Overview
The goal of most criminal acts is to generate a profit. To enjoy their ill-gotten gains, criminals commonly seek to disguise the illegal source of those profits.
The Australian Institute of Criminology (AIC) estimates that serious and organised crime cost the Australian community up to A$60.1 billion in 2020—21, with illicit financing at the centre of most crime types. It directly impacts the safety and wellbeing of Australian communities, and exploits and distorts legitimate markets and economic activity.
Money laundering is the process of dealing in, disguising or concealing the origin of illicit funds to make it appear that the funds come from a legitimate source.
Terrorism financing refers to the means and methods that terrorist organisations use to finance activities that pose a threat to national and international security. The money that enables terrorist organisations to carry out terrorist activities can come from both legitimate and criminal sources.
Proliferation financing occurs when a person makes available an asset, provides a financial service, or conducts a financial transaction that is intended to, in whole or in part, facilitate the proliferation of weapons of mass destruction, regardless of whether the activity occurs or is attempted.
Research the AIC conducted, in collaboration with the Australian Transaction Reports and Analysis Centre (AUSTRAC), has found that criminal groups involved in money laundering are responsible for more than twice as much crime-related harm as groups not involved in money laundering. The research estimates that every year a criminal group is able to launder funds increases the crime-related harm they cause to the community by 49%.
Australia has a strong regime to fight money laundering and terrorism financing. Our department is responsible for the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act).
The AML/CTF Act currently regulates financial, gambling, remittance, digital currency exchange providers and bullion sectors that provide designated services listed in the AML/CTF Act.
AUSTRAC is Australia's AML/CTF regulator and financial intelligence unit.
Reforms to Australia’s anti-money laundering and counter-terrorism financing regime
The Australian Government is committed to protecting the integrity of the Australian financial system and improving Australia's AML/CTF regime to ensure it is fit-for-purpose, responds to the evolving threat environment, and meets international standards set by the Financial Action Task Force (FATF), the global financial crime watchdog and standard-setter.
The AML/CTF regime is a central part of Australia’s efforts to prevent criminals from enjoying the profits of their illegal activity and stopping funds from falling into the hands of terrorist organisations.
On 11 September 2024, the Attorney-General introduced the Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2024 into the Parliament. The Bill has 3 key objectives:
- Expand the AML/CTF regime to additional high-risk services provided by tranche two entities.
- Modernise the regulation of digital currency and of virtual asset and payments technology.
- Simplify and clarify the AML/CTF regime to increase flexibility, reduce regulatory impacts and support businesses to better prevent and detect financial crime.
The Bill and its explanatory materials are available on the Parliament of Australia website. For more information on the Bill, go to the AML/CTF Amendment Bill webpage.
Industry consultation
The Australian Government is working closely with industry on the reforms to the AML/CTF regime.
The Attorney-General's Department held a first round of consultation between 20 April 2023 and 16 June 2023. A second round of consultation was held between 2 May 2024 and 13 June 2024.
To read the consultation papers and stakeholder feedback for these consultation rounds, visit the Modernising Australia's anti-money laundering and counter-terrorism financing regime page.
Feedback from stakeholders over the 16 months of consultation informed government consideration of the reforms.
AUSTRAC will work closely with industry on upcoming amendments to the AML/CTF Rules. They will also collaborate with industry on fit-for-purpose, tailored industry education and guidance, particularly for new tranche two entities.
Australia's AML/CTF regime
The AML/CTF Act provides the means to help deter, detect and disrupt money laundering and terrorism financing. It also provides financial intelligence to revenue and law enforcement agencies.
The AML/CTF Act implements a risk-based approach to regulation, and sets out general principles and obligations. Details of how these obligations are to be carried out are set out in the Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (No. 1) (AML/CTF Rules).
Businesses must meet the minimum obligations set out in the AML/CTF Act and AML/CTF Rules. Beyond that, each business must assess the risks of potential money laundering or terrorism financing when providing a designated service to a customer.
Obligations for regulated businesses
The AML/CTF regime sets out a range of obligations to protect regulated entities that are at the front line in preventing serious financial crimes. These obligations build resilience against misuse by criminals within regulated sectors. Under the obligations, regulated entities must report certain transactions to government for use as financial intelligence to combat money laundering, terrorism financing and other serious financial crime. These reports are vital to understand and stop the flow of illicit funds in Australia.
