Modernising Australia's Financial Crime Framework

The Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024, which passed Parliament on 29 November 2024, represents the most significant update to Australia's financial crime laws in nearly two decades. These reforms are critical to ensuring Australia meets international standards set by the Financial Action Task Force (FATF) ahead of its 2026 evaluation of our system.

Without these changes, Australia risked being "grey-listed" by the FATF – a designation that could have serious economic consequences, potentially reducing GDP by up to 7.6% and foreign investment by 3% according to research cited by financial crime experts.

1. Expanding Regulation to Higher-Risk Sectors

For the first time, the AML/CTF regime will extend to professionals who often serve as gatekeepers to the financial system:

• Real estate agents involved in property transactions

• Lawyers and accountants providing certain financial and corporate services

• Dealers in precious metals and stones for transactions over $10,000

This extension, known as "Tranche Two" reforms, addresses a critical gap in Australia's financial crime defences that has been exploited by criminals seeking to launder money through these sectors.

2. Modernising Digital Currency Regulation

The legislation updates Australia's regulatory framework to address the growing role of virtual assets in the financial system:

• Extending AML/CTF obligations to businesses providing virtual asset services

• Creating a more consistent approach to regulating all forms of value transfer, whether traditional or digital

• Streamlining reporting requirements for international value transfers

These changes ensure that newer financial technologies face the same level of scrutiny as traditional financial services.

3. Simplifying and Clarifying Compliance Requirements

The Act moves away from prescriptive requirements to more flexible, risk-based and outcomes-focused obligations:

• Streamlining customer due diligence processes

• Clarifying how businesses should assess and manage their money laundering risks

• Creating more effective information-sharing provisions between regulated entities

• Updating the "tipping off" offense to prevent disclosures that could prejudice investigations

These reforms represent a crucial step in protecting Australia's financial system from criminal exploitation while ensuring we maintain our standing in the global financial community.

[1] https://minister.homeaffairs.gov.au/TonyBurke/Pages/australias-counter-terrorism-and-violent-extremism-strategy-launched.aspx

[2] https://www.nationalsecurity.gov.au/what-australia-is-doing-subsite/Files/australias-counter-terrorism-violent-extremism-strategy.pdf

[3] https://www.ag.gov.au/crime/anti-money-laundering-and-counter-terrorism-financing/anti-money-laundering-and-counter-terrorism-financing-amendment-act/overview-amlctf-amendment-act

[4] https://www.markdreyfus.com/media/media-releases/albanese-government-passes-landmark-reform-to-combat-money-laundering-terrorism-and-serious-crime-mark-dreyfus-kc-mp/

[5] https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/Bills_Search_Results/Result?bId=r7243