Important Update: AML/CTF Reforms and Background Screening Requirements in Australia
Find out more about what Australia's new reforms, introduced under the Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024, mean for employers in Australia and their background screening programmes.
Australia's anti-money laundering (AML) regulations are being updated this year, and we want to ensure you understand how these changes may impact your background screening programme.
What's Changing
The reforms introduced under the Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024 and the new AML/CTF Rules published by AUSTRAC place a stronger emphasis on governance, accountability, and demonstrable effectiveness of AML/CTF programmes.
Reporting entities will be required to appoint AML/CTF compliance officers who satisfy formal “fit and proper” standards (including considerations of integrity, competence, past misconduct, financial soundness, and conflicts of interest) and who must be Australian residents. Additionally, they must ensure that oversight roles are held by competent, suitably vetted individuals.
Screening Expectations
In line with the guidance supporting the reforms, AUSTRAC expects entities to adopt risk-based screening practices for individuals responsible for designing, overseeing, and managing AML/CTF compliance. This means that businesses in Australia may wish to apply enhanced or regulated screening packages for roles with senior AML responsibilities, such as those who design or oversee AML programs, make risk and reporting decisions, or serve as the AML/CTF compliance officer.
Under the reforms, a "fit and proper" assessment typically includes:
Professional competence and suitability – employment, education, and professional qualifications
Integrity and ethical conduct – media checks, Global Sanctions and Enforcement Checks (GSEC), in-depth/regulated references, fit & proper questionnaire, and ID verification
Criminal and regulatory history – Nationally Coordinated Criminal History Check via National Police Checking Service (NPCS) and International Financial Regulatory Body Search (IFRB)
Financial/risk considerations – Australian Financial Business Interests – Basic Credit (AFBI) and bankruptcy checks
Conflicts of interest – directorship searches
Given AUSTRAC’s Australian residency requirement, it may also be appropriate to include address verification and right-to-work checks to support the eligibility criteria for certain regulated roles.
Next Steps
We recommend establishing a dedicated regulated screening package for individuals holding senior AML responsibilities, particularly those responsible for AML programme governance, decision-making, and statutory compliance oversight. This can be implemented ahead of the first major compliance deadline for existing reporting entities on 31 March 2026.
To find out more about these reforms, see the following links below:
If you're a HireRight customer and would like to discuss how these changes affect your screening programme or need assistance creating any new screening packages, please contact your account manager or HireRight Customer Services.
If you are currently evaluating background screening providers, you can find out more about HireRight in Australia here.
Release Date: February 20, 2026
Caroline Smith
Caroline is a UK qualified lawyer with over 18 years’ experience and currently serves as HireRight’s Deputy General Counsel for the EMEA and APAC regions. When not “lawyering” or writing blogs, Caroline can be found striking yoga poses in remote locations such as Mongolia and Bhutan.