What is an AML/CTF Program and Who Needs One?
An Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Program is a comprehensive, risk-based plan that helps businesses identify, mitigate, and manage the risks of money laundering, terrorism financing, and proliferation financing. Any business that provides designated services under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 must have a compliant Program in place. This includes financial services providers, remitters, digital currency exchanges, casinos, bullion dealers, lenders, and soon — under the Tranche 2 reforms — lawyers, accountants, real estate agents, and other professional sectors.
AUSTRAC (the Australian Transaction Reports and Analysis Centre) provides the authoritative guidance for compliance:
An AML/CTF Program typically includes a risk assessment, customer due diligence, enhanced due diligence, transaction monitoring, reporting, record-keeping, training, and independent review. It ensures businesses can meet their regulatory obligations and reduce exposure to financial crime and regulatory penalties.
Why an AML/CTF Program Matters
A robust Program supports businesses to:
- Protect against money laundering, terrorism financing, and proliferation financing risks
- Meet AUSTRAC compliance and reporting obligations
- Avoid civil penalties and enforcement action
- Demonstrate governance and risk maturity
- Build trust with regulators, clients, and partners
It is a statutory requirement, not optional.
How to Build an AML/CTF Program
Developing an AML/CTF Program requires a structured, risk-based approach aligned to AUSTRAC’s expectations.
1. Conduct an AML/CTF Risk Assessment
Your ML/TF/PF risk assessment forms the foundation of the Program. It must analyse:
- Customer types
- Products and services
- Delivery channels
- Geographic exposure
- Transaction patterns
- Emerging technologies, including AI systems
A strong assessment identifies inherent risks, evaluates likelihood and consequence, and documents the controls used to mitigate risks.
2. Establish Policies and Procedures
Your Program must include documented policies and procedures for:
- Customer Due Diligence (CDD)
- Enhanced Due Diligence (ECDD) for high-risk customers
- Ongoing due diligence and periodic reviews
- Transaction monitoring and red-flag detection
- Suspicious Matter Reports (SMRs)
- Threshold Transaction Reports (TTRs)
- International Value Transfer Service (IVTS) reports
- Record-keeping
- Onboarding workflows and escalation processes
Policies must be operational, risk-aligned, and regularly reviewed.
3. Implement Systems and Controls
Effective AML/CTF Programs rely on systems that may be manual, automated, or hybrid:
- Transaction monitoring systems
- Screening tools (sanctions, PEP, adverse media)
- Reporting mechanisms aligned with AUSTRAC formats
- Audit trails and workflow oversight
- Controls integrated with AI-enabled risk systems
Systems must be appropriate for your size, nature, and complexity.
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4. Train Employees
Training must be:
- Role-specific
- Regularly delivered
- Documented
- Tailored to your business’s ML/TF/PF risks
Training should cover obligations, red flags, internal processes, and escalation protocols.
5. Conduct Independent Reviews
All AML/CTF Programs require regular independent reviews to assess:
- Design adequacy
- Control effectiveness
- Operational alignment
- Identified gaps and remediation needs
Reviews must be impartial and evidence-based.
6. Maintain and Update the Program
The Program must be kept up to date:
- When laws or Rules change
- When new services, customers, or geographies are added
- When risk profiles evolve
Annual refreshes and periodic reassessments ensure ongoing compliance.
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What Are the Tranche 2 AML/CTF Reforms?
The Tranche 2 AML/CTF reforms are the most significant overhaul of Australia’s AML regime since 2006. They bring designated non-financial businesses and professions (DNFBPs) into the AML/CTF framework to close longstanding regulatory gaps and align Australia with global FATF standards.
Professions newly regulated include:
- Lawyers
- Accountants
- Real estate agents
- Conveyancers
- Trust and company service providers
- Dealers in precious metals and stones
AUSTRAC’s Tranche 2 reform guidance:
Approximately 100,000 additional entities will enter the AML/CTF regime as part of these reforms.
Overview of the Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024 (the Amendment Act)
The Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024 introduces sweeping changes, shifting Australia from a prescriptive, check-box model to a flexible, risk-based, outcomes-focused regime.
Commencement of New AML/CTF Obligations:
For current reporting entities, the reforms shift compliance to a risk-based, outcomes-focused approach, update customer due diligence, and strengthen governance and oversight, with obligations taking effect as the AML/CTF Amendment Act 2024 comes into force, ahead of 2026.
For newly regulated Tranche 2 entities—including lawyers, accountants, real estate agents, conveyancers, trust and company service providers, and dealers in precious metals and stones—AUSTRAC enrolment opens 31 March 2026, and full compliance with AML/CTF obligations, including risk assessments, CDD, reporting, and staff training, must be in place by 1 July 2026.
Key Changes to the AML/CTF Program Framework
1. Overarching Risk-Based Approach
Businesses must assess ML/TF/PF risks and implement proportionate internal controls. Risk assessments become the core driver of CDD, monitoring, and reporting obligations.
2. Expansion to Tranche 2 Entities
From 1 July 2026, the regime formally applies to:
- Lawyers
- Accountants
- Real estate professionals
- Conveyancers
- Dealers in precious metals and stones
These entities must enrol with AUSTRAC from 31 March 2026.
3. Modernised Virtual Asset Regulation
Key updates:
- “Digital currency” replaced with “virtual asset (VA)”
- Captures stablecoins, NFTs, and other emerging technologies
- Regulated services (from 31 March 2026) include:
– VA transfers
– VA safekeeping and custodial services - Travel rule obligations apply to VA transfers
4. Updated Customer Due Diligence (CDD) Requirements
The new outcomes-based CDD rules clarify:
- When enhanced CDD is mandatory
- When simplified CDD may apply
- How ongoing CDD and review cycles should be risk-proportionate
High-risk customers (including foreign PEPs) must undergo ECDD.
