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Their involvement – along with business leaders and the AML/CTF compliance officer – ensures effective ML/TF risk management, ongoing AML/CTF compliance, the successful definition and embedding of an organisation's AML/CTF compliance culture.
The reformed AML/CTF Act 2024 introduces specific governance requirements for the governing body, the concept of a responsible officer, and sets out the role and responsibilities of the AML/CTF compliance officer. The Act emphasises a more detailed and proactive approach, mandating explicit risk-based assessments, regular reviews, and a stronger focus on resource allocation and training.
In other words, the reforms shift governance from a “tick-the-box” approach to an outcomes-based, risk-responsive model, requiring Boards and senior managers to demonstrate proactive oversight and accountability.
These governance requirements apply to both:
Governance plays a crucial role in relation to AML/CTF, as both the Board and business leaders are responsible for setting the organisational tone and ensuring adequate resources such as personnel, technology, and financial investment are allocated to AML/CTF compliance.
The governing body must ensure the ML/TF risks associated with the organisation’s operations, products, services, and customer base are understood, and that the AML/CTF program aligns with the AML/CTF Act obligations and AML/CTF Rule requirements, addressing the specific ML/TF risks the organisation faces.
We have identified the following key actions for Boards and business leaders on AML/CTF reform readiness:
For entities in a reporting group, governance must clarify the role of the lead entity, ensuring it has capacity to set AML/CTF policy outcomes across the group.
Although AML/CTF requirements for new entrants won't be enforced until 2026, it is vital for both pre-existing entities and new reporting entrants to start planning and preparing for compliance with AML/CTF requirements now. With a short lead time to compliance and limited AML/CTF experts across Australia, demand will only continue to increase as the compliance date approaches. Reach out to our team of leading specialists to help with your requirements.
Australia’s Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) regime continues to experience change.
The AUSTRAC AML/CTF Starter Programs provide a structured pathway to achieving AML/CTF compliance that will significantly reduce the effort and cost of AML/CTF compliance for entities required to meet AML/CTF obligations under Tranche 2.
As Australia prepares for the landmark Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) reforms – set to take effect in the coming months – businesses across sectors face a pivotal moment not just to comply with how to manage financial crime risk, but to transform themselves for the better. The real challenge lies in building a culture that embeds AML obligations into the DNA of an organisation.
