Today, I want to talk about the future of Australia’s Anti-Money Laundering and Counter-Terrorism Financing regime and what the upcoming changes mean for all of you, as leaders in the real estate sector.

The volume of crime associated with money laundering activities is simply enormous. Serious and organised crime is costing Australia more than $68 billion every year. Globally, estimates put the figure at $2 trillion.  In Australia If we just look at the illicit drug market alone, we estimate its worth $12.5 billion. That’s just one type of crime and none of that money is legitimate, all of it needs to be laundered through the Australian economy.

These crimes are the worst types of behaviour. I’m talking about human trafficking, modern slavery, child sexual abuse and the international drug trade, all of which cause significant harm to the community. Every dollar laundered helps those perpetrating crimes like these to flourish. 

Criminals will use any avenue available to them to try and legitimise their ill-gotten gains. We know that real estate is a very attractive asset for them; most money laundering avenues result in the loss of some capital, but when it comes to real estate in this country, criminals are often making huge profits through capital growth, so for them it’s a win-win.

Through law enforcement activity and our own intelligence, we can see how property in Australia is taken advantage of by criminals. Last year, the Criminal Assets Confiscation Taskforce secured the forfeiture of a regional Victorian property after a man was jailed for an $800,000 GST fraud. The man had tried to conceal his ownership of the property by using a family member to transfer the funds and purchasing the property in a third party name.

Our intelligence regularly uncovers criminals laundering not just the proceeds of Australian crime but we are seeing the proceeds of international criminal organisations being laundered in the Australian economy, particularly in Australian real estate.

The proceeds of corruption in the Pacific and Southeast Asia are also being used to buy property. Real estate in Australia has become an attractive place for organised crime groups from Southeast Asia to store wealth. The reforms to the AML/CTF act aren’t just about stopping Australian criminals, they are also about stopping international criminals parking their dirty money here.

In another example, an international crime family who appear on an Interpol red list, purchased $750m worth of real estate in Sydney in one series of purchases. Let that sink in, that’s $750m in transactions where an agent just like all of you, has had their services taken advantage of by criminals, to launder and store their illicit wealth in Australian property.

Criminals don’t make that kind of money without inflicting significant harm.

In another example, just last week a Russian couple were arrested in Queensland with 1.9 million in cash and will stand trial for alleged money laundering through Australian real estate. This case began with an AUSTRAC tip off - our analysts alerted the Criminal Assets Confiscation Taskforce to structured and large cash deposits being fed into ATMs and used to purchase properties in Australia. 

The couple deposited more than $4 million into ATMs across 576 transactions, which were allegedly structured to avoid the $10,000 reporting threshold. We identified deposits going into real estate agents’ trust and non-bank financier accounts. The couple were allegedly purchasing and rapidly repaying mortgages for waterfront mansions as well as a high-rise unit. Ultimately more than $15 million was restrained by the taskforce which included 7 properties, cash, cryptocurrency, and funds in various bank accounts.

The court is yet to decide if the funds were the proceeds of crime, but what is certain is that the couple’s behaviour was suspicious and intended to evade detection.

More concerning though, is that not one professional involved in those real estate transactions had an obligation to alert AUSTRAC or even ask any questions that could have triggered their suspicions. 

If I was a business owner, the last thing I would want to discover, is that my legitimate professional service had been exploited to benefit organised crime.

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, that’s 65% of all restraints.  

This 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 whose only purpose is to continue the cycle of crime and harm. 

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

Those professionals, who are in a unique position to identify this suspicious activity, have had no legal obligation to do so.  

The reforms aim to close these gaps and in the process to protect your businesses and your staff from criminals who, at the moment, know that the real estate sector can be used to further their malicious enterprise.

And that is why the Government has enacted this legislation, to strengthen our financial system, prevent harms and put the brakes on criminals using these avenues to launder their money.

From 1 July 2026 as I am sure you are aware, a range of new sectors, including real estate, who provide designated services will have obligations under the AML/CTF actAustralian Anti Money Laundering law. The law does this by declaring certain types of services as Designated Services. Those Designated Services are subject to anti money laundering controls.

So what real estate transactions constitute a designated service?

You’re providing a designated service when you broker the sale, purchase or transfer of real estate as part of a business.  This includes the transfer of property whether or not a financial transaction has taken place. It also includes leasehold arrangements of more than 30 years.

Importantly, property management services, such as residential leases, are not a designated service so you won’t have obligations in relation to rental properties that you manage.

If you are providing a designated service you must comply with the AML/CTF Act and Rules. This means you will need to enrol with AUSTRAC and meet your AML/CTF obligations.

