Navigating AML compliance changes: A guide for compliance officers

As the landscape of anti-money laundering and counter-terrorism financing (AML/CTF) regulations continues to evolve, compliance officers are faced with the critical task of adapting to upcoming changes that will take effect on 1 July 2026. In our recent webinar, James De Swert and I underscored the importance of compliance and the expanded responsibilities that legal and accounting professionals will need to navigate under the new regime. Read on for more. 

What are the requirements for an Anti-Money Laundering Compliance Officer?

Under the AML/CTF Act the Anti-Money Laundering Compliance Officer must satisfy the following criteria:

• Be an Australian resident;
• Be a fit and proper person; and
• Be in a senior position that allows for level of independence, discretion and autonomy to be exercised.

The Compliance Officer is responsible for the day-to-day management of the internal AML/CTF program by overseeing any escalations, ensuring policies & procedures are up to date, and serving as the main point of contact for any dealings or reporting requirements with AUSTRAC. 

The importance of compliance

The regulatory environment is tightening, with higher expectations for compliance officers to ensure that their organisations conduct thorough risk assessments and enforce robust client due diligence (CDD). Failing to comply with the law could result in fines and reputational damage.

These changes not only affect the financial industry, but also place legal and accounting professionals at the forefront of identifying and mitigating risks associated with financial transactions.

Understanding red flags

During the webinar, we highlighted several red flags that compliance officers should be vigilant about when assessing potential money laundering & terrorism financing risks. These include unusual client behavior, complex legal structures, and unusually rapid financial transactions. The real-life cases discussed illustrated the consequences of poor compliance practices, particularly in property transactions, where firms have been scrutinised, and in some cases fined, for failing to verify the sources.

Proactive risk assessment

With new regulatory requirements on the horizon, the need for a proactive approach to risk assessments and client intake processes has never been more crucial. Firms need to integrate advanced technology to automate new business intake & onboarding, transaction monitoring, and streamline the collection of client information. By leveraging these tools, compliance officers can enhance the efficiency and accuracy of their due diligence efforts.

The role of technology in compliance

As compliance officers prepare for the new AML regulations, it is essential to adopt innovative technologies that aid in client due diligence and conflict searches. A thorough understanding of who is instructing the firm is vital, particularly in high-stakes acquisitions or transactions. For example, as outlined in the webinar, utilising corporate tree data tools can help identify ownership structures and facilitate comprehensive conflict searches, ensuring that prior business relationships are disclosed and assessed for potential conflicts.

Best practices for client due diligence

A systematic approach to client due diligence is paramount in detecting money laundering and terrorism financing risks. Compliance officers should begin by gathering essential information about clients, including their ownership structure, geographical footprint, the nature of their businesses, and any associated risks. A thorough internal investigation into what types of designated services the organisation provides also needs to be conducted. Specific considerations should also encompass the firm’s communication and delivery methods. For example, do you interact with your clients face-to-face or predominantly online. The collation of this information will inform your risk-based approach and the structure of your AML/CTF Policy and accompanying procedures. 

Documenting processes for future assessments

In the pursuit of operational efficiency and thorough risk evaluation, it is beneficial to capture timestamps and maintain accurate documentation throughout the client intake process. This practice not only streamlines future assessments for returning clients but also builds a repository of evidence that can be invaluable in regulatory scrutiny.

Foster a culture of compliance

Navigating the fast-approaching AML compliance changes requires diligence, adaptability, and a commitment to embracing technology and systematic processes. Compliance officers play a pivotal role in ensuring that firms are well-prepared to meet new regulatory demands while maintaining effective client service. By prioritising risk assessments and employing thorough client due diligence procedures, organisations can mitigate potential risks and foster a culture of compliance that will sustain them in a challenging regulatory environment.

Learn more about how iManage can help guide your firm through these changes schedule a demo for more personalised information.