AML/CTF Independent Review – What AUSTRAC Requires and Why It Matters

Understand why AML/CTF Independent Reviews are mandatory under AUSTRAC’s Rules, who can conduct them, how often they're required, and how Click Legal can help ensure your program is compliant and effective.

Profile picture of Hannah Deuk

Hannah Deuk

19/05/2025

Stock Image in meeting room

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.

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 to set up a company

AML/CTF Independent Review

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?

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.

How Click Legal Supports Reporting Entities and AFSL Holders

At Click Legal, we conduct legally compliant, risk-based AML/CTF Independent Reviews for:

  • AFSL and credit licence holders
  • Wealth managers, remitters, and fintechs
  • Designated non-financial businesses and professions (DNFBPs)

Our reviews are:

  • Delivered by experienced financial services 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