Most of the preparation for 1 July 2026 is about things you produce: a program, a risk assessment, client files, a training record. (The records each obligation should leave behind) There is a quieter change that gets almost no attention in the rush, and it is worth a few minutes because it points at a person rather than a document. From the reforms, AUSTRAC has a strengthened power to require someone to sit down and answer its questions.
On 5 March 2026, AUSTRAC published guidance on its new compulsory examination powers. The mechanism is a section 172A notice, introduced by the Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024. A section 172A notice requires a person to attend an examination, answer questions, and provide documents. (AUSTRAC news release) It is an information-gathering tool, and it sits alongside AUSTRAC's other powers, such as the ability to order a firm to appoint an external auditor at its own expense. (How the external-audit power has already been used on a club)
First, what it is not
It is easy to read "compulsory examination" and picture an interrogation. AUSTRAC's guidance is explicit that this is the wrong picture. The examinations are described as not routine and not punitive. They are used where AUSTRAC needs to understand how a business is handling money laundering risk, to clarify information, or to engage with a reporting entity.
The most important line for anyone feeling a jolt of anxiety reading this: receiving a section 172A notice does not necessarily mean AUSTRAC believes a person has broken the law. In AUSTRAC's own framing, an examination is in many cases simply a way to understand what has happened. As CEO Brendan Thomas put it, the power and the reforms around it give AUSTRAC better tools to understand money laundering risks and how businesses are managing them, which is ultimately about disrupting serious crime, not catching out a small firm that is doing its honest best. The focus is on gathering accurate information so AUSTRAC can make informed regulatory decisions.
So this is not a reason to panic, and it is not something most firms will ever encounter. It is a reason to understand the shape of the thing, because the new entrants on 1 July are exactly the population AUSTRAC is building its understanding of.
What an examination actually involves
The guidance sets out the mechanics, and they are more procedural and less dramatic than the name suggests. A section 172A notice explains what information is being sought. At the examination, an examiner asks questions, and the person is required to answer and to provide the documents named in the notice.
A few protections are built in and worth knowing. A person can have legal representation assist them, and the guidance covers the role a lawyer can play. The guidance also addresses how the information someone provides is handled, and it acknowledges the human side: a person can speak about the notice with a health professional. None of this is legal advice, and if you ever receive a notice the right first move is to get your own. But the headline is that an examination is a structured, supported process, not an ambush.
Why it matters for a small firm from 1 July
Here is the practical link to your business. The purpose of this power is to let AUSTRAC understand how a business handles money laundering risk. That means the subject matter of any conversation with AUSTRAC, formal or not, is your program and how you actually apply it. (What "a program in place" actually requires)
Think about what it would mean to answer questions about your own compliance, calmly and accurately, with the documents to back it up. A firm that genuinely runs its program can do that without strain: it can explain its risk assessment, show how it does customer due diligence, point to its screening and monitoring records, and name the person who owns the decisions. (How the program runs day to day) A firm whose program is a document nobody opens cannot, because there is nothing to point to and no consistent practice to describe.
That is the quiet lesson. This power does not change what good compliance looks like. It just makes the gap between a real program and a paper one easier for AUSTRAC to see, because a paper program does not survive being asked about. The same records that demonstrate good faith on any other day are the records that let a person answer questions with confidence. (The evidence trail, in detail)
The person who would actually field this
In practice, the questions land with the people who own the program. Your nominated AML/CTF compliance officer is the natural point of contact and the person who should be able to speak to how the firm assesses risk, applies CDD, and decides whether to report. (What the compliance officer is responsible for) In a small firm that is usually the owner or a principal, which is all the more reason the role cannot be a name on a page. If the person who holds the title could not, today, explain the firm's own program from memory and find the records to support it, that is the gap to close this week, not because an examination is likely, but because being able to answer for your program is what running one means.
What to do with this before 1 July
Nothing dramatic. Do not let a power you will probably never meet distract you from building the program you definitely need. The preparation for a section 172A examination is identical to the preparation for ordinary good compliance: have a real, risk-based program; apply it consistently; keep the records; and make sure a named person genuinely owns it and could speak to it. If you have done that, you have already done everything this power would ask of you. If you have not, the fix is not examination-specific, it is the whole job, and there are five days left to start it in good faith. (What AUSTRAC expects if you are not fully ready)
Where AML Mate fits
The thing that makes an examination answerable is the same thing that makes day-to-day compliance work: a program you can actually point to, and a record of having applied it. AML Mate generates a risk-based program tied to your business, then keeps the operating trail as you go, client onboarding with CDD and beneficial-ownership capture, dated PEP and sanctions screening, transaction monitoring against your red flags, SMR and TTR lodgement, training records, and seven-year record keeping, all under one named compliance officer and retrievable in one place. Not sure you are even in scope? The free compliance check tells you in two minutes, no login. Then start a 14-day free trial, cancel anytime, and build a program you could explain to anyone who asks, because you are the one running it.