AML/CTF Transitional Rules — What You Need to Know

Existing reporting entities get a 3-year transition for initial CDD: from 31 March 2026 to 30 March 2029. During this window you can keep using your current customer identification procedures, or move to the reformed initial CDD obligations at any time.

Two things are not deferred. Ongoing CDD (transaction monitoring and keeping customer information current) applies from 31 March 2026, and new customers must be onboarded under the new CDD requirements from your start date (1 July 2026 for Tranche 2 entities). Prioritise new and higher-risk clients first.

Existing reporting entities enrolled on 30 March 2026 had to notify AUSTRAC of their AML/CTF compliance officer by 30 May 2026. Newly regulated (Tranche 2) entities have an extended deadline that aligns with enrolment.

You should still appoint a compliance officer as part of your AML/CTF program from the start. The grace period applies to the formal notification to AUSTRAC, not to having the role in place.

Independent evaluations are not required immediately. An established reporting entity that has already completed at least one independent review must complete its first evaluation under the new regime by the later of four years after that last review, or 31 March 2027.

Newly regulated businesses can set an appropriate deadline for their first independent evaluation in their AML/CTF policies, based on the nature, size and complexity of the business. Focus first on building a robust program.

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.

Existing digital currency exchange (DCE) registrations automatically convert to Virtual Asset Service Provider (VASP) status from 31 March 2026, and core VASP obligations commenced on that date. They were not deferred to 1 July 2026.

A limited set of newly registrable virtual asset services has some obligations deferred to 1 July 2026, but this deferral excludes item 50A services (exchanging virtual assets for fiat currency), which are covered from 31 March 2026. If you provide virtual asset services, do not assume a 1 July start: most obligations already apply.

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.