AUSTRAC's consultation on new AML/CTF rules - A call for industry feedback

On February 19, 2025, the Australian Transaction Reports and Analysis Centre (AUSTRAC) announced its initiative to seek industry feedback on the proposed new Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Rules. This move follows the recent passage of the Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024, which aims to modernize Australia’s AML/CTF framework. The consultation process is crucial as it allows stakeholders to express their views on the proposed changes, ensuring that the new rules effectively address the complexities of financial crime prevention while remaining practical for compliance.?

Overview of proposed changes?

The proposed new AML/CTF Rules aim to simplify and clarify existing obligations for reporting entities. Key aspects of the proposed changes include:?

• Separation of Rules: AUSTRAC plans to create two distinct instruments: the new General Rules and the Exemption Rules. The General Rules will encompass most current rules but will be rewritten or repealed to create a more coherent structure, moving away from overly prescriptive requirements.?

• Outcomes-Based Compliance: The new framework is designed to focus on outcomes rather than rigid compliance steps. This shift is intended to enhance flexibility for businesses while maintaining robust anti-money laundering measures.?

• Reorganization of Content: The rules will be thematically organized into parts that mirror obligations outlined in the amended Act, making it easier for entities to navigate their responsibilities.?

• Feedback Mechanism: The first round of public consultation is open until February 14, 2025, allowing stakeholders to provide input on various topics such as customer due diligence, compliance reports, and correspondent banking relationships.?

Importance of industry feedback?

The engagement of industry stakeholders is vital for several reasons:?

1. Practical Insights: Industry feedback can provide AUSTRAC with practical insights into how proposed rules may impact day-to-day operations for businesses across various sectors.?
2. Enhanced Compliance: By incorporating stakeholder perspectives, AUSTRAC can develop rules that are not only compliant with legal standards but also feasible for businesses to implement.?
3. Building Trust: Involving industry players in the rule-making process fosters trust between regulators and businesses, encouraging a collaborative approach to combating financial crime.?

Conclusion?

As AUSTRAC seeks feedback on these significant changes to Australia's AML/CTF regime, it is imperative for affected entities—especially those in high-risk sectors like finance, real estate, and legal services—to participate actively in this consultation process. The new rules are poised to reshape how businesses manage their compliance obligations, ultimately contributing to a more effective framework for preventing money laundering and terrorism financing in Australia.?

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Author (REN) Renjith Chief Executive - ReTRRAC Global