Starting in July 2026, nearly every Australian accounting firm will face a raft of new obligations relating to anti-money laundering. These requirements could significantly increase the cost of doing business, adding yet another regulatory burden to manage.

Reforms to the Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Amendment Act 2024 substantially broadened the scope of the regime. The Tranche 2 classification now targets nine designated services (see breakout, below), many of which are among the most common services that accounting firms provide.

Whether it’s assisting clients with real estate transactions, setting up legal entities or managing client assets – if you’re doing more than just tax returns, you’re likely affected by this new legislation.

The Australian laws are even more comprehensive and strict than those passed in New Zealand in 2023. Penalties for non-compliance in New Zealand are up to NZ$5 million, while Australian corporations can pay fines of up to AU$21 million.

How to comply with the AML laws

Australian and New Zealand accountants are now required to vet new and existing clients, and report them if they believe they are engaging in money laundering. This requires setting up a collection of processes such as risk assessments, compliance programs, staff training and proactive reporting to the regulator.

CA ANZ estimates that the legislation will add 10–20% more compliance work to members’ existing onboarding practices.

Fortunately for Australian accountants, New Zealand’s early adoption of broader anti-money laundering (AML) enforcement spurred several software companies to develop applications designed to streamline the AML compliance process.

A rapid response

First AML launched its all-in-one, user-friendly compliance platform in New Zealand in 2017, following the explosive revelations in the Panama Papers, which highlighted New Zealand as a potential tax haven. The New Zealand parliament quickly passed legislation, giving businesses only six to 12 months to comply with new AML regulations.

First AML later expanded into Australia for financial services and then into the UK, and has more than 100 staff globally.

Co-founder Bion Behdin says the challenge with AML is carrying out the compliance without  impacting the customer experience.

“How do we operationalise this pretty grey, confusing regime into our day-to-day activity and maximise efficiency? Because this is customer onboarding and if you make your customer have a bad onboarding relationship, they’re not going to like you very much,” Behdin says.

This is very apparent with larger banks that can take months to onboard a client due to the complexity of vetting them for AML risk.

“If you’re an accounting firm or a law firm, you don’t have the balance sheet to wait four months to onboard a client. It’s all about operational efficiency,” he says.

Behdin splits a firm’s AML program into three ‘buckets’. First, there’s the firm-wide risk assessment and the overall compliance program, which are similar to a health and safety program for monitoring transactions managed by the firm. This sets the groundwork for identifying risks and managing them effectively.

The second bucket is staff training, which helps employees recognise red flags such as unusual customer behaviour or suspicious transactions, like clients bringing in large sums of cash. The training helps staff spot and respond to these risks as they arise.

The third bucket is customer due diligence, which happens daily or weekly. For every new customer, firms must perform checks based on their risk assessment and firm guidelines.

Firms can use AML software to scale the level of due diligence up or down, depending on the risk profile of the client. For low-risk clients, firms may only need to perform basic checks such as ensuring they’re not sanctioned – essentially running their name through a database. Higher-risk clients may need to supply documents like passports or driver’s licences.

First AML assists in customer due diligence during the onboarding process. It conducts identity checks, screens clients against sanctions and politically exposed persons lists, performs adverse media searches and stores sensitive identification documents.

It services firms with a handful of staff, up to large enterprises.

Size is not a factor

Anti-money laundering first emerged as a concern for banks handling international transactions and casinos dealing in large amounts of cash. However, the latest AML regulations aren’t determined by size but by activity.

“You can have very small firms, even sole operators, that are caught under the AML laws and the number of customers they onboard is almost irrelevant,” says Anthony Quinn, CEO of Arctic Intelligence.

One of the challenges of screening high-risk customers is accurately identifying individuals against global watchlists. For instance, a common name like ‘John Smith’ may appear multiple times, making it difficult to determine whether the customer is a known criminal or just another individual with the same name, Quinn says.

To address this, firms need controls in place to verify key customer details like their name and address, and screen them against watchlists. Then, accountants can distinguish true matches from false positives, while assessing other risk factors such as connections to politically exposed persons (PEPs) or criminal associates.

Arctic Intelligence is headquartered in Sydney and has operations in Hong Kong, New Zealand, Singapore, the United Kingdom and the United States. It sells two solutions, one for small and medium businesses, and the other for larger corporations.

The AML Accelerate Platform for small and medium businesses helps firms run risk assessments, document their AML compliance program, and identify and mitigate potential money laundering risks. It also shows firms their risk exposure based on products, services and distribution channels.

Key features include customer risk assessments, PEP and sanctions screening, customer identification and verification, enhanced due diligence for high-risk customers and the ability to build controls to manage identified risks, and receiving alerts about any regulatory changes.

Focus on efficiency

The big question facing smaller firms is how to meet minimum requirements with minimal overheads. Another Australian regtech player called VerifiMe is taking a different approach, by creating digital passports that automatically verify clients. Once a client has set up their authorised profile, they can go to an accountant, lawyer or real estate agent and avoid repeating the same verification process.

“I think this is a fairly serious overreach of the legislature,” says VerifiMe CEO Alistair McKeough. “Very small businesses don’t have compliance teams, they don’t have tech teams to integrate software, they don’t have a need or a desire to go through a huge internal change management process to adopt a new client onboarding method. They have not had to trouble themselves with collecting, holding and processing personally identifiable information and people’s identity documents, and are now going to have to come up to speed with this.”

