Establishing a strong AML/CTF culture (Reform)

Learn about the importance of establishing a strong anti-money laundering and counter-terrorism financing (AML/CTF) culture in your business. This includes how to manage and mitigate your money laundering, terrorism financing and proliferation financing risks (we refer to these as ML/TF risks).

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Overview of a strong AML/CTF culture

This section refers to the Act section 26H(1).

A strong AML/CTF culture reflects how a business values and prioritises AML/CTF. This links to the governing body, which must appropriately oversee and reasonably manage the business’ AML/CTF compliance and ML/TF risk framework. 

Creating a strong AML/CTF culture

A strong AML/CTF culture is achieved by your governing body, senior managers and AML/CTF compliance officer working together to make sure your AML/CTF obligations are met. 

A strong AML/CTF culture isn’t a legal requirement but is often a reliable driver and indicator that your business is taking reasonable steps to meet its obligations. We’ll look for evidence of such a culture in our supervision.

Indicators of a strong AML/CTF culture

A business with a strong AML/CTF culture:

  • understands their ML/TF risks and continues to proactively update their understanding in response to changing circumstances
  • assesses high ML/TF risk relationships independently, not based solely on business interests
  • provides regular AML/CTF training to staff, senior management and the governing board
  • considers ML/TF risk when making key decisions and avoids creating unacceptable risks
  • has disciplinary measures for staff that don’t follow AML/CTF procedures
  • rewards positive compliance behaviour in the business.

The business also:

  • has an AML/CTF compliance officer that’s independent from external and internal influences and challenges business priorities that create ML/TF risk
  • has an AML/CTF compliance officer that’s knowledgeable and well-resourced
  • has a governing body that sets the tone from the top and takes ML/TF risk mitigation and AML/CTF compliance seriously
  • has a governing body that engages meaningfully with reports from the AML/CTF compliance officer
  • makes sure that senior managers take ML/TF risk mitigation and AML/CTF compliance seriously and prioritise this in their management decisions
  • has a governing body that receives regular AML/CTF updates from the AML/CTF compliance officer, including concerns about compliance
  • promotes AML/CTF processes and procedures and trains staff on compliance obligations and ML/TF risks
  • has a governing body that works with the AML/CTF compliance officer to promptly address compliance concerns
  • has a mechanism for staff to confidentially raise compliance concerns.

Indicators of a poor AML/CTF culture

A business with poor AML/CTF culture:

  • has a governing body that isn’t engaged with AML/CTF risk management and compliance and doesn’t receive updates on ML/TF risk and compliance
  • views AML/CTF compliance as a legal obligation only, rather than a business priority
  • appoints an AML/CTF compliance officer who lacks credibility, experience or authority
  • ignores reports and recommendations from the AML/CTF compliance officer
  • fails to consider ML/TF risk in key business decisions
  • doesn’t promote AML/CTF processes, procedures, and training for staff
  • doesn’t engage with the AML/CTF compliance officer to resolve concerns. 

This guidance sets out how we interpret the Act, along with associated Rules and regulations. Australian courts are ultimately responsible for interpreting these laws and determining if any provisions of these laws are contravened. 

The examples and scenarios in this guidance are meant to help explain our interpretation of these laws. They’re not exhaustive or meant to cover every possible scenario.

This guidance provides general information and isn't a substitute for legal advice. This guidance avoids legal language wherever possible and it might include generalisations about the application of the law. Some provisions of the law referred to have exceptions or important qualifications. In most cases your particular circumstances must be taken into account when determining how the law applies to you.

Last updated: 16 Oct 2025
Page ID: 1292

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