The AML/CTF Act imposes 6 key obligations on regulated businesses:
-
Enrolment and registration with AUSTRAC: Regulated entities must enrol with AUSTRAC if they provide a designated service. In addition, remittance service providers and digital currency exchange providers must also register with AUSTRAC to permit additional checks to ensure that criminals and their associates are kept out of these sectors.
-
Developing and maintaining an AML/CTF Program: Regulated entities must identify the AML/TF risks they face in providing designated services to customers, and develop and maintain an AML/CTF program containing systems and controls to mitigate and manage those risks.
-
Conducting customer due diligence (CDD): Regulated entities must verify a customer’s identity before providing a designated service and understand the customer’s risk profile.
-
Conducting ongoing due diligence: Regulated entities must conduct ongoing CDD throughout the course of the business relationship, including transaction monitoring and enhanced CDD.
-
Reporting: Regulated entities must report to AUSTRAC all ‘suspicious matters’, cash transactions of A$10,000 or more, all instructions for the transfer of value sent into or out of Australia and annual compliance reports, and cross border movements of monetary instruments.
-
Record keeping: Regulated entities must make and retain certain records that can assist with the investigation of financial crime or that are relevant to their compliance with the AML/CTF regime for seven years, and ensure they are available to law enforcement, if required.
Reporting entities and Australian Government agencies who collect personal data are subject to the Privacy Act 1988 (Privacy Act). The Privacy Act covers the collection, use, disclosure, quality and security of personal information.
Visit the AUSTRAC website for more information
Key reviews of the regime
Statutory Review of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 and Associated Rules and Regulations
The Department of Home Affairs, in conjunction with AUSTRAC, undertook a statutory review of the AML/CTF Act, rules and regulations. This review was tabled in Parliament by the then Minister for Justice, the Hon Michael Keenan MP, on 29 April 2016. The Statutory Review made 84 recommendations to shape a modern AML/CTF regime that positions Australia to address current and future challenges.
Senate Inquiry into the adequacy and efficacy of Australia’s AML/CTF Regime
On 30 March 2022, the Legal and Constitutional Affairs References Committee handed down its report into the adequacy and efficacy of Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) regime. The government agreed to the recommendations on 20 April 2023.
The committee made 4 recommendations, that the government:
- accelerate industry consultation on expanding the regime to ‘tranche-two entities’
- consider the regulatory impact, technological innovation, and existing obligations
- consider the regime’s interaction with legal professional privilege
- pursue a beneficial ownership register.
Engagement
UK-Australia joint statement from the 2025 Illicit Finance Dialogue
The United Kingdom Home Office and Australian Department of Home Affairs have reaffirmed our shared commitment to tackling illicit finance by convening the third annual UK-Australia Illicit Finance Dialogue in London in October 2025. The event brought together senior officials from both countries’ policy, law enforcement and intelligence agencies to strengthen collaboration and exchange best practice in our efforts to combat illicit finance.
Illicit finance poses a global threat; undermining economies, weakening democratic institutions, and destabilising the rules-based international order. This dialogue forms part of our countries ongoing joint response to illicit finance agreed under the 2022 UK-Australia Declaration to Combat Illicit Finance.
Building on progress made across previous Dialogues, we shared our perspectives on the dynamic and evolving threats in our regions, where illicit financing continues to fuel organised crime and other illegal enterprises that destroy the lives and livelihoods of millions.
Strong national coordination is crucial to respond effectively to such pervasive risks. We discussed the identified benefits of a comprehensive illicit finance strategy, drawing on lessons from the UK’s Economic Crime Plan 2 in driving a coordinated response and measuring success. Both countries discussed governance structures, public–private partnerships, and mechanisms such as the UK’s Economic Crime Levy.
Discussions of strategic responses also extended to specific financial crime typologies including corruption and fraud. Australia shared lessons from the establishment of its National Anti-Corruption Commission, while the UK outlined its forthcoming Anti-Corruption Strategy. The UK presented its fraud response measures, including bank reimbursement obligations and digital safety tools. Discussions also covered crypto-related risks, including Australia’s recent announcement to ban crypto ATMs and the upcoming Illicit Finance Summit hosted by the UK.
