⚡ Direct Answer: From 1 July 2026, Australian accounting firms and accountants providing certain designated services will be required to comply with AML/CTF obligations under the reformed AML/CTF Act. This includes enrolling with AUSTRAC by 29 July 2026, developing an AML/CTF program, conducting customer due diligence, and submitting required reports. The reforms represent the most significant change to the accounting profession’s compliance obligations in decades.
Why Are Accountants Being Regulated Under AML Laws?
Australia’s decision to bring accountants within the AML/CTF regime is driven by two key factors: FATF compliance and the recognition that professional service providers can serve as “gatekeepers” to the financial system, enabling money laundering even if they are not directly involved in criminal activity.
International experience — particularly in Europe and the UK, where accountants have been regulated for AML purposes for many years — has shown that financial criminals seek out unregulated professionals to help them move and conceal illicit funds. Australia’s reforms bring the country into line with international best practice and address a long-standing gap in the regulatory framework.
Which Accounting Services Are Designated from 1 July 2026?
Not all accounting services become designated. The reforms focus on services that involve the accountant acting as a gatekeeper — controlling or facilitating access to the financial system or the movement of value on behalf of a client. The following services are expected to be designated:
- Buying and selling real estate on behalf of a client
- Managing client money, securities, or other assets
- Opening or managing bank, savings, or securities accounts on behalf of a client
- Organising contributions for the creation, operation, or management of companies
- Creating, operating, or managing trusts or similar structures on behalf of a client
- Acting as or arranging for a person to act as a nominee director, nominee shareholder, or company secretary
Services that are not expected to be directly captured include standard tax compliance, audit, and advisory work that does not involve managing client funds or financial structures.
What Does “Providing a Designated Service” Mean for Accountants?
The test is whether the accountant is actually providing the service — not just advising about it. For example:
- Advising a client about how to structure a trust: probably not designated
- Acting as trustee of a client’s trust: likely designated
- Preparing tax returns for a company: probably not designated
- Acting as company secretary for client entities: likely designated
- Providing general business advice: probably not designated
- Managing a client’s investment portfolio: likely designated
The precise scope of the new designated services will depend on the final legislative instrument. Accountants should seek specific advice about their firm’s services before 1 July 2026.
AML Obligations That Will Apply to Accountants
Accounting firms and individual accountants providing designated services from 1 July 2026 will need to:
- Enrol with AUSTRAC: Apply within 28 days of commencing a designated service (or by 29 July 2026 for existing operations).
- Conduct an ML/TF Risk Assessment: Identify the specific money laundering risks associated with the firm’s client base, services, and geographies.
- Develop an AML/CTF Program: Create written policies and procedures approved by a senior partner, covering CDD, reporting, monitoring, training, and record keeping.
- Conduct Customer Due Diligence (CDD): Verify the identity of clients before providing designated services. Identify beneficial owners of corporate and trust clients.
- Screen for PEPs and Sanctions: Check clients against PEP databases and targeted financial sanctions lists.
- Monitor Ongoing Client Activity: Implement processes to detect activity that is inconsistent with what is known about the client.
- Submit Suspicious Matter Reports (SMRs): Report to AUSTRAC when suspicious activity is identified.
- Maintain Records: Keep CDD, transaction, and program records for at least 7 years.
- Train Staff: Ensure all relevant team members understand AML/CTF obligations.
- Conduct Independent Program Reviews: Periodically evaluate the effectiveness of the program.
Preparing Your Accounting Firm Before 1 July 2026
The 2026 reforms give accounting firms a clear window to prepare. AUSTRAC expects firms to have compliant systems and procedures from day one — not to scramble to catch up. Here is a recommended preparation timeline:
- Now to 3 months before: Assess your services. Determine which (if any) will be designated from 1 July 2026. Identify the scope of your AML/CTF obligations.
- 3 months before: Conduct your ML/TF risk assessment. This is the foundation of your program and takes time to do well.
- 2 months before: Develop your AML/CTF program. Write your policies, procedures, and controls based on your risk assessment.
- 1 month before: Train your team. Ensure all relevant partners and staff understand the new obligations and internal procedures.
- 1 July 2026: Go live. Your program must be in place and operational from this date.
- By 29 July 2026: Submit your AUSTRAC enrolment application.
Risk Indicators for Accounting Clients
Under the new framework, accountants will need to assess and respond to AML/CTF risk indicators in their client relationships. Key red flags to be aware of include:
- Clients who are secretive about the source of funds or the ultimate beneficial owner of entities
- Complex ownership structures with no apparent commercial rationale
- Clients who frequently change the structure of entities or assets without clear business purpose
- Clients who are listed in public domain as associated with financial crime or law enforcement matters
- Transactions involving unusually large sums or high-risk jurisdictions
- Clients who resist providing identity documents or beneficial ownership information
- Clients in industries associated with higher ML/TF risk (gambling, cash-intensive businesses, digital assets)
Frequently Asked Questions
-
Will my professional indemnity insurance cover AML/CTF compliance failures?
Professional indemnity insurance typically covers claims from clients arising from professional negligence — not regulatory penalties imposed by AUSTRAC for non-compliance. You should review your insurance coverage with your broker and consider whether dedicated compliance insurance is appropriate.
-
What if an existing client won’t provide the information I need for CDD?
If a client refuses to provide CDD information, you may be unable to continue providing the designated service. You should also consider whether the refusal gives rise to an SMR obligation. Documenting your requests and the client’s responses is essential.
-
Do accounting professional associations provide AML guidance?
Yes — CPA Australia, Chartered Accountants ANZ, and the Institute of Public Accountants are working with AUSTRAC and their members on guidance for the 2026 reforms. Check with your professional association for the latest guidance and training resources.
-
Will there be a grace period for accountants after 1 July 2026?
The Act does not provide a formal grace period. The expectation is that newly regulated firms will have their compliance frameworks in place from 1 July 2026, with enrolment completed by 29 July 2026.
📣 Need expert AML/CTF support?
👉 Get AML/CTF compliance support for your accounting firm: contact us
👉 Check whether your services are captured: Do I need AML?
- 👉 Read the full guide on AML for accountants: Do Accountants Need AML Compliance in Australia?
👉 Read more: