AML/CTF Transitional Rules — What You Need to Know

Under the transitional rules, you do not need to immediately re-do Customer Due Diligence for all existing clients. For customers you already had a relationship with before 1 July 2026, you have a transitional period to apply the new CDD requirements.

This means you should prioritise new clients and higher-risk existing clients first, then progressively apply CDD to your remaining client base over the transitional period. You must still apply CDD to any new clients from day one.

You have an extended deadline to notify AUSTRAC of your AML/CTF compliance officer. While you should appoint a compliance officer as part of your AML/CTF program from the start, the formal notification to AUSTRAC has a grace period.

This gives you time to determine the right person for the role, ensure they have adequate training, and submit the notification through the proper channels.

Independent evaluations of your AML/CTF program are not required immediately. AUSTRAC has introduced a staggered schedule so that businesses have time to establish their programs before being required to have them independently evaluated.

This means you should focus first on building a robust AML/CTF program, and plan for an independent evaluation in accordance with the staggered timeline AUSTRAC has set out.

If you are a current reporting entity already registered with AUSTRAC, your registration will be automatically rolled over to the new system. You do not need to re-register from scratch.

However, you should review your registration details to ensure they are up to date and reflect any changes to your business, services, or designated services under the reformed legislation.

Virtual Asset Service Provider (VASP) obligations originally scheduled for 31 March 2026 have been deferred to 1 July 2026. This aligns the VASP commencement date with the broader Tranche 2 start date.

If your business provides VASP services, you now have until 1 July 2026 to ensure your AML/CTF program covers these services.

Financial advisers are becoming Tranche 2 entities under the AML/CTF reforms. This means they will need to comply with the same AML/CTF obligations as other professional services sectors.

If you provide financial advisory services, check whether your specific services are classified as designated services and begin preparing your AML/CTF program accordingly.