What the Act allows
- Civil penalties for breaches such as failing to enrol, operating without a program, failing to carry out due diligence or failing to report. Maximums run to tens of millions of dollars for a company and millions for an individual.
- Enforceable undertakings, remedial directions and infringement notices for lesser or first breaches.
- Criminal offences for tipping off and for providing a designated service without enrolment in some circumstances.
What has actually happened
AUSTRAC's headline actions have been against large institutions: penalties of AU$1.3 billion against Westpac in 2020 and AU$450 million against Crown Resorts in 2023, among others. Those cases involved systemic failures over years.
What small firms should expect
AUSTRAC has said its approach to Tranche 2 entities will start with education and guidance, with enforcement aimed at firms that ignore the regime rather than firms making a genuine effort. The realistic risk for a small practice is a compliance review that finds no program, no client identification and no records, followed by a remedial direction, and the reputational cost of that with clients and professional bodies. Professional bodies may also treat non-compliance as a conduct matter.
The cheapest protection
A program you actually adopted, client files with identification and a date, and an audit trail. Reviews go badly for firms with nothing to show, not for firms with imperfect paperwork.
Questions people ask
- Can I personally be fined?
- Yes. Individuals, including the compliance officer and principals, can face civil penalties and, for tipping off, criminal liability.
This guide is general information for accountants, bookkeepers, BAS agents, not legal advice. Check AUSTRAC's current guidance for your situation.