The regime
- AML/CTF — anti-money laundering and counter-terrorism financing: the body of law, led by the AML/CTF Act 2006, that requires reporting entities to detect and deter financial crime
- AUSTRAC — the Australian Transaction Reports and Analysis Centre: the regulator and financial intelligence unit that administers the regime
- Tranche 2 — the 2024-2026 expansion of the regime to lawyers, accountants, real estate agents, conveyancers, TCSPs and dealers in precious metals and stones
- Reporting entity — a business that provides a designated service and is therefore enrolled with, and regulated by, AUSTRAC
- FATF — the Financial Action Task Force, the global standard-setter whose recommendations drive Australia's reforms
Clients and risk
- Designated service — a category of work that triggers AML/CTF obligations, such as forming companies or trusts, handling client money for transactions, or assisting with business or real estate transfers
- Customer due diligence (CDD) — identifying and verifying your client, understanding the relationship and rating its risk, before providing a designated service
- Beneficial owner (UBO) — an individual who ultimately owns or controls a client: typically 25% or more ownership, or control through other means such as a trustee or appointor role
- Enhanced due diligence (EDD) — deeper verification and approval required for higher-risk relationships
- Politically exposed person (PEP) — a person holding specified prominent public responsibilities, including defined family members and close associates; foreign PEPs require enhanced CDD, while domestic and international-organisation PEPs require enhanced CDD where the customer is high ML/TF risk
- Sanctions screening — checking clients against the DFAT consolidated list of sanctioned persons and entities
- ML/TF/PF risk assessment — the documented assessment of money laundering, terrorism financing and proliferation financing risk that anchors your program
Programs and reporting
- AML/CTF program — the written, risk-based document describing how your practice meets its obligations, approved by senior management and kept current
- AML/CTF compliance officer — the management-level person responsible for the program, notified to AUSTRAC
- Suspicious matter report (SMR) — a report to AUSTRAC when you suspect a person or transaction may be connected to crime; due in 3 business days (24 hours for terrorism financing)
- Threshold transaction report (TTR) — a report of cash transactions of A$10,000 or more, due within 10 business days
- Tipping off — the section 123 offence of disclosing protected SMR-related information where that would or could reasonably be expected to prejudice an investigation
- AUSTRAC Online — the portal for enrolment and report lodgement
- Seven-year retention — the minimum period AML/CTF records must be kept
Official sources
Use these primary AUSTRAC pages to confirm the current rules and apply them to your circumstances.
Frequently asked questions
What is the difference between KYC and CDD?
KYC ('know your customer') is the industry shorthand for identity verification. CDD is the legal term and is broader: it includes verification, but also understanding the purpose of the relationship, screening, and rating the risk. KYC is a part of CDD, not a synonym.
What does 'risk-based' actually mean?
That your effort follows your risk. High-risk clients get deeper verification, senior approval and frequent review; low-risk clients get a proportionate, lighter touch. What is never acceptable is no touch: every client in scope gets identified, verified, screened and rated.
What is a reporting entity?
A reporting entity is a person or business that provides a designated service with the required Australian geographical link. Status follows the service being provided, not a professional title, industry label or registration alone.
Put it into practice
Cassandra AML turns these obligations into a working system: designated-service decisions, customer due diligence, screening, monitoring and reporting records — hosted in Sydney, free to start.
This guide is general information for Australian professionals. It is not legal advice and does not replace the AML/CTF Act, the AML/CTF Rules or AUSTRAC guidance. Confirm your specific obligations with AUSTRAC or a qualified legal adviser. See our editorial and correction standards.