AUSTRAC updates reporting requirements amid money laundering reforms

The changes form part of broader reforms aimed at strengthening Australia’s ability to detect and disrupt financial crime, while bringing a wider range of industries into the regulatory framework.

What’s changing from 1 July

AUSTRAC has announced it will introduce new threshold transaction report (TTR) and suspicious matter report (SMR) forms from 1 July 2026, updating both the type and quality of data it collects from regulated businesses.

The regulator said the changes are designed to:

• Improve the quality and consistency of reporting data
• Better identify suspicious activity and financial crime patterns
• Streamline the reporting experience through AUSTRAC Online

The updates coincide with a major expansion of the AML/CTF regime, which will see new industries required to report to AUSTRAC for the first time.

This expansion stems from the federal government’s AML/CTF reforms, which extend obligations to sectors such as:

• Real estate professionals
• Lawyers and conveyancers
• Accountants and other professional service providers
• Dealers in precious metals and stones

For these newly regulated businesses, reporting obligations will apply from day one, alongside requirements to enrol with AUSTRAC and begin reporting using the new forms.

Deadlines and transition periods

Businesses entering the regime must enrol with AUSTRAC by 29 July 2026, with access to training and preview reporting tools available ahead of time.

Existing reporting entities will have a longer transition window, with the ability to adopt the new reporting forms at any point between 1 July 2026 and 30 March 2029.

What the reforms mean in practice

Beyond the reporting changes, risk management is emerging as the central focus of the new AML/CTF framework.

Advisory firm KordaMentha notes that under the reforms, often referred to as “Tranche 2”, businesses will need to take a risk-based approach to compliance, rather than relying on standardised or generic processes.

At the core of this shift is the requirement for businesses to:

• Identify their exposure to money laundering, terrorism financing and proliferation financing risks
• Apply controls that are proportionate to those risks
• Continually assess and manage residual risk

This marks a significant change for many newly regulated sectors, where formal AML compliance obligations may be entirely new.

A stronger focus on risk and governance

Under the updated regime, businesses must develop tailored AML/CTF programs that reflect:

• The services they provide and how they could be misused
• The types of customers they work with
• The channels they operate through
• The jurisdictions they transact with

Regulators have made clear that risk assessments must be meaningful and defensible, with weak or generic approaches likely to attract scrutiny.

Importantly, while compliance officers may manage day-to-day requirements, ultimate accountability sits with senior leadership, reinforcing the need for governance oversight across the business.

Customer due diligence becomes critical

The reforms also place greater emphasis on understanding customers.

Businesses will be expected to:

• Conduct customer due diligence at onboarding
• Assign risk ratings to customers based on their profile and activities
• Apply enhanced due diligence in higher-risk scenarios

This includes gaining a clear understanding of ownership and control structures, particularly where transactions involve complex arrangements or third parties.

Acting early will be key

With reforms commencing from 1 July 2026, AUSTRAC has signalled that while it does not expect perfection on day one, it does expect businesses to demonstrate meaningful progress.

That includes:

• Enrolling with AUSTRAC on time
• Understanding whether their services fall within scope
• Beginning to build or update AML/CTF programs
• Training staff on their obligations

Businesses that fail to engage with the changes risk regulatory attention, as well as reputational impacts linked to financial crime exposure.

The bottom line

The upcoming changes represent a significant expansion of Australia’s AML/CTF regime in recent years, bringing thousands of new businesses into scope and lifting expectations on how risks are managed.

While the immediate focus for many will be on new reporting requirements, the broader shift means compliance is no longer just about meeting obligations but actively identifying and managing financial crime risk.

Businesses that take a proactive, risk-based approach now will be better placed to navigate the transition and minimise disruption as the new regime takes effect.

Read KordaMetha’s full advisory.