Today, I want to talk about the future of Australia’s Anti-Money Laundering and Counter-Terrorism Financing regime - reforms that go beyond meeting international standards and that focus us on a regime dedicated to reducing financial crime.

The problem is substantial - transnational crime is increasingly complex and global in nature. The volume of crime associated with money laundering activities is enormous. Serious and organised crime is costing Australia more than $68 billion every year. Global estimates put the figure at $2 trillion.

These crimes fund the worst types of behaviour—and every dollar laundered helps those crimes flourish.

This is a major threat to financial systems and national security. 

We’re not just dealing with crime networks anymore—we’re facing distinct money laundering organisations that compete for contracts, probe our defences, and exploit any regulatory gaps they can find.

They operate as businesses with compartmentalised roles, trusted intermediaries and adaptive strategies. They are increasingly investing in sophisticated AI and large data analysis. They are specialist money launderers with every trick up their sleeves who bid against each other for work and look for holes in our regulatory controls so they can launder through them.

Not only do these organisations understand the legal nuances in each jurisdiction – and we constantly see them jumping at holes in our systems – they view the difference and complexity of transnational legal and financial systems not as impediments but as enablers.

Money laundering organisations have also treated Australian professionals as enablers. Some lawyers, accountants, real estate agents, and dealers in precious metals and stones have been exploited or co-opted to help launder illicit funds.

Consider the scale of the coordination needed to set up and layer transactions through onshore and offshore shell companies, bank accounts, cryptocurrencies, and placement in trades and assets.

They can’t do all of this from the outside. A transnational money laundering organisation is acutely aware how to present a façade of legitimacy across financial systems, hijack legitimate transactions and appropriate professional services.

These are not victimless financial transactions. The money being cleaned through our systems originates from drug trafficking, human trafficking, child exploitation, cybercrime, environmental destruction, and corruption.

Enabling laundering enables criminals to continue importing more illicit drugs, continue committing more crimes, and causing more harm in our communities and around the world.

This illicit wealth is used to further entrench criminal enterprises, fund their expansion, and create systems of influence that are corrosive to the fabric of society.

Every dollar laundered is a dollar reinvested in harm—harm to individuals, families, communities, and businesses.

Right now, there are large gaps in the our system. These gaps contribute to an environment where transnational organised crime and professional money laundering organisations can inflict harm not only on the Australian community but the global community.

Why Australia? Because we have a large, stable economy. Because we have a $12.4 billion illicit drug market. And because—until now—we’ve had entire sectors abused by criminals to stash their profits with little fear of detection.

The size and stability of our economy has the capacity to absorb foreign proceeds of crime, and unregulated sectors of the Australian economy are being used by criminals to store significant illegal wealth.

In Australia these professions have had no obligation to question the source of funds. No duty to understand the risk that criminals could be abusing their services and no requirement to report suspicions of criminal activity.

Criminal groups have been able to actively seek out Australian professions to help them launder and hide the proceeds of their crimes, and this loophole is being exploited every day.

Let me share a couple of examples that illustrate how this works in practice.

In one recent case, 15 individuals were convicted following a multi-agency police investigation into an elaborate tax fraud and money laundering scheme. Among those convicted were two lawyers and an accountant.

The accountant created a front company under their partner’s name.

The purpose?

To quietly divert profits from tax fraud into the hands of criminal actors.

One of the lawyers orchestrated the concealment of over $23 million through their firm’s trust account. They went as far as using stolen identities to establish fake ledgers and create fraudulent documents.

Once the money was in the trust account, it was reintroduced into the legitimate economy through a range of methods: loans to developers, solicitor trust transfers, and shell company accounts.

This level of cooperation should not be able to occur so easily.

And while this case involved criminal collusion, there is a risk that any professional could be taken advantage of without the right due diligence.

In another example, earlier this month, the Criminal Assets Confiscation Taskforce secured the forfeiture of more than $4.5 million worth of assets, including a Queensland waterfront mansion, a luxury car, and about $1.1m in Bitcoin, after identifying the assets as suspected proceeds of crime.

Not one professional involved in that real estate transaction had an obligation to alert AUSTRAC, or even ask any questions that could have triggered their suspicions.

Not only is this unfairly sloping the playing field, criminals are making even more money on their secure and stable investments in Australian real estate.

Instead of resolving themselves to a loss margin – usually incurred in money laundering, they are actually making capital gains on the investment. This isn’t just laundering money, this is waxing, polishing and buffing dirty cash.

Since 2020 the AFP has restrained over $1.2 billion in criminal assets. These restrained assets include more than $790 million in residential and commercial real estate properties, representing 65% of all restraints.

It pushes up property prices, it takes a property that would otherwise have been purchased by a hard working Australian and puts it in the hands of organised criminals seeking to line their own pockets with ill gotten gains.

We see time and again that property is used to layer and integrate funds, often unknowingly facilitated by professional advisers.

Professionals who are in a unique position to identify suspicious activity—lawyers, accountants, real estate agents, and dealers in high-value goods—have had no legal obligation to do so.

From 1 July next year, that changes. Known as the “tranche 2 reforms” recent legislative changes will finally bring a range of professional service sectors into the AML/CTF regime.

We are welcoming about 80,000 more businesses into the AML/CTF regime. This is the biggest change to the regime in two decades and it was necessary to support crime prevention and uphold our financial integrity.

The goal of these reforms is simple: close those avenues to organised crime.

We’re aware that these reforms businesses ranging from sole traders to global firms. And we know risk looks different across sectors.

A real estate agent selling $30 million homes in the eastern suburbs of Sydney doesn’t face the same risks as someone selling house-and-land packages in Western Sydney.

A major part of these reforms, for all our reporting entities, from March next year, is a stronger focus on risk. We are making significant changes inside AUSTRAC as well as changes to how we regulate.

