You may be able to start providing a designated service to a customer before you complete initial CDD if the designated service is any of the following:

• provided at or through a permanent establishment in Australia
• a financial institution opening an account or allowing deposits
• a certain financial market transaction that must be performed rapidly
• a real estate transaction
• provided in a foreign country. 

What parts of initial CDD you can delay will be different in each of these circumstances. 

In all the above circumstances, before you start providing the designated service you must determine on reasonable grounds that both:

• it’s essential to delay initial CDD to avoid interrupting the ordinary course of business
• there’s a low additional risk of money laundering, terrorism financing and proliferation financing (we refer to these as ML/TF risks) occurring if you delay initial CDD.

Before you start providing the designated service you must also have anti-money laundering and counter-terrorism financing (AML/CTF) policies to both:

• complete initial CDD as soon as reasonably practicable after starting to provide the designated service to the customer, and no later than the timeframes in the Anti-Money Laundering and Counter-Terrorism Financing Rules 2025 (the Rules)
• mitigate and manage any associated risks of delaying initial CDD.

What is ‘reasonably practical’ is an objective assessment based on the facts that apply to you. You must be able to demonstrate that you’ve taken reasonable steps to complete initial CDD at the earliest possible time. 

Delayed initial CDD and your AML/CTF policies

Your AML/CTF policies must enable you to complete initial CDD as soon as reasonably practicable after you start providing the designated service, and no later than the timeframes in the Rules. 

We expect your AML/CTF policies will set out when it’s appropriate for you to delay initial CDD, in accordance with the Act and the Rules. 

For example, it won’t be appropriate to delay parts of initial CDD if you’re unlikely to later be able to collect information from the customer that you need for initial CDD or where the customer could exploit your service for ML/TF before you identify them and their ML/TF risk. For example, where a customer is cashing out winnings at a casino or is purchasing an item of jewellery. 

Your AML/CTF policies must set out how you’ll manage and mitigate any ML/TF risks that may arise if you delay initial CDD. For example, processes to mitigate the risks:

• of returning funds directly to the customer if you complete initial CDD after starting to provide the service and the customer falls outside your risk appetite
• that the customer could use your service to prove their identity with other service providers. For example, by withholding or clearly marking that correspondence or statements issued to the customer relates to an unverified account.

If you decide to return funds to the customer after you complete CDD and find that the customer falls outside your risk appetite, be careful when making the refund to avoid converting or legitimising funds. If possible, avoid a payment of cash or by way of a bank cheque, and return electronic deposits to the originating account. In most cases, you must not return funds to a customer until you complete initial CDD.

Interrupting the ordinary course of business 

It isn’t a sufficient reason to delay initial CDD because it would be inconvenient for you or the customer to do it before you provide the designated service.

We also expect you to be able to demonstrate how you determined that the ML/TF risk of delaying verification was low.

Examples of when it may be essential to delay initial CDD to avoid an interruption to the ordinary course of business may include:

• allowing a customer to open an account remotely or online (but not allowing any transactions on the account), where you can’t immediately verify their identity at the time using electronic data.
• where it won’t be possible to complete initial CDD on the successful bidder at an auction before the auction starts
• for customers in an emergency, such as family and domestic violence or natural disasters who don’t have access to identity documents
• certain visa applicants who need to open an Australian bank account and deposit funds as part of the visa application process, and you can’t complete initial CDD until the visa is granted
• time-critical services where for commercial reasons you need to lock in an exchange rate, interest rate or other rapidly fluctuating aspect of the service on the day the customer requested the designated service.

Designated services provided in Australia

You may be able to delay verifying some know your customer (KYC) information if you’re providing a designated service at or through a permanent establishment in Australia. 

This doesn’t apply if one of the special circumstances for delayed initial CDD is available. In these cases, refer to those specific requirements.

If you delay verification, you must complete initial CDD on the customer before you:

• transfer, or allow or facilitate the transfer of money, property or virtual assets for or on behalf of the customer
• otherwise make money, property or virtual assets available to the customer (other than holding it in an account or on deposit from the customer). 

Matters you can delay

This means you can start providing a designated service after you’ve collected but before you verify the KYC information about:

• the identity of any person on whose behalf the customer is receiving the designated service
• the identity of any beneficial owners of the customer
• whether the customer, any beneficial owners, any person on whose behalf the customer is receiving the designated service or any person acting on behalf of the customer is a politically exposed person (PEP) or person designated for targeted financial sanctions (TFS).
• the nature and purpose of the business relationship or occasional transaction (where enhanced CDD applies). 

Civil penalties may apply if you don’t verify KYC information within the required timeframes below.

Opening an account and allowing deposits

Financial institutions and credit card issuers and acquirers can start providing a designated service to a customer before completing initial CDD when the designated service is any of the following:

• opening an account
• allowing a deposit to the account
• reasonably incidental to providing either of these 2 designated services. 

If you delay initial CDD, you must complete initial CDD on the customer before you either:

• transfer, or allow or facilitate the transfer of money, property or virtual assets for or on behalf of the customer
• otherwise make money, property or virtual assets available to the customer (other than holding it in an account or on deposit from the customer). 

You must complete initial CDD as soon as reasonably practicable after you start providing the designated service.

Certain financial market transactions that must occur rapidly

You can start providing a designated service to a customer before you complete initial CDD if all the following apply: 

• the designated service is acquiring or disposing of a security, derivative or foreign exchange contract on a declared financial market (within the meaning of the Corporations Act 2001)
• the designated service is provided at or through your permanent establishment in Australia
• this must occur quickly because of financial market conditions relevant to the transaction.

The service must not involve the acquisition of an interest in a managed investment scheme to which section 1019B of the Corporations Act 2001 applies.

You also must not do any of the following:

• accept physical currency or virtual assets to fund the designated service
• permit the customer to transfer, or otherwise part with, proceeds from a disposal of an asset to which the designated service relates
• resell, transfer, or otherwise part with an asset related to the designated service that has been acquired on the customer’s behalf
• allow the customer to be recredited with or obtain a refund of the purchase price.

You must complete initial CDD as soon as reasonably practicable and within 5 business days of starting to provide the customer with the designated service.

Real estate transactions

If you’re brokering the sale, purchase or transfer of real estate—for example, as a real estate agent—you may delay completing initial CDD on the party you aren’t acting for.

If you’re acting for the seller or transferor, this means you:

• must complete initial CDD for the seller/transferor before you start providing them with a designated service
• may complete initial CDD on the buyer/transferee 15 days after the exchange of contracts, or before settlement (whichever is earliest).

1. If you’re acting for the buyer or transferee, this means you:

• must complete initial CDD for the buyer/transferee before you start providing them with a designated service
• may complete initial CDD on the seller/transferor 15 days after the exchange of contracts, or before settlement (whichever is earliest).

If you’re providing professional services related to the sale, purchase or transfer of real estate, you can start helping a buyer or transferee in a real estate transaction. This can occur before you complete initial CDD. 

For example, if you’re a legal practitioner or conveyancer assisting a client who is the buyer of real estate. You must complete initial CDD 15 days after the exchange of contracts, or before settlement (whichever is earliest). 

Designated services provided in a foreign country

You can start providing a designated service to a customer without completing initial CDD if all of the following apply:

• you’ll provide the designated service at or through your permanent establishment in a foreign country
• the law of that country gives effect to the Financial Action Task Force (FATF) recommendations
• those laws allow you to provide the service before you complete initial CDD as required under the AML/CTF Act. 

You must collect and verify KYC information as required by the foreign country’s law.

Related pages

• Initial customer due diligence