The AML/CTF Amendment Bill 2024
On 29 November 2024, Parliament passed the Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2024 (Bill) to amend the current AML/CTF Act. The Bill includes reforms on customer due diligence, tipping-off offences (aimed at preventing disclosure of suspicious matter reports (SMRs) on AML/CTF activities), and the addition of new designated service providers who will be subject to the AML/CTF obligations. The amendments will commence on various dates from early 2026.
Lawyers, precious stones, and metals dealers have been added to the list of new reporting entities (Tranche 2 entities). Accountants and real estate agents are also among the professional service providers captured by the proposed Bill as Tranche 2 entities.
The amendments raised concerns regarding the financial and administrative burden on the Tranche 2 entities and the potential impact on their business activities that would eventually cost the economy. Implementation of the changes could cost accountants an extra A$3.6 billion and real estate agents A$5.9 billion in regulatory burden¹. The total regulatory costs were estimated at a whopping A$13.9 billion over the next ten years.
The Real Estate Institute of Australia (REIA) warily drew on the experience in New Zealand, where businesses had observed an additional NZ$30,000 to NZ$100,000 in implementation costs per agency². The Certified Practising Accountant (CPA) Australia was also informed by our neighbouring country’s industry leaders. Implementing compliance protocols is costly, duplicative, time-consuming, and businesses were not prepared³.
Nevertheless, costs are the least of the committee’s concerns. Australia has been very close to being grey-listed by the Financial Action Task Force—the global financial watchdog—as a high-risk jurisdiction for money laundering and terrorism financing.
As the obligations in the Bill approach becoming law, it is now time to be up to date and compliant.
Providing a ‘Designated Service’
The first starting point to determine whether the regime applies to a business is to understand whether your business is providing what are considered ‘designated services’.
Services outside these parameters do not attract AML/CTF obligations, and certain specific exemptions exist. Planning the steps that lead to the provision of such services can also be regulated.
Examples of services provided by accountants and real estate professionals under the new regime include the following:
Accountants:
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Services to assist a customer in buying, selling or transferring real estate or a corporate body, regardless of its structure and nature, e.g. including shelf companies.
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Managing clients’ funds (other than sums paid for professional service) or other assets.
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Organisation of contributions for the creation, operation or management of companies.
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Advising on business structuring, cash-flow management, and tax planning.
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Acting as a formation agent of legal persons or legal arrangements.
Real Estate Agents & Property Developers:
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Brokering the buying, selling and transferring of real estate.
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Managing clients’ funds (other than sums paid for professional service) or other assets.
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Engaging in or giving instructions on behalf of a customer to another person or engaging in conveyancing activities.
What are the Key AML/CTF Obligations?
Accountants and real estate professionals who provide ‘designated services’ will be required to implement measures and comply with the following obligations:
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Enrol as a ‘reporting entity’ with AUSTRAC.
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Lodge annual returns with AUSTRAC.
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Develop and maintain an AML/CTF program comprised of an AML/CTF risk assessment and AML/CTF policies.
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Undertake initial, ongoing and, where applicable, enhanced customer due diligence (CDD), including the initial verification of the identity of a prospective customer, identifying the ultimate beneficial owner of customers which are not individuals, checking whether individual customers are ‘politically exposed persons’ and undertaking additional due diligence if they are.
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Monitor transactions.
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Report suspicious matters and activities.
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Record-keeping.
Accountants
The profession already has substantial CDD and KYC, and reporting obligations are in place as members are heavily regulated.
CPA Australia, IPA, and CA welcome the regime. However, they raised concerns with the Attorney-General that there would be duplications of their existing obligations, such as those prescribed by the Accounting Professional & Ethical Standards Board, the Tax Practitioners Board and those required for financial institutions’ activities. This would add unnecessary cost burdens and cause confusion in implementation and compliance⁴.
Accounting bodies have recommended that there be streamlined sector risk assessment templates and clearer industry-specific guides.
Real Estate Agents
The REIA also raised the same concerns as the accounting bodies regarding duplication of obligations with other existing designated service providers, such as banks, and upcoming new stakeholders, such as lawyers and conveyancers⁵.
However, the industry is less heavily regulated. State laws prescribe more general obligations, such as agents’ being required to act with due skill, care, and diligence and to act ethically and honestly.
Real estate professionals are considered the best placed to detect high-risk transactions from the outset. They would be expected to know first-hand if the client is oddly nonchalant about the property, its price or acting under the directions of another person. All of which can signal risks.
The changes will proceed with some reliefs for franchised real estate groups. The Bill seeks to streamline general AML/CTF obligations, allowing a group to be formed when at least one member of a business group provides designated services⁶.
CDD Obligations Relief for Pre-Commencement Customers
New customers who engage with designated service providers starting from July 1, 2026, and who do not possess an existing business relationship of a certain duration with the designated service providers will be exempt from initial and ongoing Customer Due Diligence (CDD) obligations.
However, reporting entities will still need to monitor for suspicious transactions or activities, regularly update and review their KYC information regarding the customer, and monitor significant changes in the business relationship.
What’s Next?
Time and financial resources continue to pose significant challenges for the new reporting entities as they implement the changes.
Additional information regarding the practical implementation of the new regime is anticipated to be provided in the AML/CTF Rules. AUSTRAC will also develop industry-specific guides to assist newly reporting entities in their integration into the regime and ensure ongoing compliance.
How can Madison Marcus help you?
If you need advice or assistance in understanding whether the new changes apply to your business or how to implement these changes, Madison Marcus is here to help. Our Financial Services Division possesses extensive experience in AML/CTF matters, engagement with AUSTRAC and other regulators, and ongoing compliance management.
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¹ Paul Fletcher MP, Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2024, Second Reading Speech, 8 October 2024.
² Real Estate Institute of Australia, Media Release: Money Laundering Response (Media Release, 20 April 2023) https://reia.com.au/wp-content/uploads/2023/04/REIA-MEDIA-RELEASE_MONEY-LAUNDERING-RESPONSE_200423.pdf.
³ CPA Australia, Stage Two AML Reforms on Accountants’ Agenda (Website, 2023) https://www.cpaaustralia.com.au/public-practice/inpractice/accounting-finance-and-regulation/stage-two-aml-reforms-on-accountants-agenda.
⁴ CPA Australia, Joint Submission on Modernisation of the Anti-Money Laundering and Counter-Terrorism Financing Regime, 16 June 2023.
⁵ Real Estate Institute of Australia, Modernising Australia’s anti-money laundering and counter-terrorism financing regime (submission), June 2023.
⁶ Parliament of the Commonwealth of Australia, Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2024: Explanatory Memorandum (2024), Schedule 1 Item 13.
