AML specialist urges accountants to prepare for ‘significant’ new AML/CTF laws

New anti-money laundering and counter-terrorism financing (AML/CTF) rules are set to affect a broad subset of accounting firms from mid-2026, lawyer and anti-money laundering specialist Fiona Halsey told Accounting Times.

The rules will capture businesses that offer ‘designated services’ such as assisting with the selling or buying of real estate and companies, assisting in equity or debt financing transactions and acting in the creation of a company or legal arrangement, including trusts, partnerships and joint ventures.

Halsey said accounting firms offering such services would see significant new compliance burdens, including the requirement to appoint a dedicated AML/CTF compliance officer.

“That person has to have a reasonable knowledge of AML and CTF. And if you think of the sheer number of Australian accounting firms, if even half of them are caught by this, and they've all got to appoint an AML officer … it's huge,” Halsey said.

“It's really significant. And it feels to me as though accountants, on the whole, are not aware of what's coming.”

While the scale of Australia’s money laundering problem is difficult to measure, the Australian Institute of Criminology (AIC) has estimated that Australia generates as much as $43.7 billion from criminal proceedings annually.

In a bid to crack down on money laundering in Australia, the parliament passed the AML/CTF Amendment Bill 2024 to reform Australia’s regulations on money laundering, terrorism financing and proliferation financing.

The expanded laws require professional service providers, including accountants, that provide ‘designated services’ to comply with AML/CTF reporting and monitoring obligations.

Halsey said that many accounting firms appeared unaware of the upcoming changes and whether they would affect their business.

She stressed that a firm didn't need to have any link to money laundering or criminals to be captured by the new legislation. Common and simple day-to-day services were covered by the new laws.

Under the new rules, covered firms would have to enrol with AUSTRAC, develop an AML/CTF program, conduct ongoing customer due diligence, report suspicious activities and maintain adequate records of their compliance activities.

The requirement for firms to appoint a dedicated AML/CTF officer will be a significant component that firms must prepare for, Halsey said. The officer, who must be somebody at the management level, would be responsible for managing their firm’s AML/CTF practices.

“That person is supposed to ensure that the firm has got [AML/CTF] policies and procedures, that the systems are running properly. If things aren't, they report to the [company’s] governing body,” she said.

“But the idea is that that person is responsible for ensuring that, at a day-to-day level, that what is done for AML, CTF is properly done. So it’s quite a big responsibility.”

Aside from being in charge of creating, implementing and maintaining internal AML/CTF compliance systems, the officer would also be a contact point for AUSTRAC and manage day-to-day AML/CTF reporting and risk management obligations.

The law will also require firms to engage in ongoing customer due diligence and report suspicious matters to AUSTRAC.

Typical red flags for criminal activity and money laundering in a business context include unusual cash-based spikes in revenue and overly complex business structures for no discernible reason, Halsey said.

Civil penalties for noncompliance with new AML/CTF requirements could reach up to $20,000, while criminal penalties could climb even higher.

Halsey predicted that some small accounting firms with limited designated service offerings would simply stop offering those services, given the heightened compliance burden those services would entail from mid-2026.

“I think the biggest thing [for firms] is to see whether they’re going to get caught by the designated services [criteria] or not. That's the big question. Because, if you are caught, then you are really caught.”

“If you only do [designated services as] a small part of your business … you'd have to think pretty carefully as to whether you kept doing it or not, going forward.”