AUSTRAC launches civil proceedings against 2 businesses for AML/CTF compliance failure

AUSTRAC is threatening serious action against businesses not working in line or failing to meet their reporting obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF), serving as a reminder for businesses to remain compliant.

With the AML/CTF Act already in motion for large entities and coming in July 2026 for smaller entities, AUSTRAC revealed it had launched civil penalty proceedings in the Federal Court against two businesses, Castra Licensee Pty Ltd and Princeton Securities (NSW) Pty Ltd.

AUSTRAC alleged that neither business submitted an annual compliance report for the 2023 calendar year, after both Castra and Princeton, along with 14 other businesses, were issued an infringement notice by the regulator.

These notices were issued in September 2024, with payment of the infringement notice to have been the solution that would have finalised the matter for both Castra and Princeton.

However, AUSTRAC noted that neither business paid its infringement notice, which led to its decision to commence court action.

Katie Miller, acting chief executive of AUSTRAC, said the regulator used the information in compliance reports to better understand the risks that businesses and Australia’s broader financial system were facing.

“The requirement to submit an annual compliance report is fundamental to a reporting entity’s AML/CTF obligations. AUSTRAC uses compliance reporting data to supervise regulated businesses, and to understand how businesses are meeting their obligations under the AML/CTF Act,” Miller said.

“Compliance reporting helps AUSTRAC to identify the industries and businesses that are more vulnerable to money laundering and terrorism financing and provide extra support or guidance where needed.”

According to AUSTRAC, businesses unaware of the compliance report need to familiarise themselves with it and understand that it must be submitted every year between 1 January and 31 March.

For designated business groups, it was noted that only one member should lodge the annual compliance report on behalf of all members in the group.

The member who submitted the report should also notify all group members so that everyone is aware that the report has been lodged, as AUSTRAC wouldn't notify other members of designated business groups once it receives a report.

There are exemptions for some businesses, including:

• Small gaming venues with a licence for no more than 15 electronic gaming machines with no additional designated services provided.

• A solely registered as an affiliate of a remittance network provider (RNP) with no additional designated services provided.

• An AFSL is held, and the only designated service provided is to make arrangements for customers to receive a designated service rather than providing the designated service.

• Have been granted an exemption specifically exempting the business. The business can be checked to see if it already has an exemption that applies to the compliance report.

Miller warned it was imperative that compliance reports were submitted, as criminals were constantly looking for ways to exploit the financial system.

“Businesses with weak AML/CTF controls are at an increased risk of criminal abuse. AML/CTF obligations are not optional.”

“This action should serve as a warning to other businesses who think they can avoid complying with their obligations – submit your compliance report on time or face the consequences.”