AML/CFT stands for Anti Money Laundering Counter Financing of Terrorism. It will come in for tranche 2 entities like Bookkeepers and Accountants from 1 July 2026. It applies if you provide designated services. In our last blog post we explained how you could determine if it would apply to you. Scroll down and use the link at the bottom if you need to (re) read it!

Yeah, but why is it called money laundering?

Before we get into the detail - if you’re wondering why it’s called Money Laundering, well it is because of this man.

Al Capone was so good at cleaning his money that he was only convicted for tax evasion!

Al Capone was a Chicago mobster from the 1920s. He added money from his criminal activities to the coins people used in his laundromats. By mixing the dirty criminal money with the clean money he made it all look clean, and the world got the term money laundering. The flaw in his system was he didn’t pay his taxes!

Fast forward to today and smart modern criminals are careful to ensure they look legitimate. To do that they will use financial professionals to be compliant and ensure they pay ALL their taxes! If you would like to do a bit of ‘research’ you could watch the gritty Netflix series 'Ozark’. It follows a financial professional caught up with criminals who force him to launder their money. He uses all sorts of different methods to clean cash across the episodes.

Worth subscribing to Netflix! Ozark shows the gritty depths money laundering.

Hiding, FATF, AUSTRAC and Reporting Entities

AML is about hiding. About criminals hiding their profitable criminal activities from law enforcement. They hide dirty money inside clean transactions. They hide behind professionals like Accountants, Lawyers and Real Estate agents. They hide their ownership in complicated ownership structures. They also use false identities to hide.

Because criminals can operate globally and fund terrorist organisations, we need a global system to stop them. The Financial Action Task Force (FATF) sets international requirements for AML. FATF are due to reassess Australia AML ranking in 2026. With Australia now extending AML to phase 2 entities it should see an improvement in its global AML country ranking (currently around 28th in the world).

AUSTRAC are the government body responsible for implementing FATF’s AML requirements for phase 2 entities. If you are captured by AML then you are referred to as a reporting entity. As a reporting entity your job is to collect the required information, and when required report it to AUSTRAC. Just reporting, not crime fighting, not detective work, not policing or investigating. Your role is simply to report. The information from all reporting entities together forms a picture of Criminal Intelligence that helps the Police do their job.

Criminals hide - AML/CTF captures information to find them

Start preparing by choosing your compliance officer

If AML applies, then your practice will become a reporting entity from 1 July 2026. First big decision is who will be your AML Compliance Officer (CO). They will be the key 'go to' person for all things AML for your practice.

Sole trader? Then you are the CO.
Have a team? Choose someone who is great at administration, attention to detail, and who can make important decisions for your practice.
AUSTRAC requires your CO to be resident in Australia and in a management-level position.

And then create an AML/CTF Program!

With the CO leading, before 1 July you need to have an AML/CTF Program in place. What does that mean?

It starts with a set of documents that describes your practice, your customers, the risks to you of money laundering/terrorism financing, and what steps you'll take to help prevent that happening. So pretty much all the things you will do as an AML reporting entity, including who does it, when they do it, and how they do it.

2Shakes have created an 'AML/CTF program on a page' diagram to show all the things an AML/CTF program needs to cover. It shows the 'big chunks' and some of the detail. Click below to grab a copy and get familiar with what AML covers. Click here to Get an AML Program on a page. While there is a lot to cover - 2Shakes is here to help.

Our program on a page shows everything in one place

2Shakes AML/CTF 'Starter Pack'

2Shakes have updated AUSTRAC’s Starter Kits to create a right sized AML program for small to medium practices using 2Shakes. They are free for you to use. You just need to update a few highlighted fields to have your first drafts ready for an:

AML Practice Risk Assessment
AML Policy
AML Process

Why are we providing updated Starter Kits?

It is amazing that AUSTRAC have produced accounting starter kits. But they are designed without considering a software platform like 2Shakes helping you. The benefits of using our updated Starter Kits along with the 2Shakes software are:

Save Time: The software simplifies many labour-intensive steps.
AML/CTF Jargon: We understand the 'legalese' and have made it easier for you to see what you need to do.
"Right sized": A lot probably won't apply, so we have highlighted those edge cases that could be removed to keep it simple and effective for you.
No Paper forms: With 2Shakes you won't need to send your clients long confusing paper forms to fill in.
Integrated with your QMS: Our starter kits factor in what you already do for onboarding as part of your Quality Management System.
AML CDD automated: Our kit reflects the automations and ease of recording information that come with software rather than paper.
PEP & Sanctions: With 2Shakes, PEP Checks happen automatically, at the same time as Identity Verification. No forms for you and your clients, no searching registers manually - just automated, instant results.

Remember: 2Shakes' starter kits align with AUSTRAC's compliance requirements. They retain all the useful bits of the AUSTRAC starter kit. We have right sized them for you and have replaced a lot of the time-consuming manual tasks with a smooth onboarding flow using 2Shakes.

What’s in the 2Shakes AML starter kit?

The 2Shakes templates are based off the AUSTRAC Accounting Starter kits, but describe how you meet AML/CTF requirements using smart software automations. This removes a large amount of the slow manual work that AML often requires.

2Shakes AML program starter kits will make it MUCH easier to get up and running

2Shakes incorporates your compliance requirements with 2AML built right into your engagement letter onboarding flow. Set up your agreement, authorities and identity verification in 2Shakes now, and it will be just a simple checkbox to turn on AML from the 1st of July.

2SignUP + 2Authorise + 2AML + 2ID = Effortless Onboarding.

One platform for your entire Onboarding and AML process. Simple for you, single touch for your clients. Try it now - Sign up for 10 free

Read more here on AUSTRAC’s Fact Sheet.

What’s AML & how do I prepare?