• Industry bodies raised concerns about the cost and complexity of financial crime reforms

• The Australian Institute of Criminology estimated the cost of serious and organised crime in Australia at $35.5–$82.3 billion

Australia’s newly implemented anti-money laundering reforms have attracted criticism but a Charles Sturt University expert says the changes address a long-standing gap in the nation’s defences against financial crime.

The Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024 extended anti-money laundering and counter-terrorism financing (AML/CTF) obligations to designated services. 

These are commonly provided by real estate, legal, conveyancing, accounting, trust and company services, and precious metals and stones businesses.

Businesses that provide these designated services must meet requirements for customer due diligence, assessing money laundering and terrorism financing risks, keeping records, training relevant staff, reporting suspicious matters to the Australian Transaction Reports and Analysis Centre (AUSTRAC), and maintaining an AML/CTF program.

The new obligations, known as Tranche 2, commenced on 1 July for newly regulated services. 

The Australian Institute of Criminology estimated the cost of serious and organised crime in Australia at $35.5–$82.3 billion in 2023–24. Money laundering enables criminal networks to conceal and transfer illicit proceeds.

Charles Sturt University financial crime expert Dr Milind Tiwari (inset) said the reforms recognise that money laundering occurs across a range of sectors.

“Money laundering can involve property, companies, trusts and professional expertise, as well as bank accounts. Tranche 2 seeks to address that,” Dr Tiwari said.

AUSTRAC reported more than 40,000 enrolment submissions as of 25 August. It said it was targeting sectors where enrolment was below expectations. These submissions should not be treated as a direct measure of compliance or reform effectiveness.

During the reforms’ development, the Real Estate Institute of Queensland raised concerns about cost and implementation, while the Law Council of Australia highlighted the complexity of the draft rules.

Dr Tiwari said there was a clear need to address financial crime risks.

“Australia needs to close the gaps that criminals exploit through property transactions, shell companies and professional services, while keeping compliance proportionate to risk,” he said.

“Banks cannot address every stage of the money laundering process on their own. Criminal proceeds can be hidden through property, companies, trusts and professionally facilitated transactions. These reforms are intended to make it harder for criminals to exploit gaps between sectors.” 

For customers, this may mean providing additional information, depending on the service being provided and the assessed risk.

“These checks are intended to make it harder for criminals to hide behind otherwise legitimate services,” Dr Tiwari said.

“A request for information does not necessarily mean a customer is suspected of wrongdoing. The purpose is to better understand risk and protect the integrity of the financial system.”