FAQs: Appointing an AML/CTF Compliance Officer in the new AML/CTF regime

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1. What is the role of an AML/CTF Compliance Officer (AMLCO)?

A: The Compliance Officer oversees and coordinates day-to-day compliance with the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (the Act), associated Rules and regulations on behalf of the business. They also communicate with AUSTRAC on the business’s behalf.

Typically, the role of an AMLCO will also extend to Sanctions compliance. If the business has fraud, anti-bribery, FATCA etc frameworks/compliances, subject to the business context and operating model nuances, these functions may also be part of the AMLCO responsibilities.

2. What are the key responsibilities of the AMLCO?

A: They must:

• ensure the business has put in place appropriate AML/CTF compliance framework and they are operating effectively;

• report (at least annually) to the governing body on compliance and risk-management (best practice will be quarterly reporting);

• have sufficient authority, independence, resources and expertise to carry out the role properly.

  
  

3. When must a business appoint an AMLCO?

A: The updated AML/CTF legislation makes it compulsory for reporting entities to designate a ‘fit and proper’ AML/ CTF Compliance Officer.

In case of a new business or a newly regulated business (eg: a tranche 2 entity), such business must appoint / designate an AMLCO within 28 days of beginning to provide designated services. The reporting entity must notify AUSTRAC of the appointment within 14 days.

4. What eligibility requirements apply to the AMLCO?

A: An individual proposed to be designated or appointed as an AMLCO must:

• be employed or engaged at management level in the business;

• if the business has a permanent establishment in Australia, be a resident of Australia;

• be a “fit and proper person” (competent, honest, no serious offence history, no major conflicts of interest) for the role.

5. What does 'management level' mean in this context?

A: For larger businesses, it might be someone like a risk‐manager, operations manager or general manager overseeing the AML/CTF operations. For smaller businesses, it could be the business owner, director or someone managing the broader operations.  Essentially, the person should carry the necessary authority.

6.Who is a 'fit and proper person' for the AMLCO role?

A: The ‘fit and proper’ should signify that the proposed AMLCO has:

• the necessary competence, skills, knowledge, diligence and sound judgement,

• good character, honesty and integrity,

• no record of any serious offences, adverse regulatory findings, or bankruptcy/insolvency event,

• no conflict of interest that materially risks their ability to act properly.

The Management / Board should expressly consider their satisfaction with the candidate as fit and proper. Further, the fit and proper criteria must be periodically reassessed to ensure that the AMLCO continues to be fit and proper.

7. How often must the AMLCO report to the governing body, and what must the report cover?

The AMLCO must provide a report on AML/CTF matters to the governing body at least once every 12 months, covering:

• the business’s compliance with its AML/CTF policies,

• how those policies adequately manage and mitigate the ML/TF/PF risks the business reasonably faces,

• the business’s compliance with the Act, Rules and regulations.

However, keeping best practice in view, the reporting must be quarterly or half yearly (depending on the size, nature and context of the business).

8. What happens if the AMLCO becomes ineligible to