EXPLANATORY STATEMENT

Issued by authority of the AUSTRAC CEO

Anti-Money Laundering and Counter-Terrorism Financing Act 2006

Anti-Money Laundering and Counter-Terrorism Financing (2025 Rules) Amendment Rules 2026 

Anti-Money Laundering and Counter-Terrorism Financing (Class Exemptions and Other Matters) Amendment Rules 2026

AUTHORITY

Section 229 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (the Act) provides that the AUSTRAC CEO may, by legislative instrument, make Anti-Money Laundering and Counter-Terrorism Financing Rules (AML/CTF Rules). The AML/CTF Rules are set out in the Anti-Money Laundering and Counter-Terrorism Financing Rules 2025 (the Rules) and the Anti-Money Laundering and Counter-Terrorism Financing (Class Exemptions and Other Matters) Rules 2007 (the Class Exemption Rules). 

Under subsection 33(3) of the Acts Interpretation Act 1901, where an Act confers a power to make, grant or issue any instrument of a legislative or administrative character (including rules, regulations or by-laws), the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such instrument. 

Section 229 of the Act, read together with subsection 33(3) of the Acts Interpretation Act 1901, provides authority for the AUSTRAC CEO to amend the Rules. This authority supports the making of the Anti-Money Laundering and Counter-Terrorism Financing (2025 Rules) Amendment Rules 2026 (the Amendment Rules) and the Anti-Money Laundering and Counter-Terrorism Financing (Class Exemption and Other Matters) Amendment Rules 2026 (the Class Exemption Amendment Rules).

PURPOSE AND OPERATION OF THE INSTRUMENT

The Amendment Rules and Class Exemption Amendment Rules (together the Instruments) are legislative instruments for the purposes of the Legislation Act 2003. 

Details of the Instruments are set out in Attachment A and Attachment B.

A Statement of Compatibility with Human Rights (the Statement) is at Attachment C. The Statement was completed in accordance with the Human Rights (Parliamentary Scrutiny) Act 2011. The Instrument is compatible with human rights, and to the extent that they may limit human rights, those limitations are reasonable, necessary and proportionate. 

Legislative Background 

Overview of the AML/CTF Regime

1.        Australia’s anti-money laundering and counter-terrorism financing terrorism regime (AML/CTF regime) comprises of the AML/CTF Act, the AML/CTF Rules and any AML/CTF Regulations made under the Act. The AML/CTF regime establishes a regulatory framework for combatting money laundering, the financing of terrorism, and other serious financial crimes.

Reforms to the Act and Rules

1.        In November 2024, the Australian Parliament passed the Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024 (the Amended Act) which amended the Act. The amendments extended the AML/CTF regime to certain higher-risk services provided by real estate professionals, professional service providers including lawyers, accountants and trust and company service providers, and dealers in precious stones and metals — known as ‘tranche two’ entities. The amendments also modernised the regime to reflect changing business structures, technologies and illicit financing methodologies. 

Reforms to the Rules

The Amendment Rules

1.        To operationalise, and supplement, the Amended Act, the Rules were developed by the AUSTRAC CEO and tabled in Parliament in August 2025. The Rules replace many provisions in the Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (No. 1). Since the making of the Rules in August 2025, AUSTRAC has identified that targeted amendments are needed to improve the effectiveness of the Rules and address minor errors.
2.        Specifically, the Amendment Rules include:
   1.        several amendments to the reporting group framework, including:
      1.       introducing an ‘opt-out’ reporting group model, under which related entities in a corporate group or other control structure will form a reporting group by default, unless a reporting entity formally declines membership in writing
      2.       consequential amendments to the lead entity provisions to support the opt-out model and to provide greater certainty for the financial sector.
   2.        technical clarifications to the operation of certain customer due diligence provisions
   3.        extending the timeframe to verify KYC information previously verified by another party to a real estate transaction
   4.        prescribing additional agencies as specified agencies to issue Keep Open Notices
   5.        requiring monitoring for prohibited hate group offences as part of monitoring for unusual transactions and behaviours under safe harbour rules
   6.         amending the travel rule to extend the exemption from verifying certain information (including payer address) to all customers for transactions conducted before 1 July 2030
   7.        updates and corrections to information required in enrolment and registration applications to accommodate all possible business models and structures
   8.        permit amending and withdrawing of reports under sections 41, 43 and 46 of the Act
   9.         prescribing the provisions under the Act which the AUSTRAC CEO may use computer programs to take administrative action
   10.         prescribing content of the approved form when a person is applying for reconsideration of a reviewable decision
   11.        aligning the reporting and lodgement periods for compliance report dates to the Commonwealth Performance Framework as set out in the Public Governance, Performance and Accountability Act 2013
3.        The Amendment Rules make targeted and technical amendments to fully operationalise the Act and the Rules, correct minor drafting errors, and clarify and improve the effectiveness of the AML/CTF regime. The Amendments are machinery in nature, and do not introduce new policy.

The Class Exemption Amendment Rules

1.        AUSTRAC has developed a number of rules-based exemptions which are set out in the Class Exemption Amendment Rules. These rules-based exemptions:
   1.        exempt specified classes of persons where it was not intended that they be captured by the AML/CTF regime
   2.        exempt ATM operators from undertaking initial customer due diligence on people who withdraw less than $10,000 in cash where the person isn’t otherwise the ATM operator’s customer
   3.        exempt Virtual Asset Service Providers (VASPs) from undertaking initial customer due diligence on people who withdraw less than $1,000 in virtual assets to their self-hosted wallet where the person isn’t otherwise the VASP’s customer
   4.        exempt reporting entities that issue open-loop gift cards from undertaking initial customer due diligence about the gift card recipient when paying for goods and services where there are other appropriate risk mitigations
   5.        exempt other people that issue open-loop gift cards from AML/CTF obligations where there are other appropriate risk mitigations
   6.         exempt services provided by barristers to Australian government bodies
   7.        exempt incidental services provided by clearing and settlement facilities
   8.        exempt incidental legal assistance services provided by community legal centres, legal aid, duty lawyers and advocates representing a client under a court referral scheme.

CONSULTATION

1.        Paragraph 212(2)(a) of the Act specifies the persons with whom the AUSTRAC CEO is required to consult in performing the AUSTRAC CEO’s functions. In accordance with this requirement, AUSTRAC released an Exposure Draft of the Amendment Rules and Class Exemption Amendment Rules on 9 February 2026 for public consultation. The consultation ran for a period of two weeks and closed on 20 February 2026.
2.        AUSTRAC received thirty-seven submissions. All submissions and feedback received were considered, and amendments were made to the draft Amendment Rules and Class Exemption Amendment Rules, and/ or Explanatory Statement in response to issues raised.

SUNSETTING

1.        Under item 6 of regulation 12 of the Legislation (Exemptions and Other Matters) Regulation 2015 the Instruments are not subject to sunsetting.
2.    The AML/CTF Rules are designed to be enduring because they:

• complement and provide the detail required for the broader obligations set out in the  Act, aid in meeting Australia’s international commitments and matters of international concern, and support the combatting of money laundering and terrorism financing
• assist industry in fulfilling their compliance with the  Act, and provide commercial and regulatory certainty for industry, and
• are subject to an ongoing process of development, refinement and review, involving scrutiny and feedback from a wide range of stakeholders including industry, the Financial Action Task Force, Australian Government agencies, law enforcement agencies, and other interested parties.

1.    The exemptions in the Amendment Class Exemption Rules are time limited and automatically repeal on the 31 March 2031, 31 March 2033 or 31 March 2036.

IMPACT ANALYSIS

1.    The Office of Impact Analysis (OIA) has been consulted in relation to the Amendment Rules and Class Exemption Amendment Rules and an Impact Analysis is not required as they do not create any additional impact other than what has already been assessed in the Impact Analysis for the Anti-Money Laundering and Counter-Terrorism Financing Regime (AML/CTF) Reforms (OIA reference number: OBPR2203647) completed in September 2024. The Executive Summary of that Impact Analysis is set out below.
2.    Each year billions of dollars of illicit funds are generated from illegal and harmful activities such as drug trafficking, tax evasion, human trafficking, cybercrime and scams, arms trafficking and other illegal and corrupt practices. Illicit financing is also used to fund activities that harm Australia’s national security and efforts to maintain an international rules-based order. The Australian Institute of Criminology (AIC) estimated serious and organised crime to cost the Australian community $60.1 billion in 2020-21. The true total cost of crime is likely much greater, given the illicit nature of the activities and the second order effects on the community and economy. While money laundering is a criminal activity in its own right, illicit financing is a key enabler of these serious crimes with profit being the primary motivation. Criminals must launder their proceeds of crime to enjoy the proceeds of their illegal activities or to reinvest illicit funds in further criminal activity without detection. The amount of money laundered in Australia has been indicatively estimated at up to 2.3 per cent of GDP.
3.    Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) regime establishes a regulatory framework for combatting money laundering, terrorism financing and other serious financial crimes. At its core, the AML/CTF regime is a partnership between the Australian Government and industry. Through the regulatory framework established by the AML/CTF regime, businesses play a vital role in effectively detecting and preventing misuse of their sectors and products by criminals seeking to launder money and fund terrorism.
4.    There are a number of inefficiencies throughout Australia’s AML/CTF regime that limit the effectiveness of Australia’s response to transnational crime at large. Industry and government stakeholders have consistently called for reforms to key obligations of the AML/CTF regime due to unnecessary complexity.
5.    Currently, businesses internationally recognised as providing high-risk services (including lawyers, accountants, trust and company service providers, real estate agents, and dealers in precious metals and stones) are not regulated as part of the AML/CTF regime. These sectors are known internationally as Designated Non-Financial Businesses and Professions (DNFBPs) or ‘tranche 2 entities’ in the Australian context. Gaps in the regulated population leave legitimate businesses vulnerable to exploitation by opportunistic criminals seeking to obfuscate the origins of their illicit wealth from law enforcement. 
6.    These problems impact the quality and breadth of financial intelligence generated to support national security and law enforcement operations, inflate regulatory burden for currently regulated entities and do not adequately harden businesses most at risk of criminal exploitation.
7.    Without reform to address these problems, the AML/CTF regime will become increasingly less effective and more wasteful over time. The costs of inaction are significant, and would likely increase over time with Australia falling further behind continually strengthened international standards set by the Financial Action Taskforce (FATF), heightening the risk of substantial reputational and economic damage and increasing criminal threats to Australia’s financial system and professional services. Without hardening Australia’s AML/CTF regime in line with the FATF standards, criminals would continue to exploit legitimate Australian businesses left exposed. Further, currently regulated entities will continue to be subject to an overly complex regime that inflates regulatory costs, ultimately diminishing the extent to which they are able to holistically comply with the AML/CTF regime.
8.    To address these challenges, the proposed reforms have three objectives:

• combatting crime
• improving FATF compliance
• minimising regulatory burden.

