Accountants urged to ask crucial questions for AML/CTF compliance, CA ANZ says

Following the commencement of tranche two of Australia’s new anti-money laundering and counter-terrorism financing (AML/CTF) regime in July, and its aim to look to accountants to assist AUSTRAC in detecting criminal abuse of the financial system, CA ANZ says the profession is now at the forefront of detecting money laundering, terrorist financing, and other financial crimes.

CA ANZ said that compared with banks, which can only see individual transactions, accountants have visibility of their clients’ broader financial affairs, such as business structures, ownership arrangements and financial relationships; the government sees the profession as an important line of defence against financial crime.

“This does come with a significant up-front cost in time and money and there are ongoing reporting and compliance obligations,” said CPA Australia regulations and standards lead, Belinda Zohrab.

With these new obligations in place, CA ANZ said that this would mean that accountants need to ask their business owner clients questions about ownership structures, source of wealth and the purpose of their transactions.

CA ANZ group executive of advocacy, public and government affairs, Damian Ogden, said: "Accountants now have new obligations to help identify and deter money laundering, terrorist financing and other financial crimes.”

"Accountants are professionals who can see the bigger picture … They understand how businesses operate, how financial structures fit together and where red flags may emerge."

"It's a lot of work, but it's necessary, and we've worked with the government to make these laws workable for the accountant running a two-person firm in Penrith or Perth," he said.

AUSTRAC's 2024 National Risk Assessment revealed that money laundering was behind the $12.4 billion in criminal proceeds in 2022–23 in the Australian illicit drug market.

"Money laundering enables some of the most harmful criminal activity in our communities, including drug trafficking, human trafficking and child exploitation," Ogden said.

"These are important reforms that bring Australia into line with international expectations and help ensure our financial system remains trusted, transparent and resilient.”

"For honest businesses, this is simply a new part of doing business. But for those seeking to move illicit money through the system, the net is tightening."