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Accountants will need to prepare for new obligations under the expanded anti-money laundering and counter-terrorism financing regime following the passage of amendments through parliament.
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Anti-money laundering reforms pass both houses
29 November 2024
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The Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Amendment Bill 2024 was passed by parliament last week on its final sitting day for the year.
The legislation expands the Anti-Money Laundering and Counter-Terrorism Financing regime to certain high-risk services provided by accountants, lawyers, trust and company service providers and real estate professionals.
Where accountants provide one of the nine designated services under the expanded regime, they will become a reporting entity under the new amendments.
Accountants who are reporting entities will need to undertake a risk assessment of their business, their clients and the services they offer and develop policies and procedures to mitigate any risks identified. They will also be required to report any suspicious matters to the Australian Transaction Reports and Analysis Centre (AUSTRAC).
Reporting entities will need to enrol with AUSTRAC by 31 March 2026 and be compliant with AML/CTF obligations by 1 July 2026.
AUSTRAC chief executive Brendan Thomas said the expansion of the regime to high-risk services in new sectors will assist industry and AUSTRAC to better identify and mitigate the significant risks of money laundering and terrorism financing.
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“The money being laundered is generated from illegal activities that cause up to $60.1 billion in harm to the Australian community, though crimes such as drug trafficking, cybercrime, scams, child exploitation and human trafficking,” Thomas said.
“The historic passing of this bill will strengthen the integrity of the regime, enhance our compliance internationally and protect Australians by disrupting financial crime.”
Thomas said AUSTRAC was committed to working closely with the new industry sectors coming under AUSTRAC supervision to ensure the new system is effective and focuses on making Australia safer.
“We have already established strong relationships with the industry bodies affected by these changes, and will continue to work in partnership in developing guidance and assistance to ensure this new system is workable and effective.
“We are also committed to working with industry bodies to keep costs to a minimum and to ensure their members are well prepared for the legislation’s commencement,” he said.
AUSTRAC said it had been engaging closely with the industry on the development of the AML/CTF rules and AUSTRAC education and guidance, to ensure that current and future reporting entities are aware of and understand their obligations.
CA ANZ said the reforms were a significant step forward in Australia's efforts to meet its international obligations.
CA ANZ chief executive Ainslie van Onselen said the work was only beginning and urged the government not to lose sight of the important complementary measures to assist accountants to comply with the legislation.
“CA ANZ will work closely with AUSTRAC to finalise the accompanying rules and develop guidance and resources for accountants, ensuring they are well equipped to meet their obligations under the AML/CTF regime,” van Onselen said.
“But in addition to rules and accounting-specific guidance, CA ANZ will also continue to advocate for other improvements that would support the practical adoption of these reforms, including the establishment of a beneficial ownership register, as well as searches on ASIC’s Organisations and Business Names register to be free of charge,” she said.
“Director IDs also should be linked to their companies on ASIC registers, to further minimise compliance costs and enhance the effectiveness of the AML/CTF regime. This will be crucial for our members to conduct efficient and timely customer due diligence."
Van Onselen acknowledged the collaborative process that shaped the bill, recognising the government's responsiveness to earlier concerns raised by the accounting profession.
"The legislation strikes an appropriate balance between strengthening compliance measures and minimising unnecessary red tape for accountants by focusing on specific high-risk services, rather than entire professions," she said.
“Acknowledging the existing regulatory framework for accountants is sensible and cost-effective, and I appreciate the government’s engagement that has delivered us to this milestone.”
CPA Australia said it supported the expansion of the regime to high-risk professional services, including those offered by its members.
CPA Australia’s regulations and standards lead, Belinda Zohrab-McConnell, said an effective regime that detects and prevents criminal activity would help protect Australians and the reputation of the nation as a modern, fair and transparent place to do business.
“We look forward to working with AUSTRAC and the Attorney General’s Department in the development of the Rules and Guidance to support our members in implementing these requirements," Zohrab-McConnell said.
However, Zohrab-McConnell said CPA Australia remained concerned about the potential for duplication and burdensome regulation.
"[We] are looking to the Attorney General and AUSTRAC to ensure that implementation is practical and not unreasonably costly as this flows on to costs for consumers and can become a barrier to advice," she said.
Concerns about the regulatory burden and cost of the expanded regime on newly included professions such as accounting were raised throughout the consultation on the reforms.
The opposition previously warned that Treasury modelling had estimated that providers of accounting services alone would be hit with approximately $2.883 billion in additional costs.
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