1.    In line with the requirements set out in the Australian Government Guide to Policy Impact Analysis, administered by the Office of Impact Analysis (OIA), the Attorney-General’s Department (the department) has conducted an impact analysis to assess and accompany proposed reforms to Australia’s AML/CTF regime.
2.    The department (with support from Nous Group) has provided a best effort at conducting a robust net benefit analysis. In accordance with OIA guidance, a multi‑criteria analysis (MCA) was used as the preferred analytical tool to assess the available information and quantifiable data along with the unquantifiable but equally tangible benefits of the proposed reforms.
3.    The department has identified and analysed four viable policy options to respond to the problems identified, including:

• Option 1: Maintain the status quo
• Option 2: Simplify, clarify and modernise existing legislation
• Option 3: Expand the reporting population to DNFBPs
• Option 4: Both simplify, clarify and modernise legislation, and expand the reporting population to DNFBPs

1.    Under the analysis, Option 1 does not address the key challenges facing the regime or achieve the reform objectives. Option 2 provides some benefit to crime prevention outcomes and produces higher quality financial intelligence from assisting existing regulated entities to better comply with the regime. However, it does not reduce the risk of ‘greylisting’ by the FATF as it does not address the regulation of tranche two sectors. Option 3 does address this issue, as well as supporting crime prevention outcomes and increasing the amount of financial intelligence by covering a larger proportion of the economic activity at risk of exploitation. The quantifiable benefits of this are estimated to be up to $13.1 billion over ten years. However, Option 3 also comes with largest estimated regulatory impact of $15.8 billion to business, as it does not include simplifying and clarifying measures.
2.    Option 4 is assessed to best meet the objectives and showed the highest net benefit through the MCA, by providing the same quantifiable benefits as Option 3 while imposing a lower regulatory burden. Implementing Option 4 is expected to deliver the significant law enforcement benefits and reduction in community harm from the expansion of the regime to tranche two entities, with the additional benefit of improved compliance across regulated entities and tranche two entities due to the reforms to simplify the regime. This is estimated to provide benefits of up to $2.4 billion over ten years. Option 4 will also be most effective in minimising the likelihood of greylisting and any associated economic and reputational damage, which may be up to $10.7 billion over 10 years. Implementing Option 4 is estimated to result in an additional regulatory burden to businesses of $13.9 billion over 10 years, which is lower than Option 3.
3.     The department notes that there are inherent limitations to the impact analysis, including:

• Difficulty quantifying the value of money laundering globally and in Australia and the financial and societal impacts arising from money laundering. Estimates of benefits therefore reflect the best efforts and understanding of the department and portfolio agencies, supplemented with academic sources and international experience where possible. 
• A lack of evidence in the Australian context of the likely impact these reforms will have on the amount of money laundered per year.
• The details of the reforms are not yet finalised as the AML/CTF Rules will build on the principles in the Act and provide further detail on how such obligations may be achieved. As such, the operational impact of the reforms is difficult to quantify, particularly for tranche two entities who have no experience with the AML/CTF regime. Estimates of regulatory burden therefore reflect the best efforts and understanding of the affected stakeholders.
  • The department notes there will be an additional public consultation process on the Rules to ensure the reforms are fit-for-purpose. This will provide a further opportunity to reduce regulatory burden through further refinement of the obligations and simplification of the regime.

1.    The full Impact Analysis for the AML/CTF reforms is contained in the Explanatory Memorandum for the Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2024 (now an Act), which is available on the Parliament of Australia website at https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/Bills_Search_Results/Result?bId=r724

ATTACHMENT A

Explanation of the provisions in the Anti-Money Laundering and Counter-Terrorism Financing (2025 Rules) Amendment Rules 2026

Schedule 1—Reporting group amendments

Item 1—Subsection 2-1(1)

1.       This Item replaces the previous approach to reporting groups formed by groups of associated businesses (referred to as business groups). The new approach reduces the administrative burden of forming a reporting group for business groups that include a reporting entity by recognising the existence of a reporting group unless a relatively simple step is taken to prevent the reporting group existing. This amendment also provides greater legal certainty for reporting entities that do wish to be part of a reporting group by reducing the chances that an inadvertent oversight could prevent a reporting group from existing.

2.       The amendments to section 2-1 alter the conditions under which a business group is a reporting group. Under the amendments, a business group that includes a reporting entity is a reporting group unless a reporting entity in the group ‘opts out’. If one reporting entity opts out, the reporting group ceases to exist.

3.       New subsection 2-1(1) prescribes that a business group is ineligible to be a reporting group if:

o         a member of the business group that is a reporting entity gives the other reporting entities in the group notice in writing that it declines to be a member of a reporting group; and

o         the notice by the member has not been withdrawn (by further notice in writing to the other reporting entities in the group); and

o         the member that gave the notice continues to be a reporting entity.

4.       Subsection 2-1(1A) specifies that the notice requirements outlined in subsection 2-1(1) are taken to be effective if the reporting entity has taken reasonable steps to ensure that the notice is given to all the other reporting entities in the business group. The notice will not be invalid merely because a particular reporting entity did not receive the notice. This helps to provide legal certainty to reporting entities that they will not find themselves in a reporting group unexpectedly when they have taken reasonable steps to opt out of the existence of the reporting group.

Item 2—Paragraph 2-1(2)(a)

5.       This Item repeals and substitutes paragraph 2-1(2)(a) of the Rules.

6.       As amended, paragraph 2-1(2)(a) provides that, where paragraph 10A(1)(a) of the Act applies, the lead entity of a reporting group must be a member of the reporting group that is either:

o         the member of the reporting group that the members of the group who themselves satisfy paragraphs 2‑1(2)(b) and (d) have agreed, in writing, will be the lead entity of the group; or

o         appointed in writing as the lead entity of the reporting group by the person in the business group that controls each other person in the group.

7.       This amendment addresses circumstances in which identifying the lead entity of a reporting group can impose a significant administrative burden. This may arise, for example, where a reporting entity is significantly distanced from its controlling entity within a large and complex business group, making it impractical to obtain written agreement from multiple group members.

8.       The amendment provides an alternative mechanism for appointing a lead entity, allowing the controlling entity of the business group to appoint a lead entity in writing on behalf of the group.

9.       Where it is evident that only one member of a reporting group satisfies the eligibility criteria in subsection 2‑1(2), paragraph 2‑1(2)(a) does not require any further step to identify that member as the lead entity, if the lead entity records in writing its status as lead entity as part of its AML/CTF program.

Item 3—Paragraph 2-1(2)(c)

10.   This Item amends paragraph 2-1(2)(c) to require the lead entity of the reporting group to be the member that has the capability and authority (including by consent of group members) to develop and maintain the AML/CTF policies required by reporting entities in the group. This change ensures that the eligibility criteria for lead entities are not in conflict with foreign regulatory requirements, for example, under some foreign prudential regulation frameworks, that require the governing bodies of reporting entities operating overseas to exercise a degree of operational independence. The lead entity must still fulfil its obligations under sections 26F(5) and (6) of the Act to develop and maintain group AML/CTF policies.

11.   Paragraph 2‑1(2)(c) is intended to recognise that the necessary authority to do so may be conferred through a range of governance or operational arrangements (of which consent of group members is one example) rather than prescribing a particular mechanism by which that authority must arise.

Item 4—Subsection 2-1(3)

12.   This Item has been added after subsection 2-1(2) to account for the possibility that reporting groups of the type contemplated in section 2-1 may exist without a lead entity.  For example, this includes circumstances, where:

o         there is more than one member that satisfies the lead entity criteria, and they cannot agree on which of them should be the lead entity; or

o         a new member becomes eligible to be the lead entity (for example; if a reporting entity acquires the existing lead entity) and thereby makes the current lead entity ineligible.

13.   New paragraph 2-1(3)(a) specifies that a reporting group must not operate without a lead entity for a continuous period of more than 28 days. During the period within which a reporting group is operating without a lead entity, paragraph 2-1(3)(b) specifies that members of a reporting group must continue to comply with the AML/CTF policies of the most recent lead entity of the group (the previous lead entity) that applied to the member immediately before the previous lead entity ceased to be lead entity of the group. New subsection 2-1(3)(b) assists in ensuring business continuity for members of the group in the absence of a lead entity until a new lead entity is agreed upon or appointed.

Schedule 2—Enrolment and registration amendments

14.   Amendments contained in Schedule 2 are substantially administrative in nature and address gaps in the enrolment and registration framework to ensure all business structures are properly accommodated in the Rules and approved forms concerning enrolment and registration.

Item 1—Section 1-4

15.   This item defines “South Australian Electricity Legislation”. The definition of South Australian Electricity Legislation provides that the meaning of the term given by the Competition and Consumer Act 2010 applies. Under that Act, South Australian Electricity Legislation means:

o         the National Electricity Law set out in the Schedule to the National Electricity (South Australia) Act 1996 of South Australia as in force from time to time; and

o         any regulations, as in force from time to time, made under Part 4 of that Act.

Item 2—Paragraph 3-3(1)(g)

16.   This Item amends paragraph 3-3(1)(g) to require the collection of the date of birth of each beneficial owner of the applicant, in addition to their names, as part of an enrolment application.

Item 3—Paragraph 3-3(1)(ia)

17.   This Item inserts a new paragraph into subsection 3-3(1). New paragraph 3-3(1)(ia) requires an enrolment application to include information on whether the applicant is a Market Generator under the South Australian Electricity Legislation. This information is required to determine whether the applicant is eligible for an exemption from the industry contribution levy as determined by the Australian Transaction Reports and Analysis Centre Industry Contribution Act 2011.

