Money Laundering Update
AUSTRAC has released its 2026 Money Laundering Update, providing a ‘top-up’ to the National Risk Assessment published in 2024.
The core money laundering channels remain largely unchanged, but the threat environment is becoming more complex as technology advances, high-risk services move to more lenient jurisdictions, and domestic legislative decisions impact the organised crime market.
Key developments are as follows.
Artificial Intelligence
AI is rapidly increasing the scale and sophistication of money laundering. AUSTRAC expects AI to enhance:
Identity fraud and highly realistic fake documents
Impersonation used to access financial and non-financial systems
Transaction structuring designed to mimic legitimate customer behaviour
Communications supporting account misuse
Trade-based laundering and shell companies that appear legitimate
Virtual Assets
Virtual asset service providers continue to migrate offshore to jurisdictions with weaker regulatory oversight. Differences in customer identification, reporting, and information-sharing standards make tracing cross-border flows increasingly difficult. As activity shifts to decentralised and offshore platforms, money laundering is moving into less visible parts of the financial system.
New regulated entities
Tranche 2 entities will be regulated on 1st July. They have been assessed as ‘high’ risk or ‘very high’ risk of being exploited for money laundering. AUSTRAC expects that the regulation of Tranche 2 entities will improve the understanding of:
high‑risk entities
service convergences (i.e., multiple high-risk services offered by the same reporting entity)
the movement of illicit funds.
Illicit Tobacco
One of the most significant developments is the rapid growth of the illicit tobacco market. This crime type generates billions of dollars in criminal proceeds and is increasingly linked to high-risk channels such as cash-intensive businesses and remittance providers. Previously assessed as a medium threat, illicit tobacco is now approaching a higher money laundering risk rating.
The illicit tobacco market is increasingly controlled by transnational organised crime groups and outlaw motorcycle gangs. Competition for market control has contributed to what we read every day in the news: widespread arson attacks, multiple homicides and other violent assaults.
AUSTRAC comments that domestic demand will almost certainly remain high and organised crime groups will continue to participate in trafficking and supply activities, given the high profitability of doing so. To address this threat, AUSTRAC calls upon the nation to:
reduce the availability of illicit products in the community
target associated violent criminal activity and
effectively detect and disrupt illicit financial flows.
What’s next?
Get in touch if you have any questions on how the Money Laundering Risk Update may affect your business.
