By Fiona Halsey
From 1 July 2026, every reporting entity under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) must appoint an AML CTF Compliance Officer. This position will sit at the heart of an organisation’s compliance framework.
Who can be an AML CTF Officer?
The Act and draft rules make clear that the AML CTF Officer must be a fit and proper person. That will require consideration of:
• honesty, integrity, and reputation
• any history of criminal conduct or civil penalties
• competence and capability to discharge the role, and
• financial soundness.
At the time of writing, there are no stated prior educational qualifications, or any requirement for experience in any aspect of anti-money laundering or counter terrorism financing. It is expected that the Officer will undertake suitable and necessary training for the role, and it seems likely AUSTRAC will make that training available.
The role should have sufficient authority, independence, and access to information and resources to perform effectively. For small firms, this may mean a principal takes on the role. For larger firms, it may be a senior compliance manager. It seems unlikely that, say, a sole practitioner could appoint their secretary to the role, because the secretary would lack the required independence.
The AML CTF Officer must be employed or engaged within the reporting entity’s management or control structure. That suggests the person may be a contractor, although they must be part of the management structure. It seems likely that a range of individuals could offer the service of being an AML CTF Officer for hire. While contractors may be eligible, firms should carefully assess whether they can meet the independence and authority requirements in practice. The practical implications of a contractor holding this role will only be known over time.
Importance of AML CTF Officer being appointed as required
The structure of the Act is such that every day a reporting entity does not have an AML CTF Officer when the entity must is a separate contravention. This means if the AML CTF Officer is not appointed for a year, there will be 365 contraventions. Each contravention is a civil penalty contravention, with a separate monetary penalty.
Core obligations of the AML CTF Officer
The AML CTF Officer’s responsibilities are extensive and sit at the centre of the reporting entity’s program. Key obligations include:
(a) to oversee and coordinate the reporting entity’s day-to-day compliance with this Act, the regulations and the AML CTF Rules; and
(b) to oversee and coordinate the effective operation of and compliance with the reporting entity’s AML CTF policies; and
(c) to communicate, on behalf of the reporting entity, with AUSTRAC; and
(d) to do anything incidental to or conducive to the performance of any of the above functions; and
(e) any other functions specified in the AML CTF Rules.
These obligations mean the Officer will effectively serve as the bridge between day-to-day operations and AUSTRAC’s regulatory oversight.
Liability and personal risk
The AML CTF Officer is not simply an administrator. While the reporting entity itself bears primary liability for breaches of the Act, AUSTRAC and the courts may examine the actions (or inactions) of the Officer when considering whether the entity has tried to comply.
Many difficulties the Officer will face will centre on reporting. The AML CTF Officer will be responsible for reports to AUSTRAC. An annual report must be filed. Presumably, the prescribed annual report form will include a statement to the effect that suspicious matter reports have been lodged with AUSTRAC when required.
In broad terms, suspicious matter reports must be lodged with AUSTRAC when a reporting entity is about to provide a designated service or receives a request to provide a designated service, and certain matters come to their attention which form the basis of a relevant suspicion.
This duty is non-negotiable (although legal professional privilege is specifically preserved).
In practice, partners or other personnel may resist filing a suspicious matter report for fear of damaging client relationships or losing business. The AML CTF Officer, however, is legally bound to ensure the report is submitted (subject to legal professional privilege). The legislation anticipates this tension, requiring independence. Presumably, failure to support the Officer in making these difficult calls will expose the firm to significant liability. However, that does not mean the AML CTF Officer will not be under pressure at those times.
Practical implications
For many firms, appointing and supporting an AML CTF Officer will require careful preparation, which would likely include:
• Selecting the right person – someone senior enough to command respect, but also with the technical ability to manage complex compliance obligations
• Allocating resources – ensuring adequate staff, systems, and training budgets
• Embedding independence – creating governance structures that allow the Officer to escalate concerns without interference
• Managing conflicts – establishing clear internal policies about the Officer’s authority to make reporting decisions, even against business pressures.
The sole practitioner
Many sole practitioners are asking – who will be the AML CTF Officer? The answer is most likely the sole practitioner themselves. Other possibilities could be a senior employed person or a contractor, if the requirements can be satisfied by those people.
Conclusion
From July 2026, the AML CTF Officer will become a cornerstone of Australia’s anti-money laundering framework. The role carries both opportunity – to lead cultural change and build strong compliance systems – and risk, given the personal accountability involved.
This article is part of a series on AML CTF. Do you have a particular topic or question on AML CTF you would like Fiona to cover? Email us at brief@lawsocietywa.asn.au.
This is a broad summary of the law and has been condensed for readability. You must consider the law yourself before making decisions.