Item 4 and 6—Paragraphs 3-3(5)(b) and 3-3(6)(d)

18.   These Items amends paragraphs 3-3(5)(b) and 3-3(6)(d) to include the full name of the body corporate, the address of the partner’s or trustees principal place of business or operations in Australia, and any unique identifiers to the list of information required to be collected for partnerships and trusts in an enrolment application made for the purposes of subsection 51E(1) of the Act, consistent with information requirements for other business structures. The term unique identifier is defined in section 1-4 of the Rules.

Item 5—Subparagraph 3-3(5)(d)(ia)

19.   This Item amends paragraph 3-3(5)(d) to insert a new subparagraph 3-3(5)(d)(ia) to include a unique identifier for the trust (if any has been given) to the list of information required to be collected for partnerships where a partner is a trustee of a trust in an enrolment application made for the purposes of subsection 51E(1) of the Act.

Items 7, 8, and 9—Subparagraphs 3-3(8)(c)(iii) and 3-3(8)(d)(iii)

20.   These Items repeal subparagraph 3-3(8)(c)(iii) and 3-3(8)(d)(iii) on the basis that there is no need to collect a further unique identifier for the reporting entity who is a member of a reporting group and the lead entity of the reporting group.

Item 10 and 11—Section 4-3

21.   These Items amend section 4-3 to add new subsection 4-3(2).

22.   Section 4-3 provides for the purpose of Part 4, Division 2 of the Rules, which is to prescribe the information that must be contained in a registration application made under subsections 75B(1), (2) and 76D(1) of the Act.

23.   Consistent with current practice, it is generally expected that most candidates applying for registration as a remittance affiliate of a RNP will adopt that RNPs AML/CTF program as permitted by section 26S of the Act. New subsection 4-3(2) contemplates that where this is the case, and, if a senior manager of the remittance affiliate has given or intends to give the approval referred to in subsection 26S(4) of the Act, the following provisions of the Rules do not apply to those candidates:

• sections 4-5, 4-6 and 4-8; and
• paragraph 4-12(a) to (c).

24.  These Items acknowledge that the information captured by sections 4-5, 4-6 and 4-8, and paragraphs 4-12(a) to (c) of the Rules will be information already captured under the RNP’s AML/CTF program that the remittance affiliate will adopt. Therefore, to avoid duplication in the collection of information, it is unnecessary for the remittance affiliate to provide that information in its registration application where it will be adopting its RNP’s AML/CTF program.

25.   If a person applying for registration as a remittance affiliate does not or does not intend to adopt its RNP’s AML/CTF program, the provisions listed in subsection 4-3(2) will continue to apply to those persons.

Items 12, 13 and 15—Section 4-4

26.   These Items amend paragraph 4-4(5)(b) and paragraph 4-4(6)(d) to include the full name of the body corporate, the address of the partner’s or trustees principal place of business or operations in Australia, and any unique identifiers to list of information required to be collected for partnerships and trusts respectively in a registration application made for the purposes of subsections 75B(1) and 76D(1) of the Act, consistent with information requirements for other business structures. The term unique identifier is defined in section 1-4 of the Rules.

Item 14—Subparagraph 4-4(5)(d)(i)

27.   This Item amends paragraph 4-5(5)(d) to insert a new subparagraph 4-4(5)(d)(ia) to include a unique identifier for the trust (if any has been given) to the list of information required to be collected for partnerships where a partner is a trustee of a trust in a registration application made for the purposes of subsections 75B(1) and 76D(1) of the Act. The term unique identifier is defined in section 1-4 of the Rules.

Item 16—Paragraph 4-7(aa) and (ab)

28.   This Item amends section 4-7 to insert two additional paragraphs requiring registration applications to provide details of each financial institution account used by the candidate in providing its registrable services. The required information includes the name of the financial institution and the account’s unique identifying details, such as the BSB and account number.

Item 17—Paragraphs 4-9(1)(ca) and (cb)

29.   This Item introduces two new paragraphs after paragraph 4-9(1)(c). Paragraphs 4-9(1)(ca) and (cb) extend the information requirements for registration applications in relation to a candidate’s key personnel. Specifically, these provisions require an application to include a description of the role performed by each individual who are key personnel in the candidate’s business, and where the individual is a senior manager or the AML/CTF compliance officer, details of the individual’s professional experience relevant to performing that role.

30.   These additional information requirements are intended to ensure that the description of an individual’s role captures a functional account of what the person actually does in the business. This recognises that job titles alone, which are collected under paragraph 4-9(1)(c), may be generic or may not fully reflect an individual’s responsibilities in practice.  

Item 18—Subsection 4-9(1A)

31.   This Item introduces a new subsection after subsection 4-9(1). Subsection 4-9(1A) of the Rules reproduces what was formerly paragraph 4-12(f) which has since been repealed by this Instrument. While paragraph 4-12(f) is no longer in force, the additional information requirements it prescribed for an application for registration was only applicable to candidate’s applying for registration as an independent remittance dealer or a remittance affiliate of a remittance network provider. New subsection 4-9(1A) extends the same requirements for information to be collected in an application for registration to all persons applying to be registered with AUSTRAC.

Item 19—Section 4-9A

32.   This Item adds a new section to Division 2 of Part 4 of the Rules. New section 4-9A sets out additional information required in an application for registration as a RNP. Section 4-9A requires a candidate applying for registration as a RNP to provide the following additional information in a registration application:

o        the number of remittance affiliates that it intends to apply to register with AUSTRAC within a 3-year period following registration;

o        when it intends to begin applying to AUSTRAC to register remittance affiliates on its network;

o        information setting out the AML/CTF policies that the candidate has in relation to the following matters:

        entering into a business relationship with a remittance affiliate;

        submitting reports of suspicious matters on behalf of registered remittance affiliates; and

        providing training to its remittance affiliates. 

33.   The intention behind collecting the information in paragraph 4-9A(a) is to capture whether the candidate plans to register remittance affiliates on its network. This assists the AUSTRAC CEO in assessing whether the candidate plans to register affiliates within a reasonable timeframe. Additionally, it allows for the future consideration of the cancellation of the person’s registration if the RNP does not register any remittance affiliates within the specified timeframe as there are no designated services being provided. This provision also assists the AUSTRAC CEO to detect whether an application for registration has been made for the purpose of on-selling the registration. For example; if a RNP does not intend to register any remittance affiliates within a specified period of time, the AUSTRAC CEO may question the utility and purpose of the registration application.

34.   Both paragraphs 4-9A(a) and (b) have relevance to the decision-maker's consideration of a registration application and provides the AUSTRAC CEO with information as to whether the candidate is legitimately going to be carrying on a business (this being is a decision-making factor pursuant to paragraph 4-15(e) of the Rules).

35.   Furthermore, this Item also allows the AUSTRAC CEO to consider the ML/TF risks associated with the candidate’s proposed provision of remittance services as a RNP.

Item 20—Section 4-12 (heading)

36.   This Item amends the heading of section 4-12 to include reference to remittance network providers (RNP) to indicate that the provision applies to RNPs in addition to independent remittance dealers and remittance affiliates of RNPs.

37.   Section 4-12 of the Rules sets out additional information required in an application for registration as an application for registration as a RNP, independent remittance dealer or a remittance affiliate or a registered RNP.

Items 21 to 24

38.   These Items are consequential to facilitate the amendment outlined in Item 16 of this Schedule.  

Schedule 3—Customer due diligence amendments

Item 1—Subsection 6-6(1A)

39.   This Item extends the operation of deemed compliance available in certain circumstances when a reporting entity is establishing whether the customer (other than trust or foreign equivalent) is receiving a designated service on behalf of another person. Where the deemed compliance provision under subsection 6-6(1) operates to remove the need, in practice, to identify such people , reporting entities will not, in practice, be required to establish whether such people are politically exposed persons or subject to targeted financial sanctions under paragraph 28(2)(e) of the Act. This recognises the practical challenges of doing this where the identity of the persons on whose behalf such a customer is receiving a designated service may not be known.  

Items 2 and 3—Paragraph 6-6(2)(b)

40.   Item 2 repeals paragraph 6-6(2)(b). This extends the deemed compliance with paragraph 28(2)(b) of the Act when a reporting entity provides a designated service to a customer that is a trust or equivalent foreign legal arrangement and the reporting entity establishes on reasonable grounds the identity of the beneficiaries of the trust or equivalent; or, if the nature of the trust or equivalent means it is not possible to identify individual beneficiaries, a description of each class of beneficiary. Previously this deemed compliance was only available for designated services provided at or through an overseas permanent establishment—the repeal of s6-6(2)(b) extends it to designated services provided at or through Australian permanent establishments as well.

41.   Item 3 removes “and designated service provided in foreign country” from the heading of subsection 6-6(2). This is a consequential amendment given the repeal of s 6-6(2)(b).

Item 4—Subsection 6-6(3)

42.   This Item extends the deemed compliance where a reporting entity provides a designated service to a customer that is a trust or foreign legal arrangement and it is not possible to identify individual beneficiaries. If the reporting entity establishes on reasonable grounds a description of each class of beneficiary,  the reporting entity is also taken to establish for the purposes of paragraph 28(2)(e) of the Act whether any person on whose behalf the customer is receiving the designated service is a  politically exposed person or designated for targeted financial sanctions. This recognises the practical impossibility of doing this if the reporting entity can only establish a description of each class of beneficiary.

Item 5—Subsection 6-7(1A), (1B) and (1C)

43.   This Item extends the customer types for which a reporting entity is not required to establish the identity of any beneficial owners.

44.   The amendments add the following kinds of customers (in addition to certain listed public companies under subsection 6-7(1)):

• a government body
• customers that are controlled by a certain listed public company
• customers that are controlled by a government body
• customers that are owned in whole or in part (directly or indirectly), but not controlled, by a listed company or government body

45.   Where a reporting entity establishes on reasonable grounds that a customer is of this type, and certain other specified requirements (see e.g., subsection 6-7(1C)) it is taken to have established the identity of any beneficial owners of the customer under paragraph 28(2)(d) of the Act.

