AML Austrac - Will it apply to you?
Determining if you provide a Designated AML Services will determine if you are captured by AML or not.
This article explores how you can determine if AML will apply to your business. It looks at the new AML designated services, and which ones are most likely to impact the accounting sector.
Will you provide (AML) designated services?
AUSTRAC’s website supplies the following definitions of designated services:
The Act has introduced new designated services (table 6 of subsection 6(5B)). If your business provides one or more designated services that have a geographical link to Australia, you have AML/CTF obligations:
assisting in the planning or execution of a transaction to sell, buy or transfer real estate (item 1)
assisting in the planning or execution of a transaction to sell, buy or transfer a body corporate or legal arrangement (item 2)
receiving, holding, controlling or managing a person’s property to help in the planning or execution of a transaction (item 3)
assisting in organising, planning, or executing a transaction for equity or debt financing relating to a body corporate or legal arrangement (item 4)
selling or transferring a shelf company (item 5)
assisting in the planning or execution of the creation or restructuring a body corporate or legal arrangement (item 6)
acting, or arranging for someone to act on behalf of a person in particular positions in a body corporate or legal arrangement (items 7–8)
providing a registered office address or principal place of business address of a body corporate or legal arrangement (item 9).
In our experience the two main designated services that will impact the accounting sector are Item 3, and Item 9. We explore these a little more below:
Receiving, holding, controlling or managing a person’s property (Item 3)
AUSTRAC describes this service like this:
We consider that a professional will receive, hold and control, or manage a person’s money or property if it passes through their accounts (including a trust account) or if they otherwise deal with the money or property on direction or instruction from the client in a transaction.
This may include activities such as where a professional service provider does any of the following:
manages sale proceeds or purchase funds for a customer on escrow (sometimes referred to as ‘transit money’)
manages money or property prior to it being settled as trust property on the creation of an express trust
has authority over a customer’s bank account and makes payments from that account on behalf of a customer. For example, to make loan repayments to a financial institution relating to a transaction
helps create legal arrangements to disburse client funds to help purchase an asset on their behalf.
The designated service isn’t limited to transactions relating to real estate, bodies corporate or legal arrangements.
Are you moving money? Is it ancillary?
In New Zealand the general principal is to consider “are you moving money?” In NZ we would consider if there is an action you take, or a button you push, or an approval you make that results in money or valuable assets moving - you are generally considered to be a reporting entity under AML. While both NZ and Australian AML/CTF requirements ultimately come from the Financial Action Task Force (FATF). Each country can determine how to interpret it. Therefore, it is worth noting that the Australian ICB are seeking formal clarification over this designated service. They have asked if making types of payments that bookkeepers, BAS and Tax agents often do, is just “ancillary’. That it is only in for AML, if a transaction is related to another designated services (i.e. real estate, debt services, or shelf companies etc.). They are seeking to confirm if Bookkeepers will be out of the scope of AML CTF and if so, what conditions will apply. A formal decision on this may take some time.
Do you provide clients an address (item 9)
This is straight forward. AUSTRAC describe it as follows:
This designated service regulates persons who provide addresses that customers may use and notify to ASIC in absence of a true office address. A company may wish to conceal their address for privacy or commercial reasons, or if the company doesn’t have a physical presence in Australia. It also applies to providing equivalent addresses outside Australia. It doesn’t matter whether this service is provided free of charge or not. The customer of the designated service is the person who is being provided with the address or principal place of business.
Decide your approachto AML CTF
So, what does this mean for your practice? Firstly, you need to determine if under AML CTF you are either:
Definitely are NOT a reporting entity or will CHANGE services so you are not reporting entity.
Definitely ARE a reporting entity.
If you are NOT a reporting entity
If you are not managing client funds, providing an address or any other designated services to clients it means that you are not an AML CTF reporting entity. You may wish to record the rational for this conclusion in your practices operating guidance or QMS (Quality Manage System) or company policies.
Willing to CHANGE so you will not be a reporting entity
If you offer designated services, you can stop providing these from 1 July 2026. If for example you only have one customer who you provide a registered office for, then maybe now is the time to let them know you can no longer do this for them, or you might need to consider off-boarding a client. If you have provided designated services in the past but stop and do not provide them after 1 July 2026 - you are not an AML reporting entity.
If you ARE a reporting entity
If you offer and want to continue to manage client funds, provide an office address (or any other designated services), then from 1 July 2026 you will be a reporting entity. If this is you, you register with AUISTRAC. Make sure you are registered for 2Shakes updates. As we will be sending out some great resources to help you to do your risk assessment and AML Program. You should also register for AUSTRAC free webinars - book online for these here.
Can you charge for AML with an admin fee?
Yes! This is actually pretty common practice. But ultimately like all costs you incur, it is a business decision to absorb or pass on costs. Since AML/CTF tranche 2 came into effect in New Zealand, adding an AML admin fee to cover costs if common practice here. Especially for lawyers and accounting practices.
AML is a lot - can I do everything I need to?
Yes! 2Shakes is used by all sizes of practices in NZ for AML and as part of that we have supported a lot of very small practices too. In particular it has worked with small part time sole trader bookkeepers in NZ. One of these, who was a 2Shakes customers talked at the ICBNZ conference after AML came in about their experience. They had just been audited by DIA (which is the NZ equivalent of AUSTRAC). DIA gave them outstanding feedback. They did this, and you can do! AML/0CTF is fundamentally compliance, and Accountants, Tax Agents, BAS Agents and Bookkeepers are great at compliance. There is work to do, you will need to learn some new things. But at the end of the day, you will be improving your onboarding processes and keeping Australian safer at the same time!
Subscribe - and we can work through it together
Over the next few months 2Shakes will provide weekly updates to help you prepare for AML/CTF. Subscribe to get sent our blogs as soon as they are published. Each week we’ll explain something to need to understand, provide some resources and guide you so that you know what you need to do. Before you know it you will be all ready to go!
We will cover things like:
What is an AML program? (with a free AML Program on a page resource).
Guide to setting up your Risk assessment (with free example template)
Guide on setting AML Policy (with free example template)
Setting up your onboarding to include AML/ CTF (free explainer video)
CDD part 1: Risk assessment, CDD level, Beneficial Owners (free reference materials)
CDD part 2: How you can verify identity and understanding what a PEP check is
CDD part 3: What enhanced CDD means, what happens if a PEP hits happens, what to do if risk is high. How to collect proof of funds or evidence of the source of a clients wealth.
AML/CTF Staff training
AML/CTF Reporting