Australian Government: Attorney-General's Department
Australian Government: Attorney-General's DepartmentAchieving a Just and Secure Society

AML/CTF legislation

The Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) received Royal Assent on 12 December 2006 and forms part of a legislative package that will implement reforms to Australia's AML/CTF regulatory regime.

The reforms are a major step towards:

  • bringing Australia into line with international standards, including standards set by the Financial Action Task Force (FATF), and
  • preventing and detecting money laundering and terrorism financing by meeting the needs of law enforcement agencies for targeted information about possible criminal activity and terrorism.

The AML/CTF Act covers the financial sector, gambling sector and bullion dealing and any other professionals or businesses that provide particular ‘designated services’. The AML/CTF Act imposes a number of obligations on businesses when they provide these designated services. These obligations include:

  • customer due diligence (identification, verification of identity and ongoing monitoring of transactions)
  • reporting (suspicious matters, threshold transactions and international funds transfer instructions)
  • record keeping, and
  • establishing and maintaining the AML/CTF program.

The AML/CTF Act implements a risk-based approach to regulation. Businesses will determine the way in which they meet their obligations based on their assessment of the risk of whether providing a designated service to a customer may facilitate money laundering or terrorism financing.

The AML/CTF Act sets out general principles and obligations. Details of how these obligations are to be carried out are set out in subordinate legislative Instruments known as the AML/CTF Rules.

Under the AML/CTF Act, the Australian Transaction Reports and Analysis Centre (AUSTRAC) (http://www.austrac.gov.au/) will continue its valuable role as Australia’s financial intelligence unit. Importantly, AUSTRAC now has an expanded role as the national AML/CTF regulator with supervisory, monitoring and enforcement functions over a diverse range of business sectors.

All relevant Rules have been finalised and registered by AUSTRAC and are now available on AUSTRAC’s web site www.austrac.gov.au.

The AML/CTF Act necessitates amendments to other legislation. The Anti-Money Laundering and Counter Terrorism Financing (Transitional Provisions and Consequential Amendments) Act 2006 makes these amendments.

A series of technical amendments to the AML/CTF Act were envisaged when it was passed. In order to not delay the implementation of the AML/CTF Act, the Australian Government made a decision to address these issues in subsequent legislation. The Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2007 makes these amendments.