Subsection 6-7(1A) (Government bodies)

46.   This Item inserts new subsection 6-7(1A), under this subsection where a reporting entity establishes, on reasonable grounds that the customer is a government body, the reporting entity is also taken to have established on reasonable grounds the matters mentioned in paragraph 28(2)(d) of the Act in relation to that customer. The effect of this is that reporting entities are not required to identify any beneficial owners of a customer that is a government body.

Subsection 6-7(1B) (Customers controlled by listed public companies or government bodies)

47.   This Item inserts new subsection 6-7(1B). Under this subsection, where a reporting entity establishes on reasonable grounds that the customer is controlled by:

o         a listed public company that is subject to public disclosure requirements ensuring transparency regarding the identity of its beneficial owners; or

o         a government body,

the reporting entity is taken to have established on reasonable grounds the matters mentioned in paragraph 28(2)(d) of the Act in relation to that customer. The effect of this provision is that reporting entities are not required to identify beneficial owners of the customer where control is exercised by a listed public company or government body.

Subsection 6-7(1C) (Partial ownership by listed public companies or government bodies)

48.   This Item inserts new subsection 6-7(1C) which provides that a reporting entity is taken to have established, on reasonable grounds, the identity of an individual who is a beneficial owner of the customer for the purposes of paragraph 28(2)(d) of the Act where:

o         the customer is owned in part (directly or indirectly), but not controlled, by a listed public company or government body; and

o         the individual is a beneficial owner of that listed public company or government body; and

o         the individual is a beneficial owner of the customer solely because of that ownership interest.

49.   The effect of this amendment is that reporting entities are not required to identify individuals whose beneficial ownership of a customer is indirect, - the individual is a beneficial owner of a certain listed public company or government body, which owns in part but does not control the customer. This avoids requiring reporting entities to trace beneficial ownership through entities that are already subject to public disclosure or government oversight, while preserving the obligation to identify beneficial owners arising through other ownership or control arrangements. The relief offered by this section 6-7 from establishing the identity of beneficial owners is not restricted to designated services provided at or through permanent establishments in Australia and applies to designated services provided anywhere in the world.

Item 6—Subsection 6-7(2)

50.   This Item is a consequential amendment to extend the relief from establishing whether a beneficial owner of a customer is a politically exposed person or subject to targeted financial sanctions to the new kinds of customers in subsections 6-7(1A),(1B) or (1C).

Item 7—Sections 6-10 and 6-11

51.   This Item makes a minor technical correction to sections 6-10 and 6-11 by clarifying that the reference to subsection 28(2) is a reference to subsection 28(2) of the Act.

Item 8—Subparagraph 6-18(1)(b)(i)

52.   This Item removes customers that are government bodies from the kinds of customers for which a reporting entity can apply simplified customer due diligence when establishing the identity of beneficial owners. This provision is no longer required in light of the amendments to relieve reporting entities from the requirement to establish the beneficial owners of government bodies in Items 5 and 6 above.

Item 9—Subparagraph 6-18(1)(b)(ii)

53.   This Item corrects the reference to “entity” in subparagraph 6-18(1)(b)(ii) and replaces it with reference to “person”.

Item 10—End of subsection 6-24(1)

54.   This Item inserts a Note at the end of subsection 6-24(1) which specifies that section 28 of the Act and section 6-33 of the Rules set out the matters that (subject to any relevant exceptions) must be established before the reporting entity commences to provide a designated service to the customer. Section 6‑24 provides an express trigger for a reporting entity to review, and where appropriate, update and reverify KYC information relating to the customer, as part of ongoing customer due diligence where the customer becomes a foreign PEP or a high‑risk domestic or international organisation PEP. The note is inserted to alert readers to this outcome.

Item 11—Paragraph 6-29(1)(ab)

55.   This Item inserts new paragraph 6-29(1)(ab) after paragraph 6-29(1)(a). This Item reinstates the conditions for entering into reliance arrangements under section 37A (CDD reliance agreements/ arrangements) of the Act that were previously in subrules 7.2.2(4) and (5). These align with the Financial Action Task Force Recommendation 17 that provides that where a reporting entity relies on another reporting entity or foreign equivalent, the other reporting entity or foreign equivalent must not only be subject to AML/CTF regulation but also in fact have in place measures to comply with customer due diligence and record keeping obligations.

Item 12—Paragraph 6-29(2)(b)

56.   This Item amends paragraph 6-29(2)(b) to insert ‘the level of the risks of money laundering, financing of terrorism and proliferation financing in’ before ‘the country and countries’.

Item 13—Paragraph 6-31(ab)

This Item inserts new paragraph 6-31(ab) which introduces an additional requirement under section 38 of the Act in relation to reliance on the collection and verification of KYC information or other procedures. Paragraph 6-31(ab) provides that for the purposes of a reliance arrangement, the other person must have measures in place to ensure compliance with their obligations under Part 2 (CDD) and Part 10 (Record-keeping requirements) of the Act, where that other person is a reporting entity. Where the other person is a person mentioned in subparagraph 6-31(a)(ii), the other person must have in place measures to ensure compliance with the equivalent laws of the foreign country.

Items 14 and 15—Paragraphs 6-32(4)(a) and 6-32(4)(b)

57.   These Items amend paragraphs 6-32(4)(a) and (b) in such a way that prescribes that for the purposes of subparagraph 29(c)(ii) of the Act the specified period is the period ending at the earlier of:

o         28 days after the exchange of contracts for the sale, purchase or transfer of land; and

o         3 days before the initially agreed day for the settlement of the sale, purchase or transfer of the real estate.

58.   Section 6-32 of the Rules permits delayed initial CDD for certain designated services provided in relation to real estate transactions. A delay under this section can only be applied in the following permitted circumstances:

o         the real estate agent acting for the seller or transferor of real estate may delay initial CDD in relation to the buyer/transferee,

o         the real estate agent acting for the buyer or transferee may delay initial CDD in relation to the seller/transferor,

o         a professional services provider (such as a legal practitioner or conveyancer) assisting  the buyer or transferee in a transaction to sell, buy or otherwise transfer real estate, may delay initial CDD in relation to their client.

59.   These amendments accommodate real estate agents and professional service providers in Tasmania and Western Australia where contracts for sale of residential real estate are typically conditional for a longer time, meaning that the 14 day period specified in former paragraphs –32(4)(a) and (b) would not have allowed for realisation of the benefits anticipated by section 6-32.

60.   The rationale for the amendment requiring initial CDD to be completed 3 business days before the initially agreed settlement date is to ensure that the reporting entity has sufficient time to implement any required ML/TF risk mitigation and management measures required under their AML/CTF policies.

Item 16—Section 6-33 (after heading)

61.   This Item updates section 6-33 by adding a new subheading titled “Reliance on arrangements for collecting and verifying KYC information”.

Item 17—Section 6-33

62.   This Item amends section 6-33 by inserting subsection “(1)” before “For”.

Item 19—Section 6-33

63.   These Items amend paragraph 6-33(f) to extend the period within which a reporting entity who is a participant in an arrangement in which another participating reporting entity that will provide a designated service related to the sale, purchase or transfer of the real estate will be able to collect and verify KYC information about the customer in accordance with paragraphs 28(3)(c) and (d) of the Act from no later than 15 days to no later than 28 days after the exchange of contracts for the sale, purchase or transfer.

64.   Paragraph 6-33(g) is also amended by these items to clarify the timeframe within which a reporting entity who is a participant in an arrangement of a kind mentioned in paragraph 6-33(f) where the arrangement enables the reporting entity to obtain the KYC information collected by another participating reporting entity, and copies of the data used by the other entity to verify the KYC information which must be at least 3 days before the initially agreed day for the settlement.

65.   As above, these amendments accommodate real estate agents and professional service providers in Tasmania and Western Australia where contracts for sale of residential real estate are typically conditional for a longer time, meaning that the 14 day period specified in former paragraphs 6–33(f) and (g) would not have allowed for realisation of the benefits anticipated by section 6-33.

66.   The rationale for the amendment requiring initial CDD to be completed 3 business days before the initially agreed settlement date is to ensure that the receiving reporting entity has sufficient time to implement any required ML/TF risk mitigation and management measures required under their AML/CTF policies.

Item 20—Subsection 6-33(2)

67.   This Item inserts new subsections 6-33(2) and (3) to address circumstances in which a counterparty customer of a brokering service does not cooperate with the reporting entity’s initial CDD obligations under section 28 of the Act. The provisions provide that where a reporting entity has taken all reasonable steps to establish the identity of a customer but is unable to do so due to that counterparty’s lack of cooperation, the reporting entity is taken to have established all relevant matters on reasonable grounds for the purposes of paragraph 28(6)(b) of the Act. The provisions also require the reporting entity to record the steps taken and any difficulties encountered in attempting to establish the matter, including their consideration of whether a suspicious matter reporting obligation arises in connection with the customer’s failure to cooperate. This amendment recognises that providers of item 5 of table 5 of section 6 of the Act are in an uncommon situation where their customer as specified in section 6 are not in any form of contractual arrangement with the reporting entity and the transaction will proceed without the reporting entity’s continued involvement.

Item 21 and 22—Subparagraphs 6-35(b)(iii) and 6-35(b)(iiia)

68.   These Items amend subparagraph 6-35(b)(iii) by removing the words “and other offences to the breach of sanctions” and insert a new subparagraph 6-35(b)(iiia) to separately specify “offences relating to the breach of sanctions”.

69.   New subparagraph 6-35(b)(iii) clarifies that not all proliferation financing offences relate to breaches of sanctions. The amendment separates proliferation financing offences and offences relating specifically to breaches of sanctions.

Item 23—Subparagraph 6-35(b)(va)

70.   Section 6-35 of the  Rules provides deems reporting entities to meet their obligations when  monitoring for unusual transactions and behaviours. This Item amends paragraph 6-35(b) to extend the list of offences to include offences involving prohibited hate groups. This includes offences within Division 114B of the Criminal Code (Cth) and any State or Territory equivalents. Generally, these offences relate to membership, recruiting, training, funding, supporting or directing the activities of prohibited hate groups.

