DGM , Head Centralized Trade Services Bank AL Habib. Senior Trade & TBML Specialist. Certified Anti-Money Laundering Professional (CDCS, CITF, CSDG, CAMLP),
Australia has expanded its AML/CTF regime to include real estate agents, lawyers, accountants, and precious metals dealers. These reforms, part of the Tranche 2 legislation, aim to close loopholes exploited by criminals to launder illicit funds. The newly regulated sectors must now implement robust reporting and compliance measures and this extension aligns Australia with global AML standards. The Australian Parliament passed AML & CTF Amendment Bill 2024 (Cth) (the Bill) on 29 November 2024. As well as simplifying the current AML/CTF regime, the Bill expands the regime’s application to services provided by certain high-risk businesses and professions (‘Tranche 2 entities’), including: real estate professionals and developers; professional services providers such as lawyers, accountants, insolvency and restructuring practitioners, consultants; and dealers in precious metals and stones. When the Tranche 2 entities’ provisions commence on 1 July 2026, the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) (AML/CTF Act) will apply to approximately 70,000 additional businesses, bringing the total reporting entities to 90,000. The Tranche 2 entities amendments to the AML/CTF Act aim to close regulatory gaps and bring Australian law in line with international standards set by the Financial Action Task Force. Currently, the absence of AML/CTF requirements for Tranche 2 entities is seen as a weakness in Australia’s AML/CTF framework, leaving these industries vulnerable to money laundering and terrorism financing risks. Under the new Law, i)- Businesses offering a designed service will need to enrol with AUSTRAC. ii)-AML/CTF policies must be in place before a business can provide designated services, and the business must conduct a risk assessment of its ML/TF/PF risk. iii)-Businesses providing a designated service must appoint an AML/CTF compliance officer to oversee the operation of the entity’s AML/CTF policies and updates. iv)- Tranche 2 entities will need to conduct initial customer due diligence, which includes the collection and verification of a customer’s identity as well as customer risk rating. v)-Tranche 2 entities will need to collect, review and update ‘Know Your Customer’ (KYC) information, as well as monitor their customers for unusual transactions and behaviours that may give rise to a suspicious matter reporting obligation. They will also be required to conduct enhanced customer due diligence for high risk customers (such as politically exposed persons). vi)- Tranche 2 entities will be required to report certain matters to AUSTRAC, including suspicious matter reports, threshold transaction reports and international value transfer services. vii)-Tranche 2 entities will need to keep certain records of the designated services provided to customers.