Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2026: new AUSTRAC powers explained

The short answer

Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2026: new AUSTRAC powers explained

The Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2026, introduced by the government into the House of Representatives on 12 March 2026, amends the Anti-Money Laundering and Counter-Terrorism Financing Act 2006. Its central change enables the CEO of AUSTRAC (the Australian Transaction Reports and Analysis Centre) to restrict or prohibit reporting entities from using high-risk mechanisms to provide designated services. It also updates the definition of financing of terrorism to reference new offences for financing a state or terrorist organisation, and makes technical amendments to improve the operation of the AML/CTF regime. The bill is currently before the House of Representatives.

This is a federal system guide. State constitutions, parliaments and local-government laws can allocate comparable functions differently.

The useful question is not only “what is the rule?” but also “who administers it, which document controls it, and when might it change?” That distinction prevents an accurate general explanation from becoming wrong advice in a particular election, chamber or policy setting.

Evidence review

What the bill proposes

The Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2026 makes three categories of changes to Australia's financial crime laws. It is a government bill introduced in the House of Representatives on 12 March 2026 under the Home Affairs portfolio.

The first and most operationally significant change gives the AUSTRAC CEO new powers to restrict or prohibit reporting entities from using specified high-risk mechanisms to provide designated services. This is a targeted regulatory power — it allows AUSTRAC to respond to emerging risks without waiting for legislative amendment, by directing entities to stop using particular channels, products, or methods that pose unacceptable money laundering or terrorism financing risks.

The second change updates the definition of 'financing of terrorism' in the Act to reference new offences for financing a state or terrorist organisation. This reflects the evolution of terrorism financing typologies and ensures the domestic AML/CTF framework aligns with Australia's international obligations under the Financial Action Task Force (FATF) standards.

The third category consists of technical amendments to improve the clarity and operation of the legislation. These typically address drafting inconsistencies, update cross-references, and refine procedural provisions without changing the substantive obligations on reporting entities.

Evidence review

AUSTRAC and Australia's AML/CTF framework

AUSTRAC is Australia's financial intelligence unit and anti-money laundering regulator. It was established under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006, which imposes obligations on 'reporting entities' — banks, casinos, remittance providers, digital currency exchanges, bullion dealers, and other businesses at risk of being used for money laundering or terrorism financing.

Reporting entities must enrol with AUSTRAC, conduct customer due diligence, implement AML/CTF programmes, report suspicious matters and threshold transactions, and comply with record-keeping requirements. AUSTRAC has enforcement powers including the ability to issue infringement notices, accept enforceable undertakings, and seek civil penalty orders from the Federal Court.

The 2006 Act was a major reform of Australia's financial crime framework, implementing the FATF's 40 Recommendations. It has been amended several times, most notably in 2017 to regulate digital currency exchanges and in 2024 to extend obligations to 'tranche-two' entities including lawyers, accountants, and real estate agents.

Evidence review

The new high-risk mechanism restriction power

The power for the AUSTRAC CEO to restrict or prohibit reporting entities from using high-risk mechanisms represents a new regulatory tool. Currently, AUSTRAC can set rules by legislative instrument and take enforcement action for non-compliance, but it cannot issue a direct prohibition on the use of specific services or channels without going through a rule-making process.

This new power is intended to allow faster regulatory response to emerging risks. For example, if a particular payment channel, correspondent banking relationship, or digital currency service is identified as being systematically exploited for money laundering, AUSTRAC could direct reporting entities to cease or limit their use of that mechanism while broader regulatory or legislative responses are developed.

The exercise of this power is likely to be subject to procedural safeguards, such as requirements for the CEO to have reasonable grounds, to provide notice and reasons to affected entities, and to afford an opportunity to be heard. The exact safeguards would be detailed in the bill's operative clauses and the Explanatory Memorandum.

Evidence review

Current parliamentary status and next steps

The bill was introduced in the House of Representatives on 12 March 2026 and is currently before the House. As a government bill, it has a higher likelihood of passage than a private member's bill, though the government must still secure support in both chambers.

The bill's progress may depend on whether it is referred to a parliamentary committee for inquiry, whether amendments are proposed, and whether the Senate — where the government may not hold a majority — supports its passage. The Parliamentary Joint Committee on Law Enforcement or the Senate Legal and Constitutional Affairs Legislation Committee may examine the bill.

Even if passed, the new AUSTRAC powers would require implementation through AUSTRAC rules and guidance, industry consultation, and transition periods for affected reporting entities to adjust their systems and procedures.

Evidence review

Implications and open questions

The bill raises several practical and legal questions. How broadly or narrowly will 'high-risk mechanisms' be defined? What criteria will the AUSTRAC CEO apply in determining that a mechanism poses unacceptable risk? What appeal or review rights will affected reporting entities have? And how will the new power interact with AUSTRAC's existing regulatory toolkit?

The anti-money laundering community and reporting entities will closely examine the bill's text for answers to these questions. The Explanatory Memorandum should provide the government's intended interpretation and examples of when the new power might be used.

OzPolitics will update this review when the bill progresses, committee reports are published, or substantive amendments are proposed. As with all bill reviews, the bill should not be treated as enacted law until it has passed both Houses and received Royal Assent.

Common questions

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