AUSTRAC AML/CTF Requirements
Customer Due Diligence (CDD) and Enhanced Due Diligence (ECDD) are core AML/CTF obligations. This guide explains the difference, when each applies, and how to stay compliant under Tranche 2.
**CDD** is the standard identity verification process required for all customers before providing a designated service. It ensures you know who your customer is and why they are engaging with your business.
**ECDD** is a deeper, more detailed level of due diligence required when a customer or transaction is considered **high risk**. It involves gathering additional information to understand the customer’s background, source of funds, and the legitimacy of the transaction.
Customer is a Politically Exposed Person (PEP)
Customer is from a high‑risk jurisdiction
Large or unusual transactions
Complex ownership structures
Cash‑intensive or high‑risk industries
Suspicious behaviour or red flags
Negative media or adverse information
If any of these apply, you must escalate to ECDD — and document your decision.
AUSTRAC requires all Tranche 2 businesses to conduct CDD and ECDD as part of their AML/CTF Program. Failure to do so can result in penalties up to $18.5 million.
Mandatory under the AML/CTF Act.
Protects your business from ML/TF exposure.
Ensures you can demonstrate compliance anytime.
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