Item 19—Section 6-37

71.   This Item amends section 6-37 to prescribe the following additional agencies that can issue a keep open notice pursuant to section 39B of the Act:

o         the Corruption and Crime Commission of Western Australia;

o         the Independent Commission Against Corruption of South Australia;

o         the office of the Independent Commissioner Against Corruption of the Northern Territory.

Schedule 4—Miscellaneous amendments

Item 1—Section 1‑4 (subparagraph (b)(ii) of the definition of tracing information)

72.   This Item amends subparagraph 1-4(b)(ii) of the definition of tracing information to correct the reference to “payer’s virtual asset holdings” to “payee’s virtual asset holdings” when defining tracing information with respect to the payee of a virtual asset transfer.  

Item 2—Subsection 2-2(11)

73.   This Item amends subparagraph 2-2(11) to correct the reference to subsection 10(2A) of the Act to subsection 10A(2A).  

Item 3—Paragraph 5-5(1)(d)

74.   This Item repeals paragraph 5-5(1)(d) which required a reporting entity’s AML/CTF policies to ensure that senior manager approval is obtained before continuing to provide designated services to a customer that becomes a foreign politically exposed person or high-risk domestic or international organisation politically exposed person. This paragraph has been replaced with new subsection 5-5(1A).

Item 4—Subsection 5-5(1A)

75.   This Item inserts subsection 5-5(1A) to replace previous paragraph 5-5(1)(d) of the Rules. The requirement for AML/CTF policies to deal with senior manager approval before continuing to provide designated services to a customer who has become a foreign politically exposed person or a high-risk domestic or international organisation politically exposed person has been replaced by a requirement for senior manager to determine as soon as practicable after the steps required by section 6-24 are completed, whether to continue to provide designated services. The effect of this amendment is that where an individual is in a business relationship with a customer, and that customer becomes a politically exposed person, the reporting entity may continue to provide designated services while senior manager determination takes place; put another way, the reporting entity is not compelled to cease providing designated services for the time it takes for the senior manager to determine approval or otherwise of the business relationship.

76.   This new prvovision interacts with new section 9-9A described below.

Item 5—Subsection 5-5(2)

77.   This Item amends the rule permitting foreign politically exposed persons to be treated as a domestic politically exposed person where the service is provided at or through a permanent establishment in the foreign PEP’s country to include reference to subsection 5-5(1A), in addition to subsection 5-5(1), to reflect the amendments in Item 4 of this Schedule.

Items 6 to 8 – sections 8-3, 8-4 and 8-5

78.  Items 6 to 8 of this Schedule amend Item 6 in each of the tables in section 8-3, 8-4 and 8-5 of the Rules so that Item 6 only apply to instructions given by use of an ATM for the withdrawal of money from an account held with a financial institution where the value will be made available to the payee as physical currency. The reduced ‘travel rule’ requirements do not extend to either deposits of money using ATMs, or deposits or withdrawals of virtual assets using crypto ATMs.

Item 9—Paragraph 8-8(7)(b)

79.   This Item extends a transitional provision.  Paragraph 8-8(7)(b) exempts reporting entities in their capacity as ordering institutions from needing to verify the specific elements of ‘payer information’ where certain circumstances are met, including the reporting entity has previously carried out the applicable customer identification procedure (within the meaning of the Act as in force immediately before 31 March 2026) or initial customer due diligence under section 28 of the Act in relation to the payer, and has complied with ongoing customer due diligence obligations under section 30 of the Act in relation to the payer. The exemption will remain conditional on there being no reasonable grounds to have doubts about the adequacy or veracity of the customer’s payer information. If such reasonable grounds exist, this will trigger the requirement to review, update and, where appropriate reverify KYC information about the customer under subparagraph 30(2)(c)(i) of the Act.

80.   This exemption has a new cut-off date of 1 July 2030. The exemption was previously limited to customers onboarded before 31 March 2026 but will now apply to ordering institutions accepting instructions for the transfer of value up to 1 July 2030.

81.   This is a transitional exemption, recognising that while reporting entities hold verified KYC information about such payers, many have not built systems to allow them to determine which elements of KYC information have been verified since the Act came into effect in 2007, nor to feed such information into their payments processing systems.

82.   The 2030 cut-off date aligns with the expected commencement of the revised Financial Action Task Force Recommendation 16 (which relates to the travel rule) and Australian payment system reforms.

Item 10—Section 9-4A

83.   This Item inserts new section 9-4A into Division 1 of Part 9 of the Rules. Section 9-4A is made for the purposes of subsection 41(5) of the Act, which allows the Rules to specify matters that must be taken into account when determining whether a reporting entity has reasonable grounds to form a suspicion for the purposes of paragraph 41(1)(d) to (j) of the Act.

84.   Section 9-4A specifies that in the circumstances described in paragraphs 6-33(2)(a) to (d) and 6-33(3)(a) to (d) of the Rules, a customer’s failure to cooperate is a matter to be taken into account in determining whether the reporting entity has reasonable grounds to form a suspicion of a kind mentioned in paragraph 41(1)(f) to (j) of the Act.

85.   Those circumstances relate to the provision of an item 1 of table 5 designated service (involving the brokering of the sale, or purchase or transfer of real estate) where the reporting entity has taken all reasonable steps to establish the identity of a customer (being either the buyer/ transferee or the seller/ transferor) but has been unable to do so because the customer has not cooperated. In these circumstances, section 9-4A prescribes that the customer’s lack of cooperation is a relevant consideration in assessing whether a suspicious matter reporting obligation arises.

Item 11—Section 9-9

86.   This Item repeals section 9-9 and replaces it with new section 9-9. The Item amends the compliance reporting timeframes to align with the Australian financial year and the Commonwealth Performance Framework as set out in the Public Governance, Performance and Accountability Act 2013 (that is, 1 July to 30 June, inclusive) rather than the calendar year.

87.   For the purposes of the first reporting period after the commencement of this instrument, paragraph 9-9(a) specifies that the first reporting period is the period beginning on 1 July 2026 and ending on 30 June 2027. To facilitate the transition to the new compliance reporting timeframe, no compliance report is required to be submitted for the period from 1 January 2026 to 30 June 2026. This is to allow reporting entities to focus resources on implementing the reforms during the transition period.

Item 12—Section 9-9A

88.   This Item inserts new sections 9-9A and 9-9A. Section 9‑9A is made for the purposes of subsection 48A(1) of the Act, which enables the AUSTRAC CEO to make Rules in relation to the amendment or withdrawal of reports given under sections 41, 43, 46 and 46A of the Act. The purpose of section 9‑9B is to establish a framework under which AUSTRAC may request that a reporting entity amends or withdraws a report submitted under sections 41, 43 and 46 of the Act.

89.   Subsection 9‑9B(1) provides that a reporting entity may amend or withdraw a report submitted under section 41, 43 or 46 of the Act only where requested by the AUSTRAC CEO.

90.   Subsection 9‑9B(2) sets out the circumstances in which the AUSTRAC CEO may make a request for amendment or withdrawal to a reporting entity. These include where the AUSTRAC CEO believes that the report:

o         contains an error;

o         is a duplicate of another report;

o         should not have been submitted; or

o         should be amended or withdrawn for operational reasons.

91.   For the purposes of paragraph 9‑9B(2)(a), an error may include circumstances where information contained in a report is factually incorrect, such as an incorrect date or other inaccurate detail. An error may also include circumstances where information was included in the report erroneously, even if the information itself is factually correct. This may include, for example, the inclusion of information that should not have been reported, such as a tax file number. This clarification is intended to make clear that the concept of an error is not limited to factual inaccuracies but also extends to the inappropriate inclusion of information in a report.

92.   Section 9‑9B distinguishes between:

o         a notification by a reporting entity that an issue has been identified with a report; and

o         a request made by AUSTRAC for the amendment or withdrawal of that report.

93.   This section is intended to operate on the basis that a reporting entity may notify AUSTRAC where it becomes aware of an issue with a report, such as an error, duplication, or where the report should not have been submitted. Upon receiving such a notification, AUSTRAC may consider the matter and, where the AUSTRAC CEO believes it is appropriate, request that the reporting entity amend or withdraw the report.

94.   Any amendment or withdrawal occurs only in response to a request made by AUSTRAC, which may take the form of AUSTRAC returning the report to the reporting entity for correction or amendment. This makes clear that the reporting entity’s role is limited to notification, and that the request to amend or withdraw a report arises only when initiated by AUSTRAC under section 9‑9B.

Item 13—At the end of Part 11

95.   This Item introduces new sections 11-2 and 11-3. New subsection 11‑2 prescribes, for the purposes of subsection 228A(1) of the Act, that the AUSTRAC CEO may arrange for the use, under the AUSTRAC CEO’s control, of computer programs for any purpose for which the AUSTRAC CEO may or must take administrative action under a provision prescribed by the Rules.

96.   The following provisions of the Act are prescribed for this purpose:

o         section 51D;

o         subsection 75K(2); and

o         subsection 76M(2).

97.   Item 11 has been inserted at the end of Part 11 and prescribes the information that an application for requesting a review of a reviewable decision made by a delegate of the AUSTRAC CEO for the purposes of paragraph 233D(3)(b) of the Act must contain.

98.   A person who is the subject of a reviewable decision has the right to apply to the AUSTRAC CEO for reconsideration of the decision under section 233D of the Act. Subsection 233D(3) requires that the application must:

o         be in the approved form; and

o         contain the information required by the Rules; and

o         be made within:

i.      30 days after the applicant is informed of the decision; or

ii.      such longer period as the AUSTRAC CEO (whether before or after the end of the 30-day period allows).

99.   The information collected in these applications supports the AUSTRAC CEO (or delegate) in conducting a merits-based assessment of the review application.

ATTACHMENT B

Explanation of the provisions in the Anti-Money Laundering and Counter-Terrorism Financing (Class Exemption and Other Matters) Amendment Rules 2026

Schedule 1 – Amendments

Item 1 – Paragraph 1.21

Definition of “domestic transfer of value”

1.        This Item inserts the term “domestic transfer of value” into paragraph 1.2.1 of the instrument and refers to a a transfer of value where the value to be transferred is in Australia and, as a result of the transfer, the value will be in Australia. The definition focuses on where the value starts out and finishes up, rather than the location of the payer (gift card holder) or payee (merchant). This definition is referred to in the new Chapter 6 of the Class Exemption Amendment Rules.

