The New AML/CTF Gatekeepers’ Traversal Into 2026: An Overview Of The Three Institutions

Written By: Craig Reynolds

Previously, practitioners acting in banking and finance transactions did not have any disclosure obligations to the Australian Transaction Reports and Analysis Centre (AUSTRAC). However, post 1 July 2026, these obligations will change.

This is a result of the recent changes to Australia’s anti-money laundering and counter terrorism financing (AML/CTF) regime which represents a significant step towards ensuring Australia is keeping up with and complying with the international standards to combat money laundering and terrorism financing.[1]

The most significant change to the AML/CTF regime in Australia was the introduction of disclosure obligations for professionals such as lawyers, conveyancers, real estate agents, accountants, dealers in precious or high value items and trust and company service providers, otherwise known as the “Tranche 2” entities.

On 29 August 2025 the CEO of ASTRAC tabled the Anti-Money Laundering and Counter-Terrorism Financing Rules 2025 (Cth) (2025 Rules) providing the new rules Tranche 2 entities will be required to comply with.[2]

The tabling of the 2025 Rules provides the Tranche 2 entities with clarity as to their disclosure obligations to AUSTRAC under the new AML/CTF regime,[3] that they previously did not have.

The 2025 Rules now provide banking and finance lawyers with the opportunity to prepare for the changes to ensure compliance with the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) (AML/CTF Act).

A more detailed overview of what a Tranche 2 entity is and what the AML/CTF changes entail can be found via previously published JHK Legal article “Changes to the Anti-Money Laundering and Counter-Terrorism Financing Regime: What Do You Need to Know?”.[4] This article will focus on the specific disclosure obligations the AML/CTF changes entail.

Expanding what services require disclosure

Prior to the changes to the AML/CTF Act the services that required disclosure were transactional in nature and focused on the direct participants of that service, such as banks, credit unions, bullion dealers, casinos, etc.[5] The professional services that enable the provision of a service, such as lawyers, were not captured by the AML/CTF Act.

The Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024 (Cth) (Amendment Act) changes this and adds various professionals that, come 1 July 2026, will be required to make disclosures to AUSTRAC.[6]

For the purposes of this article, it seems that the service that most practitioners within the banking and finance space will fall under is Table 6 Item 3 – which provides that if a professional receives or holds money as part of completing a transaction then it is likely to be deemed a service that requires disclosure to AUSTRAC.[7]

For completeness it should be noted that before engaging in a designated service a practitioner must complete relevant due diligence procedures as outlined at Part 6 of the 2025 Rules. These due diligence requirements are extensive but are grounded in common sense and best practice. Accordingly, it would not be fanciful to think that diligent practitioners have not already undertaken these steps, as such, this article will not outline these steps.

Information to be disclosed under the 2025 Rules

What information is to be provided to AUSTRAC pursuant to the 2025 Rules changes based on the type of the service being provided and what type of institution the Tranche 2 entity is in the transfer of value scheme.

The types of institutions are an ordering institution, beneficiary institution and intermediary institution (together “Institutions”).[8]

The scope and variety of banking and finance practice and the changes to the AML/CTF regime are vast and banking and finance practitioners are likely to be captured by all of the Institutions.

Defining the Institutions

It would come as no surprise that the changes to the AML/CTF regime have resulted in the definition of the Institutions being created or expanded.[9]

Prior to the 2025 Rules and the Amendment Act,[10] the AML/CTF Act:

• Restricted the definition of an ordering institution and beneficiary institution to an authorised deposit‑taking institution, bank, credit union, building society or an entity specified in rules published by the CEO of ASTRAC (AML/CTF Rules)[11] – currently the 2025 Rules.
• Did not define an intermediary institution.

The changes in the Amendment Act now:

• Designates that an ordering institution and beneficiary institution are to be defined in accordance with the AML/CTF Rules; and[12]
• Defines what an intermediary institution is and otherwise allows for the definition to be in accordance with the AML/CTF Rules.[13]

The new definitions pursuant afforded by the new AML/CTF regime provides that an entity is:

• An ordering institution if:
  • It accepts an instruction for a transfer of value[14]; and
  • It does so in its normal course of business.[15]
• An intermediary institution if:
  • It receives and passes on a transfer message[16] for a transfer of value in a value transfer chain[17]; and
  • It does so in its normal course of business.[18]
• A beneficiary Institution if:
  • It makes the transfer of value available to the payee; and
  • It does so in its normal course of business.^[19]

In addition to the above expanded definitions for ordering institutions and beneficiary institutions, the 2025 Rules also provide examples where an entity would be deemed to be these institutions, but without limiting the definitions.[20]

Disclosure obligations of each of the Institutions

The 2025 Rules provides what information needs to be collected, verified and/or retained and what information needs to be disclosed to AUSTRAC when providing a designated service, the type of information required depends on the circumstances transfer of value scheme. ^[21]

For example, if a practitioner received instructions from their client to distribute funds paid into their trust account into a borrower’s account via electronic funds transfer to a domestic account – under the new AML/CTF regime the practitioner would be encapsulated by all three Institutions and as a result would be required to:

• Collect and verify the payer information
• the payee’s full name.
• Collect the payee’s full name.
• Disclose to AUSTRAC tracing information for the transfer of value.^[22]

Part 8 Division 2 of the 2025 Rules provides informative tables which outlines what is required to be disclosed in various transactions. These tables are extensive and clearly are taking all reasonable steps to ensure that all transfers of value / transactions both domestic and international are canvased.