5. Reporting and Tipping-Off Changes
Reforms include:
- A modernised tipping-off offence focused on preventing prejudicial disclosures
- IFTI reports replaced with IVTS reports
- Lower CDD exemption threshold for gambling (from $10,000 to $5,000)
6. Governance and Oversight Enhancements
Reforms strengthen governance by requiring:
- Greater involvement of the Board or governing body
- Appointment of a fit and proper AML/CTF Compliance Officer
- Replacement of designated business groups with reporting groups for flexible group compliance
Preparing for the Tranche 2 AML/CTF Reforms
Businesses should now begin preparing for 2026 by:
1. Developing or Updating an AML/CTF Program
AUSTRAC will release starter program kits in December 2025.
2. Appointing a Compliance Officer
A senior individual must oversee compliance.
3. Training Staff
Training must be tailored, role-specific, and ongoing.
4. Enrolling with AUSTRAC
Enrolment for Tranche 2 professions opens 31 March 2026.
5. Reviewing AUSTRAC Guidance
Monitor updates here: https://www.austrac.gov.au/about-us/amlctf-reform/reforms-guidance
Frequently Asked Questions (FAQ Structured for Google Rich Results)
What is an AML/CTF Program?
A risk-based framework that identifies, mitigates, and manages ML/TF/PF risks for businesses that provide designated services.
Who needs an AML/CTF Program in Australia?
Any business providing designated services, including financial institutions, DCEs, remitters, casinos, bullion dealers, lenders, and—under Tranche 2—lawyers, accountants, conveyancers, and real estate professionals.
What are Tranche 2 reforms?
The expansion of AML/CTF regulation to DNFBPs, commencing 1 July 2026.
What are the key components of an AML/CTF Program?
A risk assessment, CDD, ECDD, transaction monitoring, reporting, record-keeping, training, and independent reviews.
When do the Tranche 2 obligations commence?
Most obligations commence 1 July 2026, with enrolment starting 31 March 2026.
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Impact on Current Reporting Entities
For current reporting entities already regulated under the AML/CTF Act—such as banks, financial institutions, remitters, bullion dealers, casinos, and digital currency exchanges—the updated requirements represent a shift from a prescriptive, compliance-based model to a risk-based, outcomes-focused approach. Key impacts include:
- Program Structure Flexibility: You no longer need to separate your AML/CTF Program into Part A and Part B. Your program can be organised to suit your business, provided it meets the Act’s requirements.
- Enhanced Risk Assessment: Existing entities must review and, if necessary, update their ML/TF/PF risk assessments to ensure they reflect current threats, customer profiles, products, services, and geographies.
- Stronger Governance and Oversight: Boards and senior management must take a more active role in overseeing ML/TF risks and compliance. Entities must appoint a fit and proper AML/CTF Compliance Officer responsible for implementing the program.
- Updated Policies and Controls: AML/CTF policies should be risk-proportionate, outcomes-focused, and aligned with current operations. Proliferation financing risks can be addressed within existing money laundering and terrorism financing policies if assessed as low.
- Timing: These changes come into effect on 31 March 2026, giving current reporting entities time to review, update, and enhance their AML/CTF Programs in line with the new framework.
By proactively implementing these updates, current reporting entities can demonstrate strong regulatory governance, reduce compliance gaps, and ensure readiness for the full scope of AML/CTF obligations under the new risk-based regime.
Get Your Compliant AML/CTF Program Today
Preparing your business for the AML/CTF reforms, including Tranche 2 obligations, starts with a robust, AUSTRAC-compliant AML/CTF Program. Click Legal offers a ready-to-use AML/CTF Program Template aligned with the AML/CTF Act.
Our template allows your business to:
- Implement a risk-based AML/CTF framework quickly and efficiently
- Meet AUSTRAC registration and reporting obligations
- Establish policies, procedures, and controls tailored to your operations
- Save time and costs compared to building a Program from scratch
Start with a compliant, fully customisable AML/CTF Program today:
View and purchase the template here
For additional support, our team can guide you through implementation, training, and ongoing compliance, ensuring your business is ready for 2026 and beyond.
Speak With an AML/CTF Specialist
If your business is affected by the AML/CTF reforms, or you need support to develop, review, or update your AML/CTF Program, now is the time to act. With Tranche 2 bringing almost 100,000 new entities into the regime, early preparation is essential to avoid compliance gaps, enforcement risk, and operational disruption.
Click Legal provides practical, risk-based AML/CTF guidance tailored to your business model, sector, and risk profile. We help you:
- Build compliant, proportionate AML/CTF Programs
- Conduct ML/TF/PF risk assessments
- Prepare for AUSTRAC enrolment in 2026
- Train staff and uplift governance
- Align policies and controls with the new outcomes-focused regime
For tailored AML/CTF advice or support, contact us:
📞 0450 502 672
📧 hello@clicklegal.com.au
Early preparation will position your business for a smooth transition and demonstrate strong regulatory governance. Let us help you get it right.
🎯 SPECIAL OFFER – 10% OFF YOUR FULLY TAILORED AML/CTF PROGRAM!
Work with Click Legal to develop a program specifically designed for your business. Get a fully compliant, risk-based AML/CTF Program ready for AUSTRAC and Tranche 2 obligations—while saving 10% today!