Federal legislation passed late last year which will extend onerous anti-money laundering and counter-terrorism financing (AML/CTF) regulation to property developers and real estate agents.
Affected entities need to begin preparations in 2025 to be ready to comply from March 2026.
Who will become regulated from March 2026?
- Property developers: developers who sell real estate directly, not brokered by an independent agent; and
- Real estate agents: agents who broker the sale, purchase or transfer of real estate.
What will be required?
AML/CTF regulation is about rigorous customer identification and verification, customer due diligence, transaction monitoring and reporting suspicious matters to assist law enforcement in the national fight against money laundering, tax evasion and other crimes.
In practice AML/CTF law is onerous because the burden of designing measures to be taken is partly shifted from government to business. Developers and agents must be careful to adopt risk-based procedures that meet the expectations of the regulator, which are highly tailored to their specific business.
Legal compliance requires your business to:
- Conduct a business-specific ML/TF risk assessment, in a particular written form;
- Draft and adopt an AML/CTF Program, of controls and procedures, which is tailored to your specific business;
- Enrol with the regulator, AUSTRAC;
- Appoint an AML/CTF Compliance Officer;
- Probity check staff;
- Conduct staff training;
- Verify the identity of property purchasers (and sellers, in the case of agents);
- Monitor transactions;
- Undertake deeper due diligence on riskier customers; and
- Make various reports.
What to do, when?
Copying ‘template’ documents or copying the risk assessment and program of another business will not result in compliance and will be easily detected by AUSTRAC.
By mid-2025 you should begin on a risk assessment so that you can be positioned to develop a tailored program, document procedures and train staff. We can guide you through this process, relatively inexpensively.
How we can help
HWL Ebsworth has market leading AML/CTF experience through our work with banks, casinos, investment entities, super funds and other currently regulated businesses.
We can advise you on, or prepare for you, your risk assessment, your Program and procedures and can conduct training. We can either do almost all of it for you, or guide you through a D-I-Y process, as you prefer.
For existing valued clients, we can give you an initial briefing and project plan – at no cost.
This article was written by Mizu Ardra, Partner and Anthony Seyfort, Partner.
