With new anti-money laundering and counter-terrorism financing (AML/CTF) reforms now coming into effect, both current reporting entities and newly regulated businesses must understand how the transitional and amendment rules will apply in practice.
The rules have been finalised and set out the timeframes and requirements to help businesses update their systems and processes, while continuing to manage money laundering and terrorism financing (ML/TF) risks.
One of the central elements of the reforms is the travel rule, which applies to businesses that transfer or receive money, virtual assets or property on behalf of their customers. Under this rule, affected businesses may be required to collect, verify and share specific information with other businesses involved in a transfer. The travel rule typically applies to financial institutions, remittance service providers and virtual asset service providers (VASPs).
AUSTRAC has worked with the Australian Department of Home Affairs to finalise the transitional rules supporting the rollout of the reforms. The stated aim is to give reporting entities practical time to update their systems and processes, while continuing to effectively manage their ML/TF risks.
On the question of initial customer due diligence (CDD), entities have been granted a three-year transition period — running from 31 March 2026 to 30 March 2029 — to move from the current applicable customer identification procedures (ACIP) to the new initial CDD framework.
This extended window is designed to allow businesses sufficient time to overhaul internal processes without disrupting their ongoing compliance obligations.
There are also near-term deadlines that entities must act on promptly. Reporting entities are required to notify AUSTRAC of any changes to their AML/CTF compliance officer by 30 May 2026. Separately, entities that have recently completed an independent review will be granted an extended timeframe for their first post-reform evaluation, providing some relief for businesses that have already invested in compliance assessments.
For businesses operating in the virtual asset space, obligations relating to new virtual asset services — including travel rule requirements — have been deferred until 1 July 2026, giving VASPs additional time to prepare for the expanded regulatory framework.
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