Definition of “gift card”

1.      This Item inserts the definition of ‘gift card’ in paragraph 1.21 of the instrument which means a stored value card that is a gift card within the meaning of Schedule 2 to the Competition and Consumer Act 2010 (the Australian Consumer Law). This definition is referred to in the new Chapter 6 of the Class Exemption Amendment Rules, which provides exemptions related to transfers of value arising from the use of gift cards.
2.        Under the Australian Consumer Law, gift card means an article (whether in physical or electronic form) that:
   • is of a kind that is commonly known as a gift card or gift voucher; and
   • is redeemable for goods or services; or
   • an article of a kind specified in regulations made for the purposes of this paragraph;

but does not include an article of a kind:

• is redeemable for goods or services; and
• can have its value increased after it is supplied other than because of a reversal of a payment made using the article or the correction of an error;
• that is only redeemable in relation to one or more of the following:
  • electricity;
  • gas;
  • a telecommunications service.

1.        This definition is adopted as it is well understood by participants in the stored value card sector.

Item 2 – Chapters 2 to 9

Chapter 2—Matters relating to professional services

1.        Chapter 2 has been inserted into the Class Exemptions Amendment Rules to specify additional circumstances to those in the Act in which receiving, holding and controlling and managing a customer’s money (etc.) is not subject to AML/CTF regulation.
2.        The new rule 2.1 excludes property management services from the scope of AML/CTF regulation under the designated service in item 3 of table 6 in section 6 of the Act. Specifically, the rule excludes services by a real estate agent of receiving, holding and controlling, or managing money, accounts or other property as part of managing rental income or expenses through a trust account.
3.        Rule 2.1 is consistent with the Parliamentary intention of item 3 of table 6 as articulated in the Explanatory Memorandum of the Act. Property management services are also not required to be regulated under the Financial Action Taskforce Recommendations.
4.        Section 2.1 includes the payment of rent by the tenant to the real estate agency and then from the real estate agency to the landlord as well as payments and disbursements from the real estate agency trust account such as payment of strata fees, rates, smoke alarm testing and maintenance (for example).

Chapter 3—Exemption from initial customer due diligence—automatic teller machines

1.        When a person withdraws money from an ATM, the operator of the ATM makes transferred value available to the person and is therefore a beneficiary institution. Chapter 3 has been inserted into the Rules to relieve ATM operators of the obligation to undertake initial CDD in the following circumstances:
   • the withdrawal is an occasional transaction within the meaning under section 5 of the Act.  That is, the person withdrawing money does not have an existing business relationship with the beneficiary institution such as holding a bank account. If the person withdrawing money is in a business relationship with the ATM operator, the reporting entity will already have undertaken CDD in relation to the person as their customer;

• the instruction is for the withdrawal of money from an account held with a financial institution—the exception does not extend to withdrawals of virtual assets;
• the instruction was given by use of an ATM;
• the value will be made available to the payee as physical currency, and
• the value transferred as a result of the withdrawal, and any other making available of transferred value which is linked or appears to be linked, is less than $10,000.

1.    The exemption does not extend to ongoing CDD obligations under section 30 of the Act. For occasional transactions, this means that ATM operators must monitor for unusual transactions and behaviours.
2.    Chapter 3 will operate for a period of 10 years and repeal on 31 March 2036. This is intended to prompt a review of the exemption at an appropriate time, including whether the exemption should be contained in primary legislation.

Chapter 4—Exemption from initial customer due diligence—transfer of value to self-hosted virtual asset wallet

1.    A business that deposits virtual assets into a self-hosted virtual asset wallet on behalf of a customer who controls the self-hosted virtual asset wallet is making value available to the controller of the self-hosted virtual asset wallet (who will be the reporting entity’s customer under item 30 of table 1 in section 6 of the Act) and is therefore a beneficiary institution. Chapter 4 has been inserted into the Class Exemptions Amendment Rules to relieve a beneficiary institution, such as a virtual asset service provider, of the obligation to undertake initial CDD on the customer in the following circumstances:
   • the depositing of virtual assets into a self-hosted virtual asset wallet is an occasional transaction within the meaning under section 5 of the Act, that is the customer controlling   the self-hosted virtual asset wallet does not have an existing business relationship with the beneficiary institution;
   • the instruction for the transfer of value is for the withdrawal of virtual assets held by the reporting entity in an account provided to the payer or otherwise on deposit for the payer (e.g. in a custodial virtual asset wallet);
   • the transferred virtual assets will be made available to the payee by depositing virtual assets into a self-hosted virtual asset wallet controlled by the payee; and
   • the value of the transferred virtual assets, and any other making available of transferred value (service covered by item 30 of table 1 in section 6 of the Act) which is linked or that appears to be linked, is less than $1,000.
2.    Chapter 4 clarifies that it was not Parliament’s intent to require beneficiary institutions such as virtual asset service providers  to undertake initial CDD for all holders of third party self-hosted wallets to whom they make virtual assets available.
3.    Chapter 4 will operate for a period of 10 years and repeal on 31 March 2036. This is intended to prompt a review of the exemption at an appropriate time, including whether the exemption should be contained in primary legislation.

Chapter 5—Exemption from initial customer due diligence—transfer of value using gift card issued by reporting entity

1.    Under items 21 to 24 of table 1 in section 6 of the Act, issuing a stored value card and increasing monetary value stored in connection with a stored value card are designated services. These designated services are subject to legislated thresholds of $1,000 (for stored value cards that permit withdrawal of cash) and $5,000 otherwise.
2.    Open-loop stored value cards, e.g. stored value cards that are generally useable wherever a card is accepted and not restricted to particular providers of goods and services, can also trigger the transfer of value designated services in items 29, 30 and 31 of table 1 in section 6 of the Act. These designated services do not have any statutory thresholds. This means that before any transfer of value service is provided, the person who accepts the instruction to transfer value would ordinarily have to undertake initial customer due diligence on the payer, generally the holder of the card or gift recipient. This is generally not feasible for gift cards, where the holder of the card will often not be known to the issuer of the card.
3.    Chapter 5 has been included in the Rules to provide a conditional exemption under section 39 of the act from carrying out initial CDD for transfers of value arising from the use of open-loop gift cards issued by reporting entities.
4.    The exemption applies where all of the following conditions are met:
   • the designated service of accepting an instruction for the transfer of value is an occasional transaction, i.e. it is not provided as part of an ongoing business relationship with the payer;
   • the gift card was issued by a reporting entity;
   • the instruction for transfer of value is given by use of a gift card
   • issuing the gift card is not a designated service—that is, the gift card is not above the applicable statutory threshold;
   • the value of the gift card cannot be increased (other than as a result of a reversal of payment made using the card or the correction of an error);
   • no part of the value stored on the gift card may be withdrawn in cash;
   • the value to be transferred is money (i.e. not virtual assets or property);
   • if the gift card was issued on or after 31 March 2029, the transfer of value is a domestic transfer of value; 
   • if the gift card was issued on or after 30 September 2027, the ordering institution has reasonable grounds to believe that the administrator of the scheme in which the gift card can be used has taken reasonable steps to mitigate and manage the risk that the card will be used as an instrument of money laundering, financing of terrorism or other crimes.
5.    The term “domestic transfer of value” is inserted in paragraph 1.2.1 and refers to a transfer of value where the value to be transferred is in Australia and, as a result of the transfer, the value will be in Australia. The definition focuses on where the value starts out and finishes up, rather than the location of the payer (gift card holder) or payee (merchant). The condition that the transfer is a domestic transfer of value is subject to a three-year transition period to allow time for systems changes.
6.    The final condition recognises that there are money laundering, terrorism financing and other crime risks associated with stored value cards, such as those set out in AUSTRAC’s Stored Value Card Risk Assessment (2017). The risks arise both when a gift card is purchased by a victim of criminal activity at the instruction of the criminal, or where a gift card is used directly by a criminal in the furtherance of their illicit activities.
7.    Given the variety of gift card schemes and business models, it is not possible to prescribe the steps that are reasonable in all cases, but administrators of gift card schemes should take reasonable steps to address risks highlighted by relevant agencies such as the National Anti-Scam Centre, the Australian Centre to Counter Child Exploitation and AUSTRAC. This risk mitigation and management condition is subject to an 18-month transition period to allow time for gift card issuers to review their existing products and processes (most of which already have some risk mitigations in place).
8.    Examples of risk mitigations and controls for administrators of gift card schemes may include:
   •          imposing a limit on the number of cards that can be sold to any one individual in store and online within a certain time period where there is no apparent lawful or economic purposes (note that sales to corporate customers may involve a lawful or economic purpose);
   •          monitoring transactions undertaken using gift cards and reporting suspicions of criminal activity to appropriate agencies where required;
   •          imposing an appropriate limit on the value that can be stored on a card;
   •          maintaining open communication with the reporting entity issuer of the gift card to support their efforts to identify suspicious matters that must be reported to AUSTRAC;
   •          keeping up to date with communications from relevant authorities (including the National Anti-Scams Centre, Australian Centre to Counter Child Exploitation and AUSTRAC) about risks of criminal activity related to gift cards and recording what actions are taken in response.
9.    Chapter 5 will operate for a period of 5 years and repeal on 31 March 2031. This is intended to prompt a review of the exemption at an appropriate time, including whether the exemption should be contained in primary legislation.