We know that new regulation comes with additional burdens on business, and we want to make this transition as easy as possible. 

Most importantly, we don’t expect you to do this alone.

We are working on in depth guidance to help you identify risks and ensure you have the best measures in place to mitigate those risks.

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

An agent selling $30 million homes in Toorak doesn’t face the same risks as someone selling house-and-land packages in Werribee or Sunbury. 

We have shifted our regulatory approach to take a stronger focus on risk. We will be inherently risk based in our Regulatory approach and we will be much clearer about where we see risk and what we expect industry to do to mitigate it.  

In the past, we have always expected businesses to assess their own risk and build their own programs. But we recognised that for sectors which are new to AML/CTF regulation, this is a huge impost. So for typical non-complex businesses, AUSTRAC will help them identify the key risks 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 be required but AUSTRAC will be providing much clearer guidance and support. 

At the end of the day we are interested in making it hard for criminals to profit from their crime. We are not interested in just going around ticking boxes for compliance sake. 

We are not real estate agents so we don’t know the details of how your businesses work and that’s why we have been engaging with your industry bodies to ensure the new rules are as easy as possible to implement. We really want to minimise the impact of this additional regulation. 

In seeking to understand how the industry operates we're crafting regulations to align with the flow of information through a transaction. 

We don’t want to create duplication, so as long as businesses have an agreement in place to share information, in many cases it only needs to be collected once. 

So that means, as long as an information sharing arrangement exists, know your customer processes undertaken as part of a mortgage application, for example, can be shared with all professional services involved in the transaction and satisfy this obligation.

For this approach to work, a formal agreement must exist and the information has to actually be shared, so that at the end of the day, everyone in that transaction has confidence that they know who they’re dealing with. All of this must happen before settlement, which is when the risk of money laundering crystallises.

I envisage that in time, industry can invest in common platforms so that everybody can share relevant information under a suitable agreement, and multiple businesses don’t need to do the same thing multiple times.

Although we are supportive of a collaborative approach, it is very important to understand that none of your AML/CTF obligations are optional.

For example, KYC is really about knowing who your customer is and being confident you understand who you're dealing with. I'm sure many real estate agents are already doing that. But if someone is deflecting or being difficult when you’re asking them to confirm who they are, that should be a red flag.

It might be that the person is giving you forged documents, or it might be that you think the person's trying to hide their identity from you. That could well be the basis of a suspicious matter report that you should lodge with AUSTRAC.

Suspicions can be raised by other factors too – we can learn these lessons from our international counterparts.

In one example from FINTRAC, Canada’s Financial Intelligence Unit, an individual attempted to purchase property where the deposit for $375,000 CAD was received from a third party company with no known association to the buyer, and with a murky beneficial ownership structure.

The purchaser refused to provide the requested information, such as who was in control of the company.

In this instance, there were two glaring red flags as the deposit was received from a third party and the purchaser had also refused to provide information about the beneficial ownership. Subsequently, the agent notified FINTRAC of their suspicions.

If you see issues like this, it’s time to submit an SMR. Just like this agent did. 

In New Zealand, several lawyers and real estate agents were involved in unknowingly facilitating a string of real estate purchases for a known criminal and their associate. They slipped through the cracks because the properties were purchased in the name of the associate and other relatives of the offender. 

The individual was either in prison for drug dealing or unemployed at the time of the purchases. 

Although these transactions included a number of red flags that the proceeds of crime were being used, none of the real estate agents or lawyers who facilitated the transactions detected them.

This case highlights the importance of knowing who your customer is, and conducting due diligence such as open source searches, that may give you information that substantiates your red flags. 

When facilitating real estate transactions, you really are our eyes and ears. 

There is a perception that a suspicious matter report is like calling the police and reporting a crime. But it is actually a lesser thing: when you submit an SMR, you're just reporting something that doesn't look right and once we receive that information, we look further into that to try and determine if something untoward is going on.

Submitting that report doesn’t mean you have to stop the transaction, SMRs are exactly what they say they are – a suspicion of a business. They may or may not be linked to criminal behaviour, it’s our job to interrogate our intelligence holdings, and where appropriate refer what we find to law enforcement. 

We regulate the banks and other financial institutions and they are sending suspicious matter reports all the time. The transactions are completed, because it is a suspicion, it's not proof of a crime. 

I’m regularly asked the question, what can we start doing now to prepare for the reforms?

We will be publishing the new AML/CTF rules next month and we intend to deliver detailed guidance in October. We will also be providing starter programs which you can adopt as your AML/CTF program.

In the meantime there are things you can get started on now to help you prepare.