Indeed, it should come as no surprise that the rabbit hole as to what information is required to be collected does not end at these tables – if we use the above example, further, albeit necessary, clarity is provided Rule 1-4 of the 2025 Rules, including what a payer information and tracing information is, these definitions being:

• Payer information – means the entities full name and any one or more of the following:
  • Unique customer identification number given by the ordering institution[23];
  • Unique identifier for the payer[24];
  • If an individual – the date, residential address and place of birth of the payer; and/or
  • If a company, sole trader or business – the full business address.

Note – the address must not be a PO Box.

• Tracing information – this definition is extensive however, it can be reasonably be condensed to all information utilised by the payer to complete the transaction

Onward to July 2026

It would be disingenuous to say that the new AML/CTF regime does not at first blush appear overwhelming and have the feeling that such steps are likely to result in additional costs to practitioners and by extension their clients.

However, upon review, this regime is simply codifying what would already be considered best practice for banking and finance transaction with the addition of some disclosures being required to be made to AUSTRAC to ensure compliance.

Looking at these changes in this light, one could see these as an opportunity to ensure that you are adhering to best practice procedures for banking and finance transactions to ensure crimes such as money laundering and/or terrorism are not perpetuated.

The clock is ticking as to these changes coming into effect. It seems more pragmatic for practitioners to take it as an opportunity to update and review their current procedures to avoid contravening the new regime especially if they are not already engaging in best practice when it comes to banking and finance transactions.  

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[1] Commonwealth, Parliamentary Debates, House of Representatives, 11 September 2024, 6467 (Mark Dreyfus, Attorney-General) (‘Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2024’).

[2] The power conferred by the CEO of AUSTRAC to make these rules is detailed in the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) s 229.

[3] Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024 (Cth) Sch 8 Pt 4 s 11(1)

[4] Sarah Jones, ‘Changes to Anti-Money Laundering and Counter Terrorism Financing Regime – What do you Need to Know?’, JHK Legal Australia Pty Ltd (Article, 28 April 2025) https://www.jhklegal.com.au/changes-to-anti-money-laundering-and-counter-terrorism-financing-regime-what-do-you-need-to-know/.

[5] Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) s 6

[6] Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024 (Cth) Sch 3 Pt 3 s10 and Sch 3 Pt 4 s 11

[7] Ibid Sch 3 Pt 3 s10

[8] Ibid Div 2 and Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024 (Cth) Sch 8 Pt 1 s 63A

[9] Anti-Money Laundering and Counter-Terrorism Financing Rules 2025 (Cth) r 8-1 and 8-2.

[10] Ibid and Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024 (Cth) Sch 8 Pt 1 s 63A (1)

[11] Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) s 8 (1) (c) ), s 9 (1) (d) and s 229

[12] Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024 (Cth) Sch 8 Pt 1 s 63A (1) and (5)

[13] Ibid 63A (9)

[14] A transfer of value relates to the transfer of money, virtual assets or property – but does not include physical money or tangible property or as otherwise specified in the 2025 Rules or such other rules published by the CEO of AUSTRAC – see Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024 (Cth) Sch 8 Pt 1 s 14

[15] Anti-Money Laundering and Counter-Terrorism Financing Rules 2025 (Cth) r 8-1 (2)

[16] A transfer message is effectively the information that the payer has provided for the transfer of value to be made – see Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024 (Cth) Sch 8 Pt 1 s 14

[17]  A value transfer chain is each of the Institutions where applicable in a transaction – see Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024 (Cth) Sch 8 Pt 1 s 63A (11)

[18] Ibid Sch 8 Pt 1 s 63A (9)

[19] Anti-Money Laundering and Counter-Terrorism Financing Rules 2025 (Cth) r 8-2 (2)

[20] Ibid r 8-1 (3) and r 8-2 (3)

[21] Ibid r 8-3, r 8-4 and 8-5

[22] Ibid r 8-3 item 2, 8-4 item 2 and 8-5 item 2

[23] As noted above, when completing a designated service, various due diligence procedures are to be undertaken, this includes a verification of identity. Accordingly, an ordering institution acting for the payee ought only to have this unique number if it has completed its due diligence including completing a verification of identity.

[24] This is a number other than a tax file number provided by an Australian government body (excluding a tax file number) or other foreign countries or other approved societies or foundations – Anti-Money Laundering and Counter-Terrorism Financing Rules 2025 (Cth) r 1-4