Under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act), Australian reporting entities are required to adopt and maintain an AML/CTF Program. However, developing the Program is not enough.

AUSTRAC expects that Part A of the AML/CTF Program is reviewed independently and regularly.

An AML/CTF Independent Review provides an impartial assessment of whether:

• The Program has been adequately implemented
• It appropriately addresses money laundering (ML) and terrorism financing (TF) risks
• It complies with the AML/CTF Act and associated Rules

The requirement is set out in Rule 8.1.1(1)(g) of the AML/CTF Rules.

What is an AML/CTF Independent Review?

Under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act), Australian reporting entities are required to adopt and maintain an AML/CTF Program. However, developing the Program is not enough.

AUSTRAC expects that Part A of the AML/CTF Program is reviewed independently and regularly.

An AML/CTF Independent Review provides an impartial assessment of whether:

• The Program has been adequately implemented
• It appropriately addresses money laundering (ML) and terrorism financing (TF) risks
• It complies with the AML/CTF Act and associated Rules

The requirement is set out in Rule 8.1.1(1)(g) of the AML/CTF Rules.

How should an AML/CTF Review be Conducted?

The methodology should be agreed in advance with the reviewer and typically includes:

• Document review (including risk assessments, policies, and transaction monitoring procedures)
• Staff interviews
• Sample testing of designated services
• Analysis of training records and internal reporting processes
• Evaluation of governance structures and escalation protocols

A tailored, risk-based approach is essential — especially for financial services licensees with complex operations.

How often should Independent Reviews be Conducted?

Frequency of Independent Reviews

There is no fixed review period under the AML/CTF Act. However, Part A of your AML/CTF Program must specify review frequency, and AUSTRAC expects this to be regular and risk-based.

High-risk reporting entities should conduct an independent review at least every two to three years.

More frequent reviews may be required if there are:

• Structural changes (e.g. M&A, outsourcing compliance functions)
• New products, channels, or customer types
• Changes in ML/TF risk exposure
• A history of compliance issues or enforcement action
• Significant amendments to the Program since the last review

Why AML/CTF Independent Reviews are a regulatory priority

AUSTRAC’s enforcement actions increasingly focus on failures in implementation and governance. Several high-profile matters have involved entities with outdated or unreviewed AML/CTF Programs.

An independent review not only validates your compliance posture but also provides the board and senior management with a clear understanding of risks and remediation needs.

Who needs Independent review

Under the AML /CTF Act, a reporting entity is any business that provides a designated service listed in the Act, such as financial, gambling, bullion, or digital currency exchange services. These entities have key obligations, including registering with AUSTRAC, developing an AML/CTF program, conducting customer due diligence, and reporting transactions and suspicious activities. 

Who is considered a Reporting Entity?

A reporting entity is defined by the specific financial, gambling, bullion, or digital currency exchange services they offer, as outlined in Section 6 of the AML/CTF Act. 

If your business provides any of these designated services, you are likely required to have an AML/CTF Program and an independent review: 

• Financial advisory services 
• Remittance services 
• Gambling services 
• Digital currency exchange services 
• Motor vehicle dealership services 
• Bullion services 
• Lending services 
• Foreign currency exchange services

AUSTRAC’s enforcement actions increasingly focus on failures in implementation and governance. Several high-profile matters have involved entities with outdated or unreviewed AML/CTF Programs.

An independent review not only validates your compliance posture but also provides the board and senior management with a clear understanding of risks and remediation needs.

How Click Legal supports Reporting Entities

At Click Legal, we conduct expert AML/CTF reviews, audits, and consulting for Australian businesses across all industry sectors. Robust, cost-effective, affordable and seamless compliance solutions to meet AUSTRAC obligations.

Our reviews are:

• Delivered by experienced AML lawyers
• Structured for minimal internal disruption
• Offered on a fixed-fee basis
• Accompanied by clear, practical recommendations

We also assist with updating AML/CTF Programs in response to review findings — ensuring ongoing compliance with AUSTRAC’s evolving expectations.

Book Your Review

If you're unsure whether your AML/CTF Program is compliant or due for review, we're here to assist.

📩hello@clicklegal.com.au
📅 Book your complimentary 30-minute consultation

📞 +61 (0) 450 502 672

Our services includes:

• AML/CTF Independent Review and Solutions
• AUSTRAC compliance - AML/CTF Programs
• Money laundering risk assessment
• Tailored terrorism financing compliance procedures
• Procedures to comply with the AML/CTF obligations for AFSL holders
• We offer fixed-fee AML/CTF review