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Anti-money laundering and counter terrorism financing (AML/CTF) reform
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The Anti-Money Laundering and Counter-Terrorism Financing Act 2006 was passed by parliament on 7 December 2006 and received Royal Assent on 12 December 2006. The Act will be progressively implemented in stages over a 2 year period. Some substantive provisions are to commence immediately as set out in the timetable for commencement more 
 
Anti-Money Laundering and Counter-Terrorism Financing Bill 2006:

  • Text of the bill 
  • Explanatory memoranda 
  • Bills list entry 
  • Abstract 
  • Bills Digest 
  • Second reading speeches 
  • Proposed Amendments 
  • Schedule of Amendments
This Act and the accompanying Rules represent the first tranche of AML/CTF reform, aimed at financial institutions, gambling services and bullion dealers. The second tranche of AML/CTF reform is to bring accountants, lawyers, real estate agents and jewelers into the AML/CTF regime.  
 
What does this mean for me? More 
 
AML/CTF Rules 
 
Key obligations under the AML/CTF Act are to be set out in AML/CTF Rules which, together with the AML Regulations, will be legally binding. The AML/CTF Rules are being issued by the Australian Transaction Reports and Analysis Centre (AUSTRAC) which is to become the national AML/CTF regulator. At the time of passage of the AML/CTF Act the full suite of Rules had not been finalized and consultation between AUSTRAC and industry is continuing. Further information regarding the progress of these Rules and the operations of AUSTRAC are available from the AUSTRAC website here. 
 
An overview 
 
Money laundering involves the injection of funds generated from illegal activities into the banking system and other legitimate investment vehicles in order to disguise the nature of their origins. 
 
Terrorism financing on the other hand is the use of money, which may or may not be generated from criminal activity, for the financing of terrorist activities.  
 
Since 2004, the Institute, together financial services industry representatives, has engaged in exhaustive consultation with government in relation to the reform of the anti money laundering and counter terrorism financing regime in Australia. This package of reforms is intended to replace the Financial Transaction Reports Act 1988 and the Financial Transaction Reports Regulations 1990. 
 
For the history of the AML reform process More 
 
The reform of the Australian AML/CTF regime follows an international directive on Money Laundering from the Financial Action Taskforce (FATF), of which Australia is a founding member. FATF is an inter-governmental body now comprising 33 member countries which sets international standards and develops and promotes policies to combat money laundering and terrorist financing. 
 
FATF issued a set of Forty Recommendations in 1990 and in October 2001 expanded these to include Eight Special Recommendations on Terrorist Financing. In 2003 the Forty Recommendations were revised and with the Eight Special Recommendations provide a comprehensive framework of measures for combating money laundering and terrorist financing through the criminal justice and regulatory systems of member states. 
 
For more information regarding FATF, the Revised Forty Recommendations, Mutual evaluation reports and annual reports click here 
 
For an overview of the latest news and updates on this issue click here 
 
Last updated: 1 February 2007