Firstly, I know there are a number of operators out there trying to get businesses to buy their AML products by creating fear that we are expecting perfection on 1 July – I want to set the record straight - where they are making genuine efforts to meet their obligations, we're not looking to throw the book at people on day one. We're looking at helping people comply and helping people understand what they need to do to address crime in their particular area of business.

There is no problem with using third parties to provide services, many of the big banks outsource. But if you are thinking about taking this approach, it’s imperative that you do your research. Look at their track record, make sure they are up to the job, because if they are not and you fail to comply, it’s you who will have a problem.

It’s very important to start to familiarise yourselves with money laundering techniques so that you can draw out suspicion when the changes come into effect.

AUSTRAC has a wide range of information already available to help current and new entities 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 indicators businesses should look out for. The starter programs will include a risk assessment and provide information and guidance about your reporting obligations and customer due diligence. 

Enrolment is a key requirement for all businesses who provide designated services. From 31 March next year you will be able to go to our website and enrol. I suggest you put that date in your diary and ensure you start the process as early as possible. 

We expect every business will be enrolled before the changes come into effect on 1 July 2026.

You will need to have an AML/CTF compliance officer and that person needs to meet a character test as well as have an appropriate level of expertise for the size of the business. For small businesses that compliance officer can be the head of the business. But for larger businesses, they should recruit the expertise needed to help them meet this requirement.

You can also start thinking about what processes you can put in place to ensure accurate record keeping.

You will need to keep records around how you verify each customer’s identity. You don't have to keep copies of that information, but you need to keep a record of how you have done it. So for example, if you sighted a driver's licence and passport, you need to keep a record to show that process was undertaken. 

The 2 most important things we want you to do are, 1) understand your customer, and 2) report to us when a transaction seems suspicious. When it comes to your AML obligations those are the 2 most important things.

We have identified that cash in real estate has a very high risk, so if your risk assessment determines, which it probably should, that large cash transactions have a low likelihood of occurring but have a high risk if they do, and a customer wants to pay cash for a property, or presents at your office with physical cash as their deposit, then you should be undertaking enhanced customer due diligence checks.

Enhanced customer due diligence could mean checking the customer’s source of funds or wealth to verify it came from a legitimate source or checking to verify if the customer is a politically exposed person. This can include simple steps like conducting internet searches.

If these additional steps raise any suspicions or you can’t verify the source of wealth, then that’s when it’s time to submit a suspicious matter report to AUSTRAC. 

The transaction can then continue as normal.

From our point of view we will never tell you to stop providing services to a customer, or to require the customer to transact in a different way. For example, put the cash in a bank account and transfer it to your trust account. However, you are always within your right to refuse to provide a service where you assess that a customer poses too high a risk to your business.

Again, we’re not expecting perfection on day one. What we expect is that businesses take reasonable steps towards understanding the risks they face so they can help us combat criminal activity.

That means on July 1 next year you will be enrolled as a reporting entity, have an AML program, either because you have adopted the starter program provided by AUSTRAC or developed your own, you have an AML/CTF Compliance Officer, you have trained your staff on your AML/CTF program and processes and you’re ready to ask clients questions and report suspicious activity. 

We recognise that, for businesses in the newly regulated sectors, these obligations are new, and I reiterate, we do not expect newly regulated businesses to be expert at identifying and controlling money laundering risks from day one. We do expect honest efforts to meet your obligations and report suspicions to AUSTRAC.

We are committed to setting newly regulated businesses up for success and that is why we’re providing guidance and starter programs.

We want to work with you to build a resilient and effective regime. We are on this journey with you.

Please understand though - there will be no excuses for wilful non-compliance. 

For any business that turns a blind eye and allows their services to be used to wash the proceeds of crime, we will take action. We intend to direct our enforcement efforts toward businesses that wilfully ignore their obligation to enrol or make no meaningful effort to comply. 

We are already working with law enforcement and regulatory partners to identify businesses that are heavily exposed to criminal activity and we will be starting with them on day one.

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

The goal of the reforms is simple: to stop criminals from exploiting legitimate business in order to clean their dirty money.

The reforms are not about increasing regulatory burden—they’re about safeguarding our communities. 

We’ll be welcoming about 80,000 more businesses into our regulated population which includes every real estate agency in the country. This is the biggest change to the regime in two decades and it really is necessary to prevent organised and serious crime and to uphold our financial integrity.  

Our AML/CTF regime is only as strong as the sum of its parts so by including real estate and other high risk industries, 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. Not just in real estate but in banking, law, accounting, or crypto —in any industry providing high risk services—there is a responsibility to help protect Australia’s financial system from abuse. 

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

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. 

Thank you.