to the provisions which will come into effect in 2026 as “the New Act”.
As at the date of writing, the subsidiary legislation has not been passed. The subsidiary legislation will be important as much of the detail is to be included in the Rules.
How the Legislation Works
The New Act is structured so providing a designated service causes the provider (in this case the accounting firm) to be subject to the requirements of the New Act. For this reason, accountants may consider carefully if they wish to provide designated services.
What Designated Services?
Designated services are set out in section 6 of the New Act. Because the wording of these activities will be important for accountants, the relevant part of section 6 is reproduced at the end of this article.
There are many services which accountants commonly provide which would satisfy the definition of designated services. In simple summary, these would be at least
assisting or acting in the selling or buying of real estate
assisting or acting in the selling or buying of a company (It is not clear if this extends to an interest in a company, or if only sales or purchases of 100% of the shares in a company are captured)
assisting or acting in a transaction for equity or debt financing
assisting or acting in the creation of a company or legal arrangement (this would likely include trusts, partnerships and joint ventures)
acting as or arranging for another person to hold a position in an entity, for example directors and secretaries of a company, partners in a partnership, trustees of a trust and so on
acting or arranging for another person to act as a nominee shareholder
providing a registered office address or principal place of business of a company or other legal entity
An activity is only a designated service if it is done in the course of carrying on a business, and in some cases provided it is not pursuant to or resulting from a court or tribunal order.
If you provide any of these services on or after 1 July 2026, you will be classified as a reporting entity and must comply with the AML/CTF obligations.
Key Obligations for Accountants
Accountants providing designated services will need to:
Enrol with AUSTRAC: Registration is mandatory and must be completed by 1 July 2026.
Appoint an AML/CTF Compliance Officer: This individual, who must be employed or engaged at a management level (who can be an existing senior level employee or proprietor), will oversee compliance with AML/CTF laws and liaise with AUSTRAC.
Develop an AML/CTF Program: This program must outline how your firm will identify, mitigate, and manage risks associated with money laundering and terrorism financing.
Conduct Customer Due Diligence (CDD): Verify the identity of clients and assess the risk of their transactions.
Report Suspicious Activities: Notify AUSTRAC of any transactions or activities that raise suspicion.
Maintain Records: Keep detailed records of transactions, client identification, and compliance measures.
Ongoing Compliance Obligations
Compliance does not end with enrolment. Accountants must regularly review and update their AML/CTF programs and consider their clients and employees to address emerging risks.
It seems very likely that AUSTRAC will also require periodic compliance reports.
Failure to comply can result in significant penalties, both financial and reputational.
Penalties
Financial penalties for AML/CTF can be extreme. As a result of contraventions of the AML/CTF Act, Westpac was ordered to pay a civil penalty of $1.3 billion, Crown Melbourne and Crown Perth were ordered to pay penalties of $450 million, TAB was ordered to pay $45 million.
More likely civil penalties will be around $20,000 (where the entity admits fault and agrees to pay the penalty without requiring litigation with AUSTRAC).
What Accounting Services will be Captured?
Many accounting firms will be captured.
There are some exceptions, provided these are carefully managed. These could be auditing, tax compliance work, and bookkeeping.
Services which many accountants commonly provide will be captured. Some of these will be
Business advisory
Succession planning
Business structuring and restructuring
SMSF establishment and structure advice
Registered office services
Firms will need to determine what services they wish to continue to provide. In some ways this may be similar to the decision many accounting firms have made in recent years as to whether they will continue to provide financial advice. Many accounting firms have already relinquished their Australian financial services licence or authorisations because the administrative work associated with that was too onerous.
An obvious question for many accounting firms is whether to continue providing registered office or principal place of business services, if they are not providing other services which will bring them within the AML/CTF net.
Preparing for the Changes
To prepare for these changes, accountants will need to:
Familiarise themselves with the AML/CTF Act and AUSTRAC's guidelines.
Identify whether their services fall under the category of designated services.
Appoint a qualified AML/CTF compliance officer and allocate resources for compliance.
Develop and implement a robust AML/CTF program tailored to their practice.
We can help you with all of these requirements. As at the date of writing, it’s probably too early to take any helpful practical steps because the subsidiary legislation has not been passed. However, it’s worth thinking about the steps to be taken. We recommend accounting firms start planning in around September 2025.
Please email us if you would like to receive our updates on AML/CTF.
We are an Australian law firm, practising in financial services law. We understand the issues you will face, because we have been involved in the AML/CTF area since 2010, due to our financial services work. Our managing director has worked in house at two accounting firms, and been legal counsel for one, so our understanding of accounting firms is strong.
Conclusion
The new AML/CTF legislation represents a pivotal shift for the accounting profession in Australia and will impose a further level of administrative work on accounting firms, especially if they continue to provide designated services.
Our Commitment to Supporting Accountants
As a firm that has been providing AML/CTF services since 2010, we understand the complexities of navigating the regulatory requirements. We will continue to provide updates as the detailed rules and requirements are finalised, to help ensure smooth transitions and compliance within the accounting sector.
If you'd like to receive further updates and insights about these changes, please email us to join our mailing list.
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