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2024 regulatory enforcement trends and what they mean for the year ahead
2024 regulatory enforcement trends and what they mean for the year ahead

Anti-money laundering

Key regulatory and enforcement developments in Australia in 2024

The most notable development in AML/CTF regulation in 2024 was the passing of the Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2024 (Amendment Bill). The Amendment Bill introduces a number of significant reforms to Australia's AML/CTF regime, including:

  • expanding the scope of entities subject to the AML/CTF regime (including real estate agents, lawyers and accountants);
  • changing, reframing or clarifying the requirements for AML/CTF programs, customer due diligence and reporting;
  • simplifying and modernising the framework regarding electronic funds transfer instructions, designated remittance arrangements and international funds transfer instructions;
  • extending the AML/CTF regime to additional virtual asset-related services, and amending or introducing relevant definitions;
  • amending the current prohibition against reporting entities ‘tipping off’ their customer about the formation of a suspicion;
  • introducing new information-gathering powers for AUSTRAC, including an examination power; and
  • clarifying the treatment of information subject to legal professional privilege for the purposes of the reporting and information disclosure obligations in the AML/CTF Act.

There have also been a number of AML/CTF enforcement developments, including:

  • SkyCity being ordered to pay $67 million in penalties for its breaches of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) (AML/CTF Act);
  • AUSTRAC issuing 19 infringement notices to reporting entities that did not comply with the obligation to file an annual compliance report; and
  • continued enforcement activity in the online wagering sector.

What are the likely regulatory and enforcement developments in Australia in 2025?

We are expecting a number of significant developments in 2025 in relation to AML/CTF regulation and enforcement. In particular:

  • AUSTRAC has proposed at least two rounds of consultation on the new AML/CTF Rules, which will support the reforms in the Amendment Bill. The outcomes of this consultation will be particularly important for existing and new reporting entities, who will be seeking to prepare for the commencement of most of the reforms in 2026.
  • Some of the reforms in the Amendment Bill will commence in 2025. In particular, AUSTRAC's new information-gathering powers, including an examination power, will commence effective 7 January 2025. We expect that AUSTRAC will use these information-gathering powers in new and ongoing investigations. In addition, the amendments to the tipping-off prohibition will commence on 31 March 2025.
  • In relation to enforcement:
    • we anticipate that AUSTRAC will take further enforcement action, particularly against reporting entities in the gaming and wagering sector;
    • we anticipate that AUSTRAC will continue to use infringement notices as an enforcement tool in relation to specific non-compliance with the AML/CTF laws; and
    • we have not yet seen individuals joined in proceedings against reporting entities or even subject to investigations, although it is possible that we might see this in 2025.
  • We anticipate that AUSTRAC will continue to issue resources and guidance to support reporting entities while implementing the new reforms.

Who are the key regulators in relation to this area?

The key regulator in this area is AUSTRAC, and in respect of gaming, the state casino and gaming regulators.

AUSTRAC cooperates closely with ASIC, which will often investigate potential breaches of directors' and officers' duties where a major failure in AML/CTF risk management has occurred, as well as APRA, for entities captured by prudential regulation.

What are the key sectors of focus?

The banking, gambling and remittance sectors continue to be ongoing focus areas for AUSTRAC's regulatory work.

We anticipate that AUSTRAC will increase its regulatory activities in relation to digital currency exchanges, payment platforms, bullion and non-bank lenders and financiers.

The Amendment Bill reforms will also extend AUSTRAC's focus to gatekeeper professions, such as lawyers, accountants and real estate agents.