Mar 2026 | Identity and Fraud

As Australia’s AML/CTF reforms progress, many organisations are starting to review what the updated requirements may mean for their customer due diligence (CDD) and monitoring processes. Recent changes to the planned AML reform could mean changes to how you meet your compliance requirements.

On 22 January 2026, AUSTRAC released an update extending the timeframe by which existing reporting entities (tranche 1) need to comply with the reforms.

What does this mean for you?

The 3-year extension from 31 March 2026 to 30 March 2029 specifically applies to initial Customer Due Diligence (CDD), compliance notifications and independent evaluations. The extension is to ensure tranche 1 reporting entities have sufficient time to adopt the new reformed framework.

Other aspects of the reform would still apply on 31 March 2026 including ongoing CDD (as required by section 30 of the AML/CTF Act), transaction monitoring and suspicious matter reporting.

Tranche 2 reporting entities will need to be compliant from 1 July 2026.

Background to the AML reform:

  • The AML reform introduces several changes designed to modernise the regulatory framework. In addition to an updated AML/CTF program, tipping off rules, and expansion into new sectors, the reform applies a risk-based approach to know your customer (KYC).
  • Initial Customer Due Diligence (CDD) would enable reporting entities to determine reasonable steps required to verify customers based on risk assessment, prior to commencement of customer relationship. Whilst it’s less prescriptive, it places more emphasis on reporting entities to demonstrate a more targeted and flexible approach that is appropriate to mitigating money laundering and terrorism financing (ML/TF) risk.
  • Ongoing CDD requires reporting entities to apply continuous monitoring to ensure CDD is continuously updated to reflect ML/TF risks for each customer. This helps determine if simplified or enhanced CDD should be applied.
  • Politically Exposed Person (PEP) and sanctions screening continue to be a critical part of CDD. The reform further refines applicable PEP however emphasising initial and ongoing screening to be mandatory throughout the customer relationship.

Experian has helped many reporting entities in delivering robust identity verification solutions, including automated management to assist with their AML/CTF KYC compliance.

Get in touch with us to explore the right identity and compliance solutions for your organisation.

Timeline of AML/CTF Reform Legislative Changes

2024

  • November 2024 — AML/CTF Act Amendments Passed
    Parliament passes the AML/CTF Amendment Act 2024, introducing substantial modernisation of the AML/CTF framework and setting the foundation for new obligations, including expansion into Tranche 2 sectors.

2025

  • 31 August 2025 — New AML/CTF Rules Tabled in Parliament
    AUSTRAC tables the AML/CTF Rules 2025, which outline reformed customer due diligence, reporting, governance and program requirements for reporting entities.
  • October 2025 — AUSTRAC Releases Key Reform Guidance
    AUSTRAC issues detailed guidance to help reporting entities interpret and implement the forthcoming obligations under the new risk‑based regime.

2026

  • 22 January 2026 — Transitional Rules Update Announced
    AUSTRAC releases an update extending the transition period for initial Customer Due Diligence (CDD) for existing reporting entities from 31 March 2026 to 30 March 2029.
    This transitional relief only applies to initial CDD, not ongoing obligations.
  • 31 March 2026 — Start Date for Reforms for Existing (Tranche 1) Entities
    Unless covered by transitional relief, existing reporting entities must comply with the new AML/CTF obligations from this date, including:

    • Ongoing CDD
    • Transaction monitoring
    • Suspicious matter reporting

Tranche 1 entities may continue to use their pre‑reform ACIP approach for initial CDD only, until they opt in to the new framework or until the end of the transition period.

  • 1 July 2026 — Start Date for Newly Regulated (Tranche 2) Entities
    Tranche 2 entities—including legal, accounting, real estate and trust/company service providers—come under AML/CTF regulation for the first time.

2029

  • 30 March 2029 — End of Transitional Period for Initial CDD
    All existing reporting entities must have fully transitioned to the reformed initial CDD obligations by this date.

 

All the above information may be subject to change.

 

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