At a glance
- Australia has passed landmark anti-money laundering legislation that will require professional services to combat financial crime.
- The new regulations, effective in mid-2026, aim to create proportionate compliance measures for different professional settings.
- AUSTRAC said accountants are now economic security guardians, with financial crime costing Australia $60 billion annually.
At the Institute of Public Accountants (IPA) National Congress in Port Douglas last week, Brad Brown, national manager of regulatory operations at Australian Transaction Reports and Analysis Centre (AUSTRAC), told delegates the legislation’s passage would see accountants as a first line of defence in tackling financial crime.
Brown branded the milestone of the legislation passing as a “landmark day in AUSTRAC’s history”. The Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill was introduced on 11 September.
The legislation, which will come into effect in mid-2026, extends AML/CTF obligations to what Brown described as the “gatekeeper sector” – accountants, lawyers, real estate professionals, and trust and company service providers to help tackle financial crime. It aims to increase flexibility, reduce regulatory impacts and support businesses better prevent and detect financial crime.
Failure to not manage risks could result in reputational damage, loss of customers, further regulatory action, facilitating serious crime and increased scrutiny and penalties.
Accountants who are reporting entities must conduct a risk assessment of their business, their clients and the services they offer. They are also required to mitigate identified risks by producing policies and procedures, and report any suspicious incidents to AUSTRAC. Reporting entities must enrol with AUSTRAC by 31 March 2026 and be compliant with AML/CTF obligations by 1 July 2026.
According to AUSTRAC’s recent National Risk Assessment, accountants are considered to have a “high and stable money laundering vulnerability”. Brown said accountants are “among the most frequently and consistently identified professional facilitators of money laundering”.
The new regulatory framework acknowledges a sole practitioner in regional Australia faces different money laundering risks compared to a metropolitan Big Four accounting firm. It aims to create proportionate compliance measures that don’t unnecessarily burden smaller practices.
AUSTRAC has worked with the industry on developing the AML/CTF regulations, as well as education and guidance to boost awareness among current and future reporting entities about their obligations.
Financial crime costs $60 billion a year
Crime costs the Australian community an estimated $60 billion annually. This includes $12.4 billion in illicit drugs and $16.4 billion in indirect costs of prevention and responding to serious and organised crime.
Brown showed delegates a video to demonstrate the human impact of financial crime, covering personal stories about human trafficking, exploitation and loss of livelihood.
“These aren’t just numbers,” Brown said. “These are people’s lives.”
Brown spoke about two case studies that underscored the importance of these regulations. In one instance, an Australian-based accountant was found to be assisting a major money laundering organisation by providing advice on opening fraudulent accounts and creating deceptive invoices. Another case involved tax evasion schemes where false invoices and deliberately inactive businesses were used.
“The accountancy profession is extremely diverse and your services are particularly relevant in the ‘layering’ phase of money laundering,” he said. Layering is where criminals attempt to obscure the origins of illicit funds by moving them through complex financial structures.
AUSTRAC is committed to supporting the transition. The organisation plans to develop template programs, provide extensive guidance and work closely with industry associations to ensure smooth implementation. Brown promised a “forward-leaning” approach, with a focus on supporting small and medium-sized enterprises to understand and comply with the new regulations.
Australia globally aligned
Internationally, this move aligns Australia with global efforts to combat financial crime. The legislation not only addresses money laundering and terrorism financing, but also tackles the proliferation financing of weapons of mass destruction.
A failure to manage financial crime risks can result in reputational damage, loss of banking relationships, potential customer attrition and unwittingly becoming entangled in criminal activities.
Brown said accountants were no longer just financial advisors, but guardians of Australia’s economic security.
“We’re part of a far bigger global effort,” he concluded, “and every professional has a role to play in protecting our community”.
More information on IPA’s submission ‘Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2024 here.
Read the next article in the 2024 National Congress series: Preparing accountants for a fast-changing world