Chapter 6—Gift card issued by person not providing designated services

1.    Chapter 6 sets out a conditional exemption from AML/CTF regulation for transfers of value arising from the use of gift cards where the instruction is accepted by a person who would otherwise be unregulated for AML/CTF purposes. This relates primarily to open-loop gift cards, e.g. stored value cards that are generally useable wherever a card is accepted and not restricted to particular providers of goods and services, issued by shopping centres, gift card businesses and others where they accept the instruction to transfer value instead of a partner financial institution.
2.    The exemption operates by specifying that such businesses are not ordering institutions or beneficiary institutions, which means that the associated designated services in items 29 and 30 of table 1 in section 6 are not provided (such services can only be provided in the capacity of an ordering or beneficiary institution).
3.    There is no need to exempt persons from being intermediary institutions since an intermediary institution can only exist in a value transfer chain where there is an ordering institution and a beneficiary institution.
4.    Rule 6.1 specifies the conditions, all of which must be satisfied, for a person not to be an ordering institution:
   • the person accepts an instruction for the transfer of value that is given by use of a gift card;
   • the gift card was issued by the person in the course of carrying on a  business that does not otherwise involve the provision of designated services—any person who provides another designated service will be already be a reporting entity and so must look at Chapter 5 above to determine if they are exempt from initial CDD;
   • issuing the stored value card was not a designated service, that is, it is below the relevant statutory threshold;
   • the value stored on the card cannot be increased (other than as a result of a reverse of payment made using the card or the correction of an error);
   • no part of the value stored in connection with the gift card may be withdrawn in cash;
   • if the gift card was issued on or after 31 March 2029, the transfer of value is a domestic transfer of value;
   • if the gift card was issued on or after 30 September 2027, the person has taken reasonable steps to mitigate and manage the risk that the card will be used as an instrument of money laundering, financing of terrorism or other crime.
5.    Examples of risk mitigations and controls for administrators of gift card schemes may include:
   •          imposing a limit on the number of cards that can be sold to any one individual in store and online within a certain time period where there is no apparent lawful or economic purposes (note that sales to corporate customers may involve a lawful or economic purpose);
   •          monitoring transactions undertaken using gift cards and reporting suspicions of criminal activity to appropriate agencies where required;
   •          imposing appropriate limits on the value that can be stored on a card
   •          keeping up to date with communications from relevant authorities (including the National Anti-Scams Centre, Australian Centre to Counter Child Exploitation and AUSTRAC) about risks of criminal activity related to gift cards and recording what actions are taken in response
6.    As with Chapter 5 above, the time periods specified in the conditions provide transition periods for gift card issuers to review their systems and products.
7.    Rule 6.2 outlines the conditions that must be met for a person not to be a beneficiary institution and mirror the conditions for a person not to be an ordering institution.
8.    Chapter 6 will operate for a period of 5 years and repeal on 31 March 2031. This is intended to prompt a review of the exemption at an appropriate time, including whether the exemption should be contained in primary legislation.

Chapter 7—Services provided by barristers to Australian government bodies

1.    In accordance with the exemption power in subsection 247(3), Chapter 7 provides that the Act does not apply to a designated service in circumstances where a barrister provides a designated service listed in table 6 of section 6 of the Act, to a client who is an Australian government body.
2.    Many Commonwealth, State and Territory bodies have in-house solicitors directly engage barristers for advice without instructing an external solicitor. In these circumstances, the barrister will engage directly with the relevant government body. As these engagements do not involve an instructing solicitor, they would not fall within the exemption in subsection 6(6B) of the Act.
3.    Australian government body is defined in section 5 of the Act to mean:
   •          the Commonwealth, a State or Territory; or
   •          an agency or authority of:
     1.       the Commonwealth;
     2.       a State; or
     3.       a Territory.
4.    At a general level, this definition covers Australian government bodies which are emanations of an Act of Parliament of a State or Territory.
5.    At the Commonwealth level, Australian government body includes all Non-Corporate Commonwealth Entities, Corporate Commonwealth Entities, and Government Business Enterprises. At the State and Territory level, Australian government body includes government departments, agencies, offices, entities and local government councils/authorities.
6.    Companies, trusts, partnerships or other associated entities created by council or councillors for the exercise of council functions or activities are not within the scope of the Chapter 7 exemption.

Chapter 8—Clearing and settlement facilities

1.    In accordance with the exemption power in subsection 247(3), Chapter 8 provides that the Act does not apply to the provision of a designated service in table 6 of section 6 where that designated service is:
   • provided by the operator of a clearing and settlement facility or a member of a business group that includes the operator of a clearing and settlement facility; and
   • incidental to the operation of that clearing and settlement facility.
2.    Clearing and settlement facilities can involve persons acting as nominee shareholders or corporate office holders purely to facilitate the operation of the clearing and settlement facility.
3.    Chapter 8.1 incorporates the definition of ‘clearing and settlement facility’ as defined by the Corporations Act 2001. Under that Act, subsection 768A(1) defines a clearing and settlement facility as a facility that provides a regular mechanism for the parties to transactions relating to financial products to meet obligations to each other that arise from entering into the transactions. Chapter 8.1 also incorporates the definition of ‘business group’. The term has the same meaning as in section 5 of the Act.
4.    Chapter 8 will operate for a period of 5 years and repeal on 31 March 2031. This is intended to prompt a review of the exemption at an appropriate time, including whether the exemption should be contained in primary legislation.

Chapter 9—Legal assistance

1.    New Chapter 9 provides exemptions from the Act for certain designated services provided by organisations and individuals in the legal assistance sector.  This is consistent with the FATF’s Risk‑Based Approach Guidance for Legal Professionals, which provides that the FATF Recommendations do not apply where a legal professional provides only litigation advice or routine advice through legal aid or other legal help clinics.

Chapter 9.1- incidental services provided by community legal centre or legal aid

1.    Rule 9.1 provides that the Act does not apply to a designated service where:
   •          the service is covered by item 1, 3 or 4 of table 6 in section 6 of the Act; and
   •          the service is incidental to the provision of professional legal services that are not designated services; and
   •          the service is:
     1.       provided by a person who is accredited under the National Accreditation Scheme of Community Legal Centres Australia; or
     2.       provided by an Aboriginal and Torres Strait Islander Legal Service or Family Violence Prevention and Legal Service that receives funding under the National Access to Justice Partnership agreement between the Commonwealth and the States and Territories; or
     3.       provided by or paid for by a legal aid commission.
2.    The exemption applies to the designated services which can arise for legal assistance sector originations where they are incidental to a legal service that is not itself directly a designated service, for example, incidental to the provision of services relating to family law, domestic and family violence, residential tenancy law, consumer law and financial rights law, employment and workplace law, anti-discrimination and human rights law, immigration law services (including refugees and asylum related matters), homelessness, or Indigenous-specific legal services as are offered by legal assistance sector organisations.
3.    The exemption is limited to legal assistance sector organisations which are recognised for genuine contributions to addressing barriers to the justice system by providing essential legal services to people in need. Community Legal Center Australia’s National Accreditation Scheme is a quality assurance process that supports and recognises good practice in the delivery of community legal services through assessing and accrediting member centres in every Australian state and territory. When a community legal centre is accredited, it is assessed as meeting minimum key performance standards and the centre’s clients, communities, funders and other stakeholders can be assured of high-quality service provision. Accreditation under the National Accreditation Scheme of Community Legal Centres Australia is a pre-condition to receive Commonwealth and State/Territory funding under the National Access to Justice Partnership agreement (NAJP), however in some jurisdictions Aboriginal and Torres Strait Islander Legal Services or Family Violence Prevention and Legal Services are not required to be accredited, but are also assessed as genuine providers of legal assistance.
4.    In the legal aid context, the exemption applies to the legal aid commissions of each of Australia’s states and territories. It also applies to private law firms providing the specified designated services to individuals in receipt of a grant of legal aid where the designated service is incidental to another service.
5.    Most community legal centre and legal aid clients are individuals experiencing financial disadvantage or that are marginalised in other ways and face barriers to accessing justice. Typically, a community legal centre or legal aid client falls within the national priority client groups under the National Access to Justice Partnership Agreement (NAJP). Some clients may call outside of the national priority client groups, but will experience financial disadvantage, discrimination, or be marginalised in some other way.  Moreover, the nature of the services provided to such clients is infrequently transactional, and often the dominant purpose of these engagements is for the provision of legal advice or legal representation to vulnerable persons that are socially and/or economically disadvantaged and cannot afford a private lawyer.
6.    It is also a condition of the exemption that the service triggering the designated service is incidental to the provision of another legal matter that is not a designated service. For example, a provider giving assistance in a marriage dissolution matter which requires transfer or sale of real estate or other property as a part of the financial settlement would benefit from this exemption. In contrast, a provider assisting a client to create a body corporate for charitable purpose is in direct receipt of a designated service and this exemption would not apply.
7.    The effect of this exemption is that CLCs, and specified Aboriginal and Torres Strait Islander or Family Violence Prevention and Legal Service legal services are not subject to AML/CTF obligations when they provide certain designated services that are incidental to the provision of legal assistance, including legal advice and representation.

Chapter 9.2-- services provided by duty lawyers

1.    Chapter 9.2 is made under of subsection 247(3) of the Act. It provides that the Act does not apply to certain designated services provided by lawyers or advocates providing services through a legal assistance arrangement, including duty lawyers or advocates appearing at a court or tribunal. While it will be uncommon for services provided by duty lawyers and advocates appearing at a court or tribunal to involve the provision of a designated service, the exemption is made to ensure that essential legal assistance delivered in time‑critical court and tribunal environments to financially disadvantaged and unrepresented litigants is not adversely affected by uncertainty as to whether a service constitutes a designated service, or delayed by the need to undertake CDD.

1.    This exemption applies where the service is a designated service covered by Table 6 in section 6 of the Act, and the service is provided to a client by a person in the course of practice as a duty lawyer or advocate at a court or tribunal.
2.    The purpose of this exemption is to ensure that the AML/CTF regime does not apply to legal assistance regimes operating to assist people in need in the public interest, such as advice or representation provided by duty lawyers to unrepresented individuals appearing before a court or tribunal. 
3.    Examples of services captured by the exemption include circumstances where a duty lawyer or advocate provides legal advice or limited advocacy that could otherwise fall within a Table 6 designated service, such as assisting a person in relation to the resolution of a matter before a court or tribunal (for example, advice or representation connected to the settlement or disposition of a legal matter dealt with at a single hearing).
4.    Chapter 9 will operate for a period of 7 years and repeal on 31 March 2033. This is intended to prompt a review of the exemption at an appropriate time, including whether the exemption should be contained in primary legislation.

