In Australia, discussions about AML/CTF obligations are increasingly focused on regulatory updates, industry pressures, and the impending expansion of Tranche Two. 

But behind the policies and procedural languages lies a purpose that is often overshadowed. 

These rules were never designed to be merely administrative hurdles. 

They exist to confront real-world risks, issues that directly affect people, communities and national security. 

What is the background behind AUSTRAC’s recent reforms? 

AUSTRAC performs a dual role as Australia’s AML and CTF regulator and financial intelligence unit, and uses its role to disrupt organised crime and money laundering.

Recent reforms — including the expansion of AML/CTF obligations to an estimated 90,000 additional businesses — are driven by three critical pressures:

Organised crime groups are exploiting faster payments, digital assets, professional service providers, real estate, and non-traditional financial channels. Traditional control frameworks need to evolve with it..

Australia must meet the expectations of the Financial Action Task Force (FATF). With the next mutual evaluation in 2026, the government is under pressure to modernise and align with global best practice.

Money laundering and terrorism financing are intertwined with much of the organised crime that affects Australians.

AUSTRAC currently regulates over 19,000 reporting entities. With Tranche Two, that number will rise above 100,000. 

These reforms show the shift toward a risk-based, intelligence-led approach rather than a rules-only compliance model.

What is money laundering? 

According to AUSTRAC, money laundering involves dealing with or disguising the origins of illegal funds to make them seem legitimate.

Money laundering isn’t a victimless or technical financial crime. It is a critical enabler of some of the most harmful offences affecting individuals, communities and national security. When criminals can successfully launder money, they are able to protect and expand their illegal enterprises.

Money laundering fuels and enables serious crimes, including:

1. Child exploitation
2. Drug and sex trafficking
3. Scams
4. Fraud
5. Terrorism and extremist activity
6. The proliferation of weapons of mass destruction

The impact is broad:

1. It strengthens organised criminal networks
2. It increases violence, exploitation and community harm
3. It distorts markets and legitimate businesses

In short: money laundering allows crime to continue. Disrupting it disrupts the harm that sits behind it.

What is terrorism financing? 

Terrorism financing refers to the financial mechanisms and channels used by terrorist organisations to support actions that endanger domestic and international security.

The money that enables terrorist organisations to carry out terrorist activities can come from both legitimate and criminal sources.

Examples include funding:

• the purchase of weapons, vehicles and explosives for a terrorist organisation
• activities to prepare for a terrorist act
• to generally support any terrorist organisation.

Terrorist groups cannot operate without financial support, which is why detecting and disrupting financial flows is central to national security.

How much does organised crime cost Australians?

Research from the Australian Institute of Criminology estimates that serious and organised crime cost Australia up to $60.1 billion in 2020–21. 

The findings also emphasise the broader harm these activities inflict on the Australian community.

Money laundering enables organised crime groups to expand their profits and, in turn, the level of harm caused by criminal activity. These operations pose a direct threat to the community, with significant security, economic, and social consequences for all Australians.

It’s now time to do your part. Get ahead of financial crime and fulfill your obligations. 

Personr can streamline this process. 

Chat with a team member today to see how we can help.