Australian Government: Attorney-General's Department
Australian Government: Attorney-General's DepartmentAchieving a Just and Secure Society

Information for Businesses

Australia has implemented new anti-money laundering and counter-terrorism financing (AML/CTF) laws to meet international standards and to help protect businesses from being misused for money laundering and terrorism financing.
As a business providing certain services, you may be required to collect customer information. By collecting customer information you are helping to protect your business from being misused for the purpose of criminal activity.

Frequently asked questions

What is money laundering and terrorism financing?

The goal of most criminal acts is to generate a profit. To enjoy their ill-gotten gains, criminals commonly seek to disguise the illegal source of those profits. Money laundering is the processing of criminal profits to disguise their illegal origin.

Terrorist groups also move funds to disguise their source, purpose and destination. Terrorism financing includes the financing of terrorist acts, terrorists and terrorist organisations.

Both money laundering and terrorism financing are serious crimes.

What are the new AML/CTF laws?

The Government has introduced new laws in the Anti-Money Laundering and Counter-Terrorism Financing Act 2006.

The new laws require businesses that provide certain financial or gambling services, or those involved in bullion dealing, to:

  • identify their customers before providing a service
  • report certain transactions, and
  • report suspicious matters.

Why has new legislation been introduced?

The new laws were introduced to:

  • bring Australia’s AML/CTF system into line with international standards
  • reduce the risk of Australian businesses being misused for the purposes of money laundering or terrorism financing, and
  • meet the needs of law enforcement agencies for targeted information about possible criminal activity and terrorism.

Which businesses are affected by the new AML/CTF laws?

The new laws affect those businesses which provide designated services under the AML/CTF Act, including:

  • banks, credit unions, building societies, lending, leasing and hire purchase companies, stored value card issuers, issuers of traveller’s cheques, foreign exchange dealers, asset management companies, remittance dealers, financial planners who arrange for the issue of financial products, life insurers, superannuation funds, custodial service companies, cash couriers and securities dealers
  • the gambling sector, including casinos, bookmakers, TABs, clubs and pubs, internet and electronic gaming service providers, and
  • bullion dealers.

How will privacy be protected?

Reporting entities and Australian Government agencies who collect personal information are subject to the Privacy Act 1988 (Privacy Act). The Privacy Act regulates the collection, use, disclosure, quality and security of personal information.

For more information on how your privacy will be protected, please contact the Office of the Privacy Commissioner on 1300 363 992 or visit <www.privacy.gov.au/business/aml>.

How has the Government minimised implementation costs?

The Government recognises that affected businesses will incur costs in implementing the reforms. The Government has done what it can to minimise the costs of implementation through:

  • phasing-in the new obligations over a two-year period, with a 15-month period following the commencement of each phase, during which time AUSTRAC will not seek a civil penalty against a reporting entity if the reporting entity has taken reasonable steps to comply with its obligations
  • adopting a risk-based, business-specific approach which will allow industry to apply its resources to the customers and areas of its operations at greatest risk, and
  • permitting flexibility in the legislative requirements so that AML/CTF programs and customer identification regimes need only be appropriate to the size and complexity of the business.

Obligations under the AML/CTF regime were designed in a way that they can build on systems and procedures that are already carried out by reporting entities under existing legislation and good governance practices.

What are the new reporting obligations?

The AML/CTF Act imposes obligations on new reporting entities, including identification, verification and ongoing monitoring of customers; reporting suspicious matters and transactions above a set threshold; ensuring customer information accompanies international funds transfer instructions; and record keeping obligations.

The keystone of the regime is a requirement for a reporting entity to know its customer.

What is AUSTRAC?

The Australian Transaction Reports and Analysis Centre (AUSTRAC) is Australia’s AML/CTF regulator and financial intelligence unit.

AUSTRAC currently oversees compliance with the reporting requirements of the Financial Transaction Reports Act 1988 by certain financial service providers, the gambling industry and others.

AUSTRAC’s role is extended to regulate businesses who provide designated services covered under the AML/CTF Act.

How is this different to existing identification and verification obligations under the Financial Transactions Reports Act 1988 (FTR Act)?

Under the FTR Act customers opening certain accounts with ‘cash dealers’ are required to provide identification under either the 100 point test, using documents such as a passport, drivers licence and utilities notice, or have their identify confirmed by an ‘acceptable referee’. Under the new legislation, businesses determine the appropriate level of required identification and verification subject to the money laundering and terrorism financing risk. The identification obligations are extended to a wider number of services than currently covered by the FTR Act.

Under the new legislation, reporting entities also have to monitor customer transactions during their provision of the designated service. Reporting entities must monitor customer transactions with a view to identifying, mitigating and managing the risk that the provision of the designated service may involve or facilitate money laundering or terrorism financing.

Have all affected sectors been consulted about the reforms?

Affected sectors have been involved in extensive consultation throughout the development of the AML/CTF legislation. The final form of the legislation was shaped by two reports from the Senate Standing Committee on Legal and Constitutional Affairs and over 200 submissions received from affected sectors and the public during two public consultation periods. Key industry bodies also participated in a Ministerial Advisory Group which provided the Government with high level policy advice. Industry bodies were also represented on a range of working groups, including a focus group formed to develop the operational AML/CTF Rules.

Is the Government going to assist industry and the general public in understanding the impact of the new system?

The Australian Government has implemented a public awareness campaign to inform the community about why Australia has introduced new AML/CTF laws and what the Government will do to support business and the community in the period in which the new laws are being implemented.

Government officials are working closely with key stakeholders to develop this public awareness campaign.

The campaign will be informed by market research and in consultation with industry.

AUSTRAC, as the regulator with responsibility for monitoring business compliance with AML/CTF obligations, is also developing an education and training strategy for affected businesses to help them understand their new obligations and to meet industry and ot her government agency requirements.

Please see the Information for Customers page for more information.

How can I find out more information?

For more information please visit AUSTRAC www.austrac.gov.au or call the AUSTRAC Help Desk on 1300 021 037 or e-mail help_desk@austrac.gov.au