ATTACHMENT C

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Anti-Money Laundering and Counter-Terrorism Financing (2025 Rules) Amendment Rules 2026

Anti-Money Laundering and Counter-Terrorism Financing (Class Exemption and Other Matters) Amendment Rules 2026

The Anti-Money Laundering and Counter-Terrorism Financing (2025 Rules) Amendment Rules 2026 and Anti-Money Laundering and Counter-Terrorism Financing (Class Exemption and Other Matters) Amendment Rules 2026 are compatible with the human rights and freedom recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview

1.        The Anti-Money Laundering and Counter-Terrorism Financing (2025 Rules) Amendment Rules 2026 (the Amendment Rules) amend the Anti-Money Laundering and Counter-Terrorism Financing Rules 2025 (the AML/CTF Rules 2025). The Amendment Rules make targeted and technical amendments to fully operationalise the Act and the Rules, correct minor drafting errors, and clarify and improve the effectiveness of the AML/CTF regime. The Anti-Money Laundering and Counter-Terrorism Financing (Class Exemption and Other Matters) Amendment Rules 2026 (the Class Exemption Amendment Rules) amend the Anti-Money Laundering and Counter-Terrorism Financing (Class Exemption and Other Matters) Rules 2007 by including a number of rules-based exemptions.
2.        For the purposes of this Statement of Compatibility, the Amendment Rules and the Class Exemption Amendment Rules are together referred to as the Instruments.
3.        This Statement of Compatibility should be read together with the Statement of Compatibility with Human Rights for the AML/CTF Rules 2025. The analysis below focuses on whether, and to what extent, the Amendment Rules engage human rights beyond those already considered in that earlier Statement.

Human rights implications

1.        The Instruments may engage, directly or indirectly, the following human rights:

• the right to protection against arbitrary or unlawful interference with privacy, and unlawful attacks on honour or reputation, in Article 17 of the International Covenant on Civil and Political Rights (ICCPR);
• the right to equality and non-discrimination, in Articles 2, 16 and 26 of the ICCPR
• the right to a fair hearing and equality before courts and tribunals, in Article 4 of the ICCPR; and
• the right to work, in Article 6 of the International Covenant on Economic, Social and Cultural Rights (ICESCR).

1.        The Instruments do not engage any additional human rights beyond those considered in the Statement of Compatibility for the AML/CTF Rules 2025.

Protections against arbitrary or unlawful interference with privacy, and unlawful attacks on honour or reputation—Article 17 of the ICCPR

1.        Article 17 of the ICCPR provides that no one shall be subjected to arbitrary or unlawful interference with his or her privacy, family, home or correspondence. Article 17 of the ICCPR also provides that a person must not be subjected to unlawful attacks on his or her honour or reputation.
2.        The protection for privacy under Article 17 can be permissibly limited to achieve a legitimate objective and where the limitations are lawful and not arbitrary. The term ‘unlawful’ in Article 17 of the ICCPR means no interference can take place except as authorised under domestic law.
3.        The terms ‘arbitrary’ means that any interference with privacy must be in accordance with the provisions, aims and objectives of the ICCPR and should be reasonable in particular circumstances. The United Nations Human Rights Committee (UNHRC) has interpreted ‘reasonableness’ to mean that any limitation must be proportionate and necessary in the circumstances. In this case, the legitimate end is the protection of public safety, addressing crime and protecting the rights and freedoms of individuals by requiring certain personal information to be collected, retained and disclosed to support relevant investigations.
4.        Measures in the Amendment Rules that may engage the protection against arbitrary and unlawful interference with privacy in Article 17 of the ICCPR include:
   1.        the amendments to the enrolment and registration provisions;
   2.        the amendments to customer due diligence provisions; and
   3.        information requirements for applications for reconsideration of certain decisions made by delegate/s of the AUSTRAC CEO.

Enrolment and registration amendments

1.    The Amendment Rules clarify and extend information requirements for persons enrolling and/ or registering with AUSTRAC, including by:
   1.        specifying additional information requirements for certain partners, trustees, and key personnel;
   2.        requiring information about prior involvement of key personnel in providers offering the same or similar services (for registration applications only); and
   3.        introducing additional information requirements for application for registration as a remittance network provider.
2.    These amendments may require the collection, use and disclosure of additional personal information and therefore engage the right to privacy in Article 17 of the ICCPR. However, the information required by the Amendment Rules is limited to what is necessary to enable AUSTRAC to assess suitability, manage money laundering and terrorism financing risk of persons enrolling and/or registering with AUSTRAC, and to assist with effectively supervising known high‑risk sectors such as those sectors providing remittance and virtual asset services.
3.    Any information collected by AUSTRAC under these provisions constitutes “AUSTRAC information” and is subject to the secrecy and access provisions outlined in Part 11 of the Act, as well as applicable privacy protections under Australian law. The provisions in Part 11 of the Act restrict the access, use or disclosure of AUSTRAC information to a limited range of legitimate purposes.
4.    To the extent that these provisions would constitute a limitation on the protection against arbitrary or unlawful interference with privacy, any interference is reasonable, necessary and proportionate.

Customer due diligence amendments

1.    The Amendment Rules also make targeted amendments to customer due diligence (CDD) obligations, including by:

• clarifying when a reporting entity is taken to have established certain matters on reasonable grounds;
• refining requirements relating to politically exposed persons and persons subject to targeted financial sanctions;
• extending or aligning certain timeframes for the completion of CDD for real estate agents; and
• expanding the categories of offences monitored for the purpose of identifying suspicious matters.

1.    These provisions may involve the collection and handling of personal information and therefore may engage the right to privacy. However, the amendments do not expand the scope of persons subject to CDD. Instead, the provisions clarify and refine existing obligations and, in some cases, alleviate regulatory burden by extending timeframes for the completion of CDD.
2.    In addition to AML/CTF obligations, reporting entities under the  Act are responsible entities under the Privacy Act 1988 (even where other exemptions may usually apply—see section 6E of that Act), and are required to comply with the Australian Privacy Principles including the requirement to implement data protection policies, systems and controls in place where they collect and handle personal information.
3.    As with the AML/CTF Rules 2025, the CDD framework is risk-based, with safeguards to ensure that information is collected and used only for legitimate AML/CTF purposes. To the extent that the CDD amendments constitute a limitation on the protection against arbitrary or unlawful interference with privacy, the legislative requirements and other safeguards ensure that any interference is reasonable, necessary and proportionate.

Information requirements for applications for reconsideration of certain decisions made by delegates of the AUSTRAC CEO

1.    The Amendment Rules prescribe information requirements for applications for reconsideration of certain decisions made by delegates of the AUSTRAC CEO. These requirements may involve the provision of personal information about applicants and their representatives.
2.    The collection of this information is limited to what is necessary to enable effective reconsideration and procedural fairness. Appropriate safeguards apply to the handling of this information. Any impact on privacy is therefore reasonable, necessary and proportionate.

Right to equality and non-discrimination, in Article 2, 16, and 26 of the ICCPR

1.    Articles 2, 16, and 26 of the ICCPR provide for the right of equality and ‑non-discrimination. All persons are equal before the law and are entitled without any discrimination to the equal protection of the law. Discrimination is prohibited, and laws should guarantee to all persons equal and effective protection against discrimination on any ground such as race, colour, sex, language, religion, political or other opinion, national or social origin, property, birth or other status.
2.    Certain provisions of the Amendment Rules may result in differential treatment of individuals, including politically exposed persons, key personnel, or persons connected with higher risk services (such as those providing services in the remittance and virtual asset sectors). These distinctions are based on assessed ML/TF risk and reflect internationally accepted standards developed by the Financial Action Task Force.
3.    The United Nation Human Rights Committee recognises that “not every differentiation of treatment will constitute discrimination, if the criteria for such differentiation are reasonable and objective”. While the Amendment Rules may require additional measures to be applied to persons because of their occupation or country of residence, these measures are reasonable, necessary and proportionate to the legitimate objective of managing and mitigating ML/TF risk.

Right to Work—Article 6 of the ICESCR

1.    Article 6 of the ICESCR recognises the right to work as a fundamental human right. It affirms that everyone has the right to the opportunity to gain their living by work which they freely choose or accept.
2.    The Amendment Rules may indirectly engage this right by clarifying matters relevant to registration decisions and the assessment of key personnel. As with the AML/CTF Rules 2025, these provisions may affect an individual’s ability to work in certain regulated roles.
3.    However, the Amendment Rules do not introduce new categories of exclusion. Decisions remain subject to review and reconsideration mechanisms, and the measures operate as proportionate safeguards to ensure the integrity of high‑risk financial services. To the extent that the provisions of the Rules may reduce a person’s right to work, these limitations are reasonable, necessary and proportionate to address the risks of money laundering, financing of terrorism, proliferation financing and other serious financial crime.

Other rights

1.    Chapter 9 of the Class Exemption Amendment Rules introduces exemptions for community legal centres, legal aid commissions and duty lawyers. Article 14 of the ICCPR protects the right to a fair hearing and equality before courts and tribunals. By supporting the continued provision of timely and accessible legal assistance to unrepresented and disadvantaged individuals, this Chapter aims to reduce practical barriers to accessing legal assistance in circumstances where such assistance is integral to the effective exercise of this right. To the extent that Article 14 is engaged, the exemptions have a positive effect by facilitating access to justice and promoting equality before courts and tribunals.
2.    The Amendment Rules do not introduce new information-sharing mechanisms with foreign governments or agencies and do not otherwise expand provisions that engage the right to life or the prohibition on torture or cruel, inhuman or degrading treatment or punishment. Existing safeguards described in the Statement of Compatibility with Human Rights for the AML/CTF Rules 2025 continue to apply.

Conclusion

1.    The Instruments engage a number of human rights and, to the extent the Instruments limit some rights, those limitations would be reasonable, necessary and proportionate, and facilitate the overarching legitimate objectives of the AML/CTF regime. To the extent the Rules engage with other rights, there are safeguards in place to avoid those rights being limited. The Amendment Rules refine and clarify the operation of the AML/CTF Rules 2025 and do not introduce new or additional human rights impacts beyond those previously assessed.