What the letters mean
AML is anti-money laundering: stopping the proceeds of crime being disguised as legitimate money. CTF is counter-terrorism financing: stopping money, legitimate or not, reaching people who would use it for terrorism. Australia legislated both together in the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth), so the two are always spoken of as one regime.
Who it applies to
Businesses that provide a designated service listed in the Act. Since 2006 that has meant banks, credit unions, remitters, casinos, bullion dealers and other financial businesses. Since 1 July 2026 it also means accountants, bookkeepers, real estate agents, lawyers, conveyancers, trust and company service providers and dealers in precious metals and stones, the group known as Tranche 2.
What compliance means in practice
- Enrolling with AUSTRAC as a reporting entity.
- Adopting a written AML/CTF program: a risk assessment of your own business and the policies you use to manage that risk.
- Appointing a compliance officer at management level.
- Customer due diligence: identifying and verifying clients and their beneficial owners, and understanding the purpose of the relationship.
- Ongoing monitoring and periodic reviews.
- Reporting to AUSTRAC: suspicious matters, threshold cash transactions and an annual compliance report.
- Keeping records for seven years.
- Training staff.
What AML/CTF is not
It is not a duty to investigate clients or to refuse anyone who is unusual. It is a duty to know who you are dealing with, to keep evidence of that, and to tell AUSTRAC when something looks wrong. A small firm that does those three things well is compliant.
Questions people ask
- What is AML compliance?
- Meeting the obligations the AML/CTF Act places on your business: enrolment, a program, customer due diligence, reporting, record keeping and training. AUSTRAC supervises compliance and can take enforcement action.
- Is AML/CTF the same as KYC?
- KYC (know your customer) is one part of AML/CTF: the customer identification and due diligence obligations. AML/CTF also covers the program, reporting, records and training.
- What does CTF add for a small firm?
- In practice, very little extra work: the same identification and reporting steps apply. The main difference is the deadline: a suspicion involving terrorism financing must be reported within 24 hours, not three business days.
General information about Australian AML/CTF law, not legal advice. The Act, the Rules and AUSTRAC's guidance are the primary sources.