We will be profoundly risk based in our supervisory approach and we will be clearer about where we see risk and what we expect industry to do to mitigate it.

Historically, we’ve expected businesses to assess their own risk and build their own programs. But we recognised that tranche 2 sectors are new to AML/CTF regulation. So for typical non complex businesses, AUSTRAC will help them identify the key risks are and help them understand what they need to do to address those risks.

For more complex businesses across our regulated population, tailored risk assessments will still be required—but with much clearer guidance and support from us. Clearer public information about the actual risks we are seeing and clearer guidance about what works to address those risks.

We’ll be using big data sets in more sophisticated ways to better get on top of industry wide risk. We have supercharged our Fintel Alliance and created a collaborative analytics hub with industry.

We kicked that off last November where we collected all the cash deposit data from the big four banks for a period of six months – over  56 million data points.

In just a week, AUSTRAC analysts, analysts from the banks, and  analysts from the AFP interrogated that data and uncovered money laundering networks and methods that were not visible to any one organisation on their own.

We’re testing a forward leaning risk based regulatory approach.

I established an internal Cryptocurrency Taskforce focused on better understanding and controlling the risks of digital currencies. It began by focusing on crypto ATMS.

The findings are staggering. There is clear evidence of these machines being the channel for major international scams and money mule activity, we think up to one in ten transactions could be illicit.

Worse still, we have seen scammers coercing victims into becoming money mules. They convince people to launder funds in exchange for false promises to return lost money. We’ve seen $300,000 in life savings vanish, only to have the victim unknowingly launder money for the same criminals who scammed them.

There were only 23 crypto ATMs machines operating in 2019, there are now upwards of 1,800.  Australia has become an avid early adopter of cryptocurrency, but the technology hit the market before regulation had a chance to catch up.

To combat this, we are doing a number of things; we have directed the operators of these machines to have specific controls in place that limit transactions, increase diligence, mandate onchain tracing and other more specific controls.

We are closing accounts that look inactive and we are working with law enforcement on several specific businesses.

We are deliberately working to try and get aggregate level change across the industry rather than focusing on specific business operator compliance.

Back to tranche 2. For tranche 2 businesses we’re not expecting perfection on day one. But we are expecting businesses to take reasonable steps towards understanding the risks their business’ face so they can help us combat these crimes.

While the rules are still being finalised there are things business can start to think about now. They can start thinking about their risks now. Start identifying who in their business will be responsible for AML compliance and start becoming familiar with AML/CTF obligations like customer due diligence and reporting.

AUSTRAC has a wide range of information already available to help current and new entities to understand risk. These include our money laundering national risk assessment and the terrorism financing and proliferation financing national risk assessments.

Our financial crime guides provide information about specific crime types and the indicators businesses should look out for. We will also be distributing starter packs for tranche 2 entities, which will include a risk assessment, and providing information and guidance about reporting obligations and customer due diligence.

We’re working with the peak bodies and learning from them to make this transition practical. We don’t want duplicate processes. If a business is  already collect customer data, we want you to be able to use it—once, efficiently.

We are trying to understand the flow of information through for example, property transactions, so we can allow for the most efficient activity across that transaction.

We are on this journey with all our reporting entities and we want to work with them to build a resilient and effective regime.

But let me be clear: there will be no excuses for wilful non-compliance.

For any entities who turn a blind eye and continue to enable their businesses to wash the proceeds of crime, we will take action. We intend to direct our enforcement effort to businesses that wilfully ignore their obligation to enrol or otherwise make no meaningful effort to comply.

We are already working with law enforcement and regulatory partners to identify those tranche 2 businesses that are heavily exposed to criminal activity.

On day one, that’s where we’re starting.

This is the biggest expansion for us in nearly 20 years.

Our systems, staffing, and intelligence capabilities are expanding too. We’re investing heavily in data, AI, and third-party analytics. We’re building a stronger, more proactive intelligence picture—not just from reports, but from across the entire economy.

We’re evolving from reacting to individual matters, to targeting the entire environment that enables money laundering.

As I said, this means looking at the landscape of risks present in the environment and how the different risks intersect. This means understanding displacement of risk and tracking how criminal elements and their illicit funds move between groups, typologies, sectors, platforms, and across borders.

We’re also deepening public-private partnerships. Through an expanded Fintel Alliance, we aim to bring newly regulated sectors into collaborative efforts to identify and address emerging risks.

Fintel Alliance is also boosting our data analytics capabilities as we’re now gathering data more broadly, from the sector, partners and commercial, that will allow us to leverage big data in partnership with industry in ways we haven't been able to before.

In other words, we’re gaining an understanding of the whole environment that money launderers are using so that we can crack that environment, not just the individual case.

This will really set us on the front foot to be able to respond much more quickly than we have in the past, and work swiftly in partnership with law enforcement to shut down criminal activity on a much larger scale.

Our AML/CTF regime is only as strong as the sum of its parts so by including tranche 2 entities and strengthening our partnerships ,we are putting Australia in the best possible position to stamp out criminal exploitation of the financial system.

We all have a role to play. Whether you’re in banking, law, accounting, real estate, crypto—in any of these industries providing high risk services—you have a responsibility to help protect Australia’s financial system from abuse.

These reforms are not just about rules—they’re about safeguarding our communities.

I’m confident that, working together, we can detect, deter, and disrupt criminal activity—and establish Australia as a global leader in AML/CTF reform.

We want to work with industry to ensure all regulated businesses are closing the door on criminal infiltration, infiltration which harms the Australian community and, damages the legitimacy and sustainability of business. 

I’m confident that working together to put the upcoming reforms in place, Australia can be the model on which other nations base their AML/CTF regimes. Thank you.