Avoid ‘repackaged’ AML/CTF advice from banking sector, consultant warns

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 caught under anti-money laundering and counter-terrorism financing (AML/CTF) rules.

The reforms will see captured professional services firms regulated by Australia’s financial intelligence unit AUSTRAC alongside banks, casinos and bullion dealers.

Ahead of the new regime, financial crime consultant Brett Erickson said regulators were concerned about a wave of consultants peddling AML/CTF risk frameworks from the banking sector, which were not appropriate to manage risks in the professional services sector.

“There’s … growing regulatory concern about the wave of consultants entering the space selling repackaged banking frameworks. These systems aren’t built for accounting firms, they’re built for continuous monitoring in a transactional environment, not episodic or matter-driven relationships,” Erickson told Accounting Times.

“Trying to retrofit those controls creates a false sense of security, and firms that rely on them may end up more exposed than protected.”

The reforms will require captured firms to appoint an AML/CTF officer and develop a risk management program tailored to their business. Recruiters have predicted that many smaller firms caught by the regime would seek to outsource the mechanics of their AML/CTF program.

However, Erickson warned accounting firms to avoid AML/CTF consultants that had little understanding of the professional services sector.

“People are leaving banking roles to spin up consulting firms and they spend their entire career within the banking industry and don't actually have an understanding of real estate or law or accounting,” he said.

When seeking external AML/CTF expertise, Erickson said accounting firms should do proper due diligence and ensure that the specialist understood the accounting profession and its specific risks.

“When we look at accounting, [the risk is] going to be your knowledge of the laws and regulation and how to manipulate records and how to move around funds and allocations so that they look legitimate,” he explained.

“Whereas in the banking system a lot of it's going to be in currency amounts, how much is being deposited, how much is being moved, what jurisdictions are they moving from.”

Key risks in the accounting space related to the concealment of ultimate beneficial owners (UBOs), unusual client behaviour such as paying unusually high fees or demanding fast service to bypass scrutiny, and abuse of accountants’ professional expertise in structuring or tax knowledge, Erickson said.

“A big one that is common for both accounting and law firms is going to be ultimate beneficial owner computation,” he explained.

“So they might be setting up a shell company or a front company that is set up under someone else's name in a jurisdiction [that has] different privacy laws where they are not going to be able to nearly as easily be able to find out who actually owns this company.”

Another red flag, according to Erickson, was when clients urged accountants to operate at an unusually rapid pace, without concern for fees. He added that accountants’ knowledge in structuring companies and trusts to avoid taxes and scrutiny could be exploited by money launderers.

He added that AUSTRAC was typically tough in its approach to financial crime enforcement, making it imperative for firms to take AML/CTF obligations seriously.

“Australia is pretty tough on their enforcement. I would not want to be one of the first companies that gets an enforcement action from Austrac out of Tranche 2, when you don't know how they're going to approach that yet,” Erickson said.

“They might come down really hard and it might give a little bit more grace, but we don't really know that yet. And I would not want to be one of the companies that gets hit first in the unknown of what this will look like.”