AML/CTF Horizon Scan

With AML/CTF reform for Tranche 2 set to commence in less than two months, the regulatory landscape is relatively settled, with a few key developments to note.

Annual Compliance Reporting update

There have been amendments to the submission period for the Annual Compliance Reports. Reports will now be due between 1 July and 30 September each year and will cover AML/CTF business activities for the preceding financial year (1 July to 30 June). Your first Annual Compliance Report will be due on 30 September 2027.

Proposed legislative amendments

On 12 March 2026, the Minister for Home Affairs introduced proposed amendments to the AML/CTF Act into Parliament. Among a range of changes, several technical updates to customer due diligence (CDD) requirements are particularly relevant for reporting entities:

• Removal of the requirement to determine whether a person acting on behalf of a customer is a politically exposed person (PEP). The obligation to assess whether such a person is subject to targeted financial sanctions will remain.

• A consequential change clarifying that enhanced CDD is not triggered solely because a person acting on behalf of a customer is a foreign PEP.

• An amendment to section 30 of the AML/CTF Act, replacing the current subjective trigger (“has doubts about”) with an objective test. Reporting entities will be required to review and update CDD information where there are reasonable grounds to doubt the adequacy or accuracy of the CDD information held on a customer.

What this means in practice

Individually, these changes may appear technical, and many are not yet in force. However, they signal a clear direction of travel. For firms that have only recently implemented or updated their policies, the question is less about whether you have a framework in place, and more about how adaptable that framework really is.

Regulatory expectations will continue to evolve. The real test is whether your policies and procedures can keep pace — not just on paper, but in how they are applied in practice.

Will your AML framework hold up as expectations change?

If you have built your policies in-house, or if you have used AI-generated policies and you aren’t 100% sure your framework holds up, I’m opening a limited number of Compliance Implementation Reviews each month.

I don’t sell templates. I provide a professional stress test of your current setup. In our 90 minutes together, we will:

• Audit the Logic: We’ll ensure you don't just have a policy, but that you understand the “why” and “how” behind your obligations.

• Identify Blind Spots: We’ll pressure-test your procedures to uncover the gaps between your documentation and your firm’s real-world risks.

• Build Your Roadmap: You’ll leave with a clear, actionable plan to move from “hoping it’s right” to being in full control of your firm’s compliance.

You’ll walk away knowing exactly where your risks are and how to fix them.

The investment for this review is $500 + GST.