AUSTRAC has announced that the Department of Home Affairs and AUSTRAC are working to finalise transitional rules to support a smooth implementation of the anti-money laundering and counter-terrorism financing (AML/CTF) reforms.

While the transitional rules are still being drafted, Austrac says that they will not amend the AML/CTF Act or Rules.

The key transitional areas include initial customer due diligence (CDD), notifying AUSTRAC of their AML/CTF compliance officer and International value transfer service reporting.

Registration roll-over
The transitional rules will confirm that the AML/CTF reforms:

• do not require re-registration of currently registered digital currency exchange provider as a virtual asset service provider
• do not affect a person’s status as a registered remittance network provider, remittance affiliate or independent remittance dealer.

Transitional period for initial customer due diligence 

The transitional rules will include a 3 year initial CDD transition period for existing reporting entities from 31 March 2026 to 30 March 2029. This includes existing digital currency exchange providers (soon to be virtual asset service providers).

During the transition period existing reporting entities may choose either to:

• continue to use their existing applicable customer identification procedures (ACIP) when onboarding a new customer for a period of up to 3 years; or
• transition to the reformed initial CDD obligations at any time from 31 March 2026 to 30 March 2029.

The transitional arrangement will only apply for initial CDD. Current reporting entities must implement ongoing CDD as required by section 30 of the AML/CTF Act from 31 March 2026.

Other CDD-related reforms will apply without exception from 31 March 2026. This includes lowering the initial CDD threshold for certain gambling services from $10,000 to $5,000.

This transitional period will not apply to newly regulated businesses (tranche 2) that commence enrolment from 31 March 2026.

Extended period for notifying AUSTRAC of an AML/CTF compliance officer

The transitional rules will extend the time period for reporting entities to notify AUSTRAC of their AML/CTF compliance officer.

Existing reporting entities will have until 30 May 2026 to notify AUSTRAC of their AML/CTF compliance officer.

Newly regulated businesses (tranche 2) and newly regulated virtual asset service providers will have until 29 July 2026 to notify AUSTRAC of their AML/CTF compliance officer.

International Value Transfer Services

The reporting obligation for international value transfer services will also be deferred until 2029. Existing international funds transfer reporting obligations will continue to apply until then. .

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