Exemption policy

We’re committed to protecting the financial system and the community from serious and organised crime. All reporting entities need to comply with their anti-money laundering and counter-terrorism financing (AML/CTF) obligations.

There are limited circumstances where the AUSTRAC CEO may grant an exemption from, or modification to, your AML/CTF obligations. An exemption or modification cannot be used to avoid your obligations or reduce compliance costs where there is a lawful and effective way to comply.  

To understand your obligations before applying for an exemption or modification, you should read information on: 

• exemptions from AML/CTF obligations 
• obligations and guidance 
• our regulator statement of expectations. 

If you're part of a newly regulated industry, we have developed program starter kits to help you understand your obligations and develop an AML/CTF program. 

What we cannot do

We cannot give determinations or rulings on whether you're providing a designated service.

We cannot give advice on whether or how the legislation applies to specific businesses or situations. We will only consider an application on the basis that the applicant is seeking relief from obligations that apply to them.

We will not grant temporary relief from your obligations while your application for exemption or modification is being considered. This applies if an exemption or modification that was made under section 248 has expired and we're assessing a renewal application. You must comply with your obligations unless you're granted an exemption or a modification declaration is made.

We will not give assurances that enforcement action will not be pursued as an alternative to the grant of an exemption or modification under sections 247 or 248 of the Act.

Types of exemptions and modifications

We have 2 types of exemption and modification:

• an exemption made through the AML/CTF Rules under section 247 (General exemptions) of the Act
• an exemption or modification specifically for you, under section 248 (Exemptions and modifications by the AUSTRAC CEO) of the Act.                  

Our approach to exemptions and modifications

We apply a risk-based approach to achieving our regulatory objectives.

This means that an application will only be successful if we're satisfied that:

• the associated money laundering, terrorism financing and proliferation financing risks are low (we refer to these as ML/TF risks)
• it's appropriate in all circumstances to grant the exemption or modification.

 We can decline to consider applications where:

• the exemption is being made for regulatory certainty
• designated services aren't carried out at the time the application is made
• it isn't certain whether designated services will be carried out in the future
• the application is inconsistent with the legislative intent of the AML/CTF regime, including where relief sought would undermine the operation of the regime
• an applicant doesn't provide information we request within the specified timeframe
• an applicant requires a decision by a particular time and this timeframe would not give us sufficient opportunity to assess the application. 

Processing times

We endeavour to process all exemption applications as expeditiously as possible. The time required to process applications can be impacted by factors including where a matter involves a new or complex policy or legal issue.

We assess each exemption or modification application on its merits. We may ask you for more information, which can extend the assessment timeframe.

Applications are assessed in priority order and not always in the order received. We may assess applications on an urgent basis in exceptional circumstances where the applicant has clearly set out unforeseeable factors that render the application urgent.

Preparing an application

If you're making an application for an exemption under section 247, you must address all matters set out on our website page, applying for a Rules based exemption. An application for a Rules-based exemption doesn't need to be in a prescribed form - an email to exemptions@austrac.gov.au will suffice. This type of exemption is usually made by a group of reporting entities or on their behalf by a representative body, like an industry association.

All exemptions and modifications under section 248 will have cessation dates. If you seek to extend or vary an exemption or modification, you should apply at least 6 months before the date the change is requested to commence.

If you're making an application under section 248, submit your exemption application (Word, 163 KB) as early as possible (please note: AUSTRAC cannot receive emails above 20MB in size – applications can be separated into multiple emails if required).

Providing the following information will generally help minimise delay in assessing the application:

• set out reasons why an exemption or modification is required, including why our existing guidance about your obligations and program starter kits (if applicable) don't sufficiently address your or your industry’s circumstances
• ensure you provide us with a risk assessment that includes, but not limited to, your business’ activities, products and services, customers, delivery channels and geographic exposure when submitting your application 
• clearly explain the basis on which the estimates of compliance costs are calculated where the application claims the costs of compliance are excessive.

What we consider when assessing applications

We must be satisfied that any proposed exemption or modification from your obligations under the Act presents a low risk of money laundering or terrorism financing in relation to the relevant designated service you provide. If it's determined that the ML/TF risk is low, we must also have regard to factors including: 

• if the exemption would adversely affect the effective operation of the AML/CTF regime
• if the exemption would affect the financial system’s integrity or effectiveness
• the nature and extent of the exemption, including the impact on regulatory objectives of the AML/CTF regime including reducing any unnecessary burden on the regulated entity
• if granting the exemption would be consistent with the intent and purpose of the AML/CTF regime
• the risk profile of the applicant, including whether granting the exemption would increase ML/TF risk or otherwise pose a risk to the financial system or public interest 
• the applicant’s customer types, including any politically exposed persons
• the types of designated services the applicant provides
• how the applicant delivers their services
• any foreign jurisdictions the applicant deals with
• issues of competitive neutrality, including whether the exemption would create an unfair advantage for the applicant or disadvantage to others
• any relevant Financial Action Task Force (FATF) Recommendations and United Nations conventions and resolutions.

We also consult with and consider comments by:

• reporting entities or their representatives
• partner agencies 
• the Privacy Commissioner on matters relating to privacy functions.

We may also consider any ministerial directions or policy principles given under the Act.

Decisions

Decisions are made by the AUSTRAC CEO or their delegate who can either:

• grant the exemption, with or without conditions (failing to comply with the conditions is a civil penalty offence)
• refuse the application.

We don’t have to provide reasons for our decisions. 

If an application under section 247 is successful, we will publish draft Rules on our website for comment. They’re also subject to parliamentary scrutiny and may be disallowed.

Expectations

You can expect that we'll:

• exercise the power to grant or refuse an exemption or modification consistent with the intent and purpose of the Act
• assess each application on a case-by-case basis
• acknowledge receiving your application
• ask for more information if required to decide the application
• inform you in writing of the outcome
• comply with the provisions in the Act
• review this policy regularly to ensure it remains current.

We expect you to:

• understand how the AML/CTF regime applies to you, including by getting professional advice if required
• understand and plan your business operations to comply with your obligations
• make applications in good faith
• let us know of any non-compliance that could affect your application
• be aware of your obligations that includes our information on exemptions from AML/CTF obligations, obligations and guidance and our regulator statement of expectations and plan operations on the basis that you will comply with them, regardless of making an application
• notify us in writing of any changes to your circumstances which may affect any current application, or existing exemption or modification.

If you have any questions, you can contact us.

Specific information relating to applications for exemption or modification to tipping off 

The tipping off provisions of the Act were reformed from 31 March 2025 onwards (see tipping off guidance).

Any exemption or modification applications in relation to the tipping off provisions of the Act should clearly establish the circumstances in which disclosure would be justified, having regard to the risk of prejudicing an investigation. 

More information

Our contact centre can help answer general questions about your AML/CTF obligations.

The content on this website is general and isn't legal advice. Before you make a decision or take a particular action based on the content on this website, you should check its accuracy, completeness, currency and relevance for your purposes. You may wish to seek independent professional advice.

Related pages

• How to apply for exemptions and modification.