VerifiMe creates a digital token, which is a secure, reusable digital representation of a customer’s identity verification. Once a client’s identity is verified – whether through documents, biometric data, or other means – the software mints a token to represent that verified information.

When the client interacts with another business, they can give permission for the token to be used, without needing to upload their documents again.

It is similar to modern online payment systems like PayPal or Apple Pay, where customers don’t need to repeatedly provide payment details. Just as these payment systems act as trusted intermediaries, identity tokens allow businesses to verify customers without the need to collect personally identifiable information (PII), improving both security and convenience.

VerifiMe is also betting that AML verification will gradually establish a network effect, where customers use an identity wallet for business interactions. Once a client has validated their identity with their lawyer, they won’t want to go through the whole process again with their accountant. They will look for firms that already use that identity network or they will ask their current provider to join it.

Prepare early

Australian firms preparing for AML compliance by July 2026 should assess their risk profiles and explore software solutions that streamline customer due diligence, sanctions screening and identity verification. Resources from CA ANZ and vendors can provide valuable guidance. For example, First AML’s ‘countdown to compliance’ series offers webinars, guides and practical advice tailored specifically to accountants.

“With all the notice being given by AUSTRAC [Australian Transaction Reports and Analysis Centre], I don’t think they’ll offer the same level of leniency as New Zealand did in the first year,” warns Behdrin.

Starting early and wrapping your head around the implications of AML legislation will stand you in good stead when the new laws take effect.

Anti-money laundering software 

Regtech solutions to help accounting firms with AML obligations.

Software	Built for	Category	Customer due diligence (including know your customer)	Risk assessment	Ongoing monitoring	Pricing (approx.)	Countries available	URL
2Shakes	SMEs	AML compliance platform	x			From NZ$30/month	New Zealand	https://www.2shakes.co.nz
AML360	Firms of all sizes	AML compliance platform and services	x	x	x	From NZ$700/month	New Zealand, Australia	https://aml360software.co.nz/aml-software-products
AMLHUB	Firms of all sizes	AML compliance platform	x	x	x	POA	New Zealand	https://www.amlhub.co.nz/industries/accountants
Arctic Intelligence – AML Accelerate	SMEs	AML compliance platform	x	x	x	POA	Australia, NZ, UK, US, Singapore	https://arctic-intelligence.com/platforms/aml-accelerate
Arctic Intelligence – Risk Assessment	Corporates	AML compliance platform	x	x	x	POA	Australia, NZ, UK, US, Singapore	https://arctic-intelligence.com/platforms/risk-assessment
First AML	Firms of all sizes	AML compliance platform	x	x	x	POA	Australia, NZ, UK	https://www.firstaml.com/au
VerifiMe	Individuals	Identity verification tool	x	x	x	$6/Individual verified	Australia, New Zealand	https://www.verifime.com/accountants
Vigilance	Firms of all sizes	AML compliance platform	x	x	x	From NZ$249/month + GST	New Zealand	https://www.vigilance.co.nz

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Nine designated services 

Australian accountants offering any of the services in the list below must register as a reporting entity with the regulator, AUSTRAC, before 1 July 2026. 

1. Assisting clients who want to sell, buy or transfer real estate.
2. Assisting clients who want to sell, buy or transfer a body corporate or legal arrangement.
3. Receiving, holding, controlling, disbursing or managing a client’s money, accounts, securities, virtual assets or any other property.
4. Assisting clients in organising, planning or executing a transaction for equity or debt financing relating to body corporates or legal arrangements.
5. Selling or transferring a shelf company.
6. Assisting clients in planning or executing the creation or restructuring of a body corporate or a legal arrangement.
7. Acting as, or arranging for clients to act as a director or secretary of a company, a power of attorney of a body corporate or legal arrangement, a partner in a partnership, a trustee of an express trust, a position in any other legal arrangement that is functionally equivalent.
8. Acting as, or arranging for clients to act as, a nominee shareholder of a body corporate or legal arrangement, on behalf of a person.
9. Providing a registered office address or principal place of business address of a body corporate or legal arrangement.

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How to comply with Australia’s AML laws

Australian accountants must establish and maintain an AML/CTF program by 1 July 2026 that includes:

Risk assessment: Identify and assess money laundering, terrorism financing and proliferation financing risks associated with your services and clients. AML/CTF policies: develop policies to manage and mitigate identified risks, ensuring compliance with the AML/CTF Act and rules.

Document and review the AML/CTF program: The program must be approved by the CEO or board and regularly reviewed by an independent external or internal party.

An AML/CTF compliance officer: Designate a fit and proper person to oversee and implement the AML/CTF program.

Customer due diligence: Implement procedures to verify the identity of clients and beneficial owners, understand the nature and purpose of the business relationship, and conduct ongoing monitoring to detect suspicious activities.

Reporting obligations: Report suspicious matters, threshold transactions and international funds transfer instructions to AUSTRAC within specified timeframes.

Record keeping: Maintain detailed records of transactions, client identification and due diligence processes for a minimum period as stipulated by the Act. This includes an annual compliance report.