In informing these strategic responses, we also examined recent operational activities, such as the recent UK and US joint action to disrupt a major online fraud network. The UK highlighted growing evidence of Russia-linked money laundering networks and shared insights from Operation DESTABILISE, with Australia sharing insights from Operation Avarus-Midas.
The UK noted that it has introduced designations on prolific criminals and expanded the Home Office exclusion guidance giving the Home Secretary the ability to exclude elites linked to the Russian state from entering the UK. High-profile sanctions packages have supported this, such as the largest sanctions package against Russia since 2022, earlier in 2025.
The two countries continued ongoing discussions on enhancing corporate transparency, including Australia’s recent announcement to move forward with the establishment of a public beneficial ownership register for unlisted companies.
Australia also shared further updates on the implementation of reforms to expand its Anti-Money Laundering and Counter-Terrorism Financing regime to additional high-risk services provided by gatekeeper professions. These reforms will bring Australia more in line with the international standards set by the Financial Action Task Force (FATF) in time for its upcoming mutual evaluation. Both countries exchanged information on preparations for FATF mutual evaluations and recognised the resource intensive nature of the process.
Australia and the United Kingdom have a longstanding partnership in addressing illicit finance and related challenges. Following this successful dialogue, both governments remain committed to deepening cooperation at both policy and operational levels to advance effective responses and disrupt illicit financial activity. We look forward to reconvening in 2026 to continue this important work.
Non-profit organisations
Non-profit organisations' financial operations are at risk of being misused by other individuals or organisations to finance or support terrorist activity. The consequences of becoming involved in terrorist financing are significant, and can include loss of reputation, status and donor confidence.
Non-profit organisations are traditionally cash-intensive and regularly transmit funds from supporters between jurisdictions. They often operate under less formal regulation, which exposes the sector to an elevated risk of criminal and terrorist abuse.
As a result of these risks, the Financial Action Task Force has included non-profit organisations in its recommendations to help combat money laundering and terrorism financing.
In consultation with non-profit organisations, the Australian Government has developed guidance material on safeguarding your organisation against terrorism financing. It is designed to:
- build awareness of the risk of being misused for the purpose of terrorism financing
- outline best practice principles which non-profit organisations can undertake to reduce this risk
- assist charities to understand and comply with legal requirements in relation to terrorism financing
The Australian Charities and Not-for-profits Commission (ACNC) has also developed a checklist to assist in protecting charities and non-profit organisations against the risk of terrorism financing.
Individuals or organisations, including non-profit organisations, may face criminal penalties if they provide financial support to terrorists, terrorist organisations or acts of terrorism. There are 2 lists maintained by the Australian Government in relation to terrorism financing that non-profit organisations should be aware of.
We maintain a list of terrorist organisations under Division 102 of the Criminal Code Act 1995, available on the Australian National Security website.
The Department of Foreign Affairs and Trade maintains a consolidated list of persons and entities which are subject to a targeted financial sanction imposed by a resolution of the United Nations Security Council. Penalties apply under the Charter of the United Nations Act 1945 for making resources available to a designated individual or organisation. View the consolidated list on the Department of Foreign Affairs and Trade website.
AUSTRAC
The Australian Transaction Reports and Analysis Centre (AUSTRAC) is Australia's anti-money laundering and counter-terrorism financing regulator and specialist financial intelligence unit.
AUSTRAC is responsible for:
- supervising compliance with the requirements of Australia's anti-money laundering regime
- collecting and analysing the financial intelligence obtained through the reporting obligations
- disseminating that intelligence for investigation to law enforcement, national security, revenue and regulatory agencies, as well as international counterparts.
Visit the
AUSTRAC website for more information.
Financial Action Task Force
The Financial Action Task Force (FATF) is an inter-governmental body that sets the international standards on anti-money laundering and counter-terrorism financing. Through the international standards, the FATF promotes effective implementation of legal, regulatory and operational measures to combat money laundering, terrorist financing and other threats to the integrity of the international financial system.
While the FATF found some improvements in a recent interim assessment of Australia’s AML/CTF regime, major deficiencies remain in Australia’s compliance with the FATF’s global standards. The proposed reforms outlined above are essential to address key deficiencies in regulation of designated non-financial businesses and professions, and digital currency exchange providers.
Our department leads Australia’s engagement with the FATF.
Visit the FATF website for more information.
Legislation
Contact details
For feedback or questions, email economiccrime@homeaffairs.gov.au.
