AML/CTF Program Guide for Australian Reporting Entities

What is an AML/CTF Program?

An AML/CTF program is your documented plan to comply with the Anti-Money Laundering and Counter-Terrorism Financing Act 2006. Under AUSTRAC requirements, all reporting entities must have a written program that outlines how you identify, manage, and report money laundering and terrorism financing risks.

Who Must Have an AML/CTF Program?

If you are a reporting entity under the AML/CTF Act, you must have a program. Reporting entities include:

• Accountants and audit firms
• Lawyers and solicitors
• Real estate agents
• Conveyancers
• Financial advisers
• Financiers and lenders
• Casinos and gaming venues

AML/CTF Program Part A: Mandatory Requirements

Part A covers the core elements every reporting entity must include:

• Customer Due Diligence (CDD) - How you identify and verify customers
• Beneficial Ownership Identification - Who owns/controls the customer
• Enhanced Due Diligence (EDD) - Extra checks for high-risk customers
• Risk Assessment - Document your ML/TF risks
• Sanctions Screening - Check against sanctions lists
• Record Keeping - Keep customer records for 7 years minimum
• Reporting - Report suspicious activity to AUSTRAC
• Training - Ensure staff understand AML obligations

AML/CTF Program Part B: Application-Specific Requirements

Part B depends on your business type and must address:

• Nature of your business and client interactions
• Products and services offered
• Customer identification methods
• Ongoing transaction monitoring
• Use of technology and third parties
• Cross-border transactions

Step-by-Step AML/CTF Program Creation

Step 1: Conduct ML/TF Risk Assessment

Identify money laundering and terrorism financing risks specific to your business:

• What products create risk? (cash transactions, trusts, property sales)
• What customer types are high-risk? (new customers, high-value clients)
• What jurisdictions pose risk? (high-risk countries, sanctions-listed)
• What internal factors increase risk? (staff turnover, process gaps)

Step 2: Design Customer Due Diligence Process

• Collect and verify identity documents
• Verify beneficial ownership information
• Screen against sanctions lists (DFAT, UN, etc.)
• Document all CDD steps
• Review and update regularly

Step 3: Create Suspicious Activity Reporting Procedure

• Train staff to identify suspicious transactions
• Document what constitutes suspicious activity
• Create internal reporting form
• Report to AUSTRAC within 10 business days
• Keep SMR records

Step 4: Document and Implement

• Write Part A requirements document
• Write Part B application-specific document
• Create supporting procedures and forms
• Train all staff on AML/CTF obligations
• Designate AML/CTF compliance officer
• Review annually and update when required

Tranche 2 Reforms: New Obligations

AUSTRAC Tranche 2 introduces new requirements for higher-risk reporting entities:

• More robust beneficial ownership verification
• Enhanced ongoing customer due diligence
• Quarterly reporting to AUSTRAC (for some entities)
• Enhanced sanctions screening
• Strengthened governance requirements

AML/CTF Program Compliance Checklist

• ☐ Conducted ML/TF risk assessment
• ☐ Created Part A document with all 8 mandatory elements
• ☐ Created Part B document application-specific to your business
• ☐ Implemented customer due diligence process
• ☐ Set up sanctions screening system
• ☐ Created suspicious activity reporting procedure
• ☐ Trained all staff on AML/CTF obligations
• ☐ Designated AML/CTF compliance officer
• ☐ Established record-keeping system (7-year retention)
• ☐ Scheduled annual review and update
• ☐ Documented compliance for AUSTRAC audit

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