Australia’s AML/CTF Reform 2025: Key Changes Explained
Australia is overhauling its anti-money laundering and counter-terrorism financing (AML/CTF) framework with new rules set to take effect in 2025.
Australia’s AML/CTF reform 2025 represents a decisive step in strengthening the country’s defenses against financial crime. This AUSTRAC led initiative aims to update the regime, close regulatory gaps, as well as align Australia more closely with global best practices.
For businesses in the financial and professional sectors, the changes bring new responsibilities and higher risks, especially for those who are not ready.
So, do not get caught unprepared. Read our blog to understand how these new rules will impact your business and learn what you need to do to stay compliant.
Why Reforms Are Needed
Australia’s AML/CTF framework has long been central to protecting the financial system from misuse by criminals and terrorists under the Anti-Money Laundering and Counter-Terrorism Financing Act. Yet over time, it drew criticism for gaps in coverage and outdated requirements. While banks and major financial institutions were subject to strict regulation, other high-risk sectors such as real estate, accounting, and legal services faced far fewer obligations. These inconsistencies obviously created vulnerabilities that could be exploited for money laundering and terrorism financing.
At the same time, emerging financial technologies and increasingly sophisticated laundering methods have exposed further weaknesses in the system. Internationally, the Financial Action Task Force (FATF) continues to urge Australia to modernise its framework as well as bring it into line with global best practices.
Australia’s AML/CTF Reform 2025 directly responds to the challenges faced by closing regulatory gaps and ensuring consistent obligations across all sectors. Furthermore, it helps in enhancing AUSTRAC’s ability to detect, prevent, and respond to financial crime more effectively. This reform also reinforces Australia’s commitment to maintaining compliance with international AML/CTF standards.
Overview of Australia’s AML/CTF Reform 2025
On 29 August 2025, AUSTRAC tabled the Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Rules 2025 in Parliament after two rounds of public consultation. Throughout the process, AUSTRAC worked closely with regulators, industry stakeholders, and compliance experts to design reforms that are both practical and effective. Hence, they have come up with the following changes:
• Modernised compliance requirements
The new rules update and simplify AML/CTF compliance processes to reflect the realities of today’s financial landscape. This includes incorporating technological advancements such as digital identity verification and data analytics. By modernising these procedures, businesses can more effectively identify and manage risks while reducing unnecessary regulatory burdens.
• Enhanced customer due diligence (CDD) and risk assessments
Under the reform, entities are required to conduct deeper, ongoing checks when onboarding and monitoring customers. This means verifying identities more thoroughly, especially for high-risk clients or those involved in complex transactions. Additionally, continuous risk assessment is now mandatory. In turn, businesses are required to adjust their monitoring based on changing risk profiles, which helps detect suspicious activity early.
• Expanded regulatory scope
The reform also broadens the range of businesses and professions subject to AML/CTF rules beyond traditional financial institutions. This includes designated non-financial businesses and professions (DNFBPs) such as lawyers, accountants, real estate agents, and dealers in precious metals and stones. Bringing these sectors within the regulatory framework addresses previous loopholes that criminals could exploit.
• Improved reporting and transparency
The new rules require entities to submit more timely and detailed reports to AUSTRAC. Suspicious matter reports (SMRs) must clearly outline any unusual or potentially illegal activity, while threshold transaction reports (TTRs) track large cash transactions. Enhanced reporting improves AUSTRAC’s ability to spot patterns and trends, which facilitates faster intervention against potential money laundering or terrorist financing.
• Stronger penalties and enforcement
AUSTRAC’s enforcement powers have also been strengthened to allow more effective supervision and compliance monitoring. Non-compliant businesses face harsher consequences, including increased financial penalties and potential criminal charges for serious breaches. This acts as a stronger deterrent against non-compliance and encourages a culture of accountability.
• Technology and digital identity provisions
The reforms explicitly encourage businesses to adopt secure digital identity technologies to streamline customer verification processes without compromising security. This is expected to reduce friction in compliance workflows, speed up onboarding, and increase accuracy in identifying clients. This also helps prevent financial crime more efficiently.
What These Reforms Mean for You
Australia’s AML/CTF Reform 2025 brings wide-reaching implications across many sectors, including banks, fintechs, casinos, accountants, lawyers, real estate professionals, and other designated non-financial businesses and professions (DNFBPs). Understanding these changes is crucial to staying compliant and competitive in an evolving regulatory landscape.
Who is affected
The reforms extend AML/CTF obligations beyond traditional financial institutions to cover professionals such as accountants, lawyers, and real estate agents, which are sectors previously seen as vulnerable to misuse.
New compliance expectations
Businesses will need to strengthen customer due diligence, implement or upgrade transaction monitoring systems, and maintain robust reporting procedures. This means investing in technology to automate and track compliance as well as training staff to detect suspicious activity. It also means that businesses must perform deeper risk assessments on clients and transactions.
For smaller firms, the added responsibilities may feel overwhelming, while larger organisations face the challenge of integrating new requirements across multiple branches or departments.
Operational and reputational risks
The reforms may introduce operational hurdles, such as slower onboarding processes or delays in high-risk transactions. But the greater risk lies in non-compliance. Businesses that fail to meet obligations face not only legal penalties but also significant reputational damage, which can erode client trust and market standing.
Opportunities for advantage
Compliance is not just about avoiding penalties. By embedding a strong compliance culture, businesses can build credibility with customers, investors, as well as international partners. In sectors like real estate, strong AML/CTF credentials can help attract high-value clients, especially international investors who prioritise secure, transparent transactions.
Move Forward with Confidence
Australia’s AML/CTF Reform 2025 represents a critical milestone in Australia’s ongoing battle against money laundering and terrorism financing. By modernising the framework, expanding the scope of regulated entities, and aligning with global standards, the country is strengthening the integrity and security of its financial system.
For businesses, the message is clear: compliance is mandatory and urgent. Those who act swiftly to enhance their AML/CTF programs will avoid hefty penalties. More importantly, you can also contribute to a safer, more trustworthy financial environment.
Now is the time for businesses to:
- Review and update their AML/CTF policies and frameworks
- Train staff on enhanced customer due diligence and reporting requirements
- Seek expert guidance to ensure a smooth transition to the new rules
Let Bodeccia Support Your Compliance Journey
Australia’s AML/CTF Reform 2025 demands proactive risk management and robust compliance strategies. At Bodeccia, we surely recognise the challenges of adapting to these sweeping changes.
Our experienced team offers customised solutions in accounting, business consulting, as well as regulatory compliance to help businesses navigate AUSTRAC’s evolving requirements confidently. Whether you need support with risk assessments, staff training, or policy development, BMS is your trusted partner in building resilient and compliant operations.
