AUSTRAC penalty highlights importance of on-time reporting as AML/CTF regime looms

Financial crime regulator AUSTRAC issued remittance service provider Revolut with a $187,800 infringement notice after it failed to submit international funds transfer instructions within the required timeframe under the Anti-Money Laundering and Counter Terrorism Financing (AML/CTF) Act.

As new AML/CTF requirements loom for accounting firms that provide designated services, lawyer and anti-money laundering specialist Fiona Halsey said that this case highlighted the importance of having robust systems and controls in place to file AML/CTF reports on time.

“Compliance is not just about filing reports eventually – it’s about filing them on time,” she said.

“AUSTRAC has made clear that late reporting undermines law enforcement. Accountants will need systems that ensure suspicious matter reports (SMRs) and threshold transaction reports (TTRs) are submitted promptly.”

From 1 July 2026, accounting firms that provide designated services, including assisting with real estate transactions and setting up trust and company structures, will be captured under AML/CTF rules as ‘Tranche 2’ entities.

Last Friday (29 August), the amended AML/CTF rules were tabled in parliament following two rounds of public consultation. AUSTRAC urged newly captured firms to familiarise themselves with the rules and laws, and consider how the changes would impact their business.

Covered firms would be required 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.

Halsey noted that Revolut’s case showed that AUSTRAC could take regulatory action against firms even when they were proactive and cooperative, underscoring the importance of avoiding errors in the first place.

“Revolut’s cooperation did not prevent a six-figure penalty. For accountants, this means that even if an error is detected and disclosed, regulatory action is still possible. Voluntary disclosure will reduce the severity of consequences but won’t erase them,” she said.

AUSTRAC acknowledged that Revolut had notified the regulator of its late reporting and took prompt steps to fix its controls and submit the reports. However, the regulator still issued a fine, indicating a hard-line approach to late reporting.

“Revolut has been co-operative with AUSTRAC and paid the infringement notice in full,” Brendan Thomas, chief executive of AUSTRAC, said.

“These are the real-life consequences of failures to report and it’s why failures to report need to have regulatory consequences, even where reporting entities detect, disclose and report the failures.”

He added that late AML/CTF reporting had material impacts on authorities’ ability to intercept financial crime.

“We take late reporting seriously because timely reports are critical to help us detect and disrupt financial crime – to strike while the iron is hot,” he said.

“If we don’t pick up suspicious movements as soon as possible, it denies law enforcement access to the intelligence that supports criminal investigations.”