AUSTRAC has begun issuing Section 167 notices to businesses in newly regulated sectors that may be providing designated services without enrolling under Australia’s AML/CTF regime, signalling a shift from education to active regulatory oversight.
A Section 167 notice is a formal request for information that helps AUSTRAC determine whether a business is subject to AML/CTF obligations and meeting its compliance requirements.
Businesses that receive a notice should treat it as a priority, assess their regulatory obligations urgently, and ensure they provide a complete and accurate response to minimise potential enforcement action.
On 28 August 2026, AUSTRAC began issuing section 167 notices to businesses that appear to be providing designated services but have not enrolled under Australia's AML/CTF regime.
The notices are directed at businesses in newly regulated sectors, including real estate agencies, legal practices, accounting firms, jewellers, conveyancers, and trust and company service providers.
For many businesses that became subject to Australia's AML/CTF regime on 1 July 2026, this represents the first significant indication that AUSTRAC has moved from education and implementation support into active regulatory supervision and possibly enforcement.
What is a Section 167 Notice?
Section 167 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) gives AUSTRAC broad powers to require a person or business to provide information, documents and records relevant to the administration and enforcement of the AML/CTF Act.
In practice, a Section 167 notice is a formal compulsory information-gathering notice. It is commonly used by AUSTRAC to:
determine whether a business is providing a designated service
assess whether a business has complied with its AML/CTF obligations
gather information to support supervisory activities, investigations or enforcement action
understand the nature, scale and risks associated with a business's activities.
A Section 167 notice is not a finding that a business has contravened the AML/CTF Act. It does, however, place the matter within a formal regulatory process and can expose wider gaps in enrolment, governance, customer due diligence, reporting and record keeping.
Failure to comply with a Section 167 notice, or providing incomplete or misleading information, can expose a business to significant regulatory consequences.
Regulatory consequences may include compulsory enrolment action, further supervisory or investigative activity by AUSTRAC, infringement notices, enforceable undertakings, civil penalty proceedings and ongoing scrutiny of the business's AML/CTF compliance arrangements.
What do the newly issued Section 167 notices cover?
According to AUSTRAC, the current notices are being issued to businesses that appear to be providing designated services but have not enrolled with AUSTRAC as reporting entities. The notices require businesses to provide information that will help AUSTRAC determine whether:
the business is providing designated services regulated under the AML/CTF Act
the business should have enrolled with AUSTRAC
relevant AML/CTF obligations are being met.
The announcement specifically identifies the below sectors as receiving notices:
real estate agents
lawyers and legal practices
accountants and accounting firms
jewellers and dealers in precious metals and stones
The notices are likely to focus on understanding the nature of services provided by the recipient and determining whether those services fall within the scope of the new designated services introduced under the Tranche 2 reforms.
Why is AUSTRAC taking this action?
The AML/CTF regime expanded on 1 July 2026 to cover tens of thousands of businesses in the real estate, legal, accounting, conveyancing, trust and company services, and precious metals and stones sectors.
AUSTRAC CEO Brendan Thomas has consistently reiterated that enrolment is a legal requirement and remains a key regulatory focus. AUSTRAC has emphasised that businesses providing designated services should already have determined whether they are regulated, enrolled with AUSTRAC, commenced managing their money laundering and terrorism financing risks and begun implementing AML/CTF compliance arrangements.
AUSTRAC is now actively identifying businesses that may have failed to recognise their obligations or have not taken steps to comply since the commencement of the reforms.
What should businesses do if they receive a Section 167 notice?
Businesses should not ignore a section 167 notice. Upon receipt of a notice, businesses should:
A Section 167 notice is a compulsory information request. Deadlines should be identified immediately and responsibility assigned to appropriately senior personnel.
Review whether any services provided by the business fall within the designated services introduced under the Tranche 2 reforms. For legal, accounting and professional service firms, this may include services involving:
real estate transactions
trusts, companies and other legal arrangements
corporate restructures
equity or debt financing transactions
holding or controlling client assets.
For real estate businesses, consideration should be given to whether services provided fall within the relevant real estate designated services.
If designated services are being provided, businesses should determine:
whether they have enrolled with AUSTRAC
whether an AML/CTF Program has been developed
whether a ML/TF risk assessment has been completed
whether customer due diligence procedures have been implemented
whether governance arrangements, training and reporting processes are in place.
Responses should be carefully reviewed before submission to ensure:
information provided is accurate
relevant documents have been identified
the response clearly explains the services provided
any uncertainty regarding designated service status is appropriately addressed.
Where there is uncertainty regarding whether services constitute designated services, the extent of historical non-compliance, or how to respond to the notice, businesses should obtain legal and AML/CTF compliance advice.
AUSTRAC has made clear that it remains focused on helping businesses understand and comply with their obligations. Businesses making genuine efforts to comply should engage openly and proactively with the regulator. AUSTRAC has specifically stated that contacting them for assistance is not viewed as a red flag.
Key takeaway
The commencement of Section 167 notices marks an important transition in AUSTRAC's approach to the Tranche 2 reforms. After several years of consultation, guidance and industry engagement, AUSTRAC is now actively identifying businesses that may be providing designated services without being enrolled.
For real estate agencies, legal practices, accounting firms and other newly regulated businesses, receipt of a section 167 notice should be treated as a serious regulatory event. It is likely to be the first step in AUSTRAC determining whether the business is subject to the AML/CTF regime and whether enforcement action may be warranted. Businesses that have not yet confirmed their obligations, enrolled with AUSTRAC, or implemented AML/CTF controls should act urgently to assess their position and commence remediation.
We’re here to help
Grant Thornton's Financial Crime team has extensive experience assisting businesses in responding to AUSTRAC regulatory inquiries, section 167 notices, AML/CTF remediation projects and enrolment obligations.
We can assist with determining whether designated services are being provided, preparing responses to AUSTRAC, completing enrolment requirements, undertaking ML/TF risk assessments and implementing practical AML/CTF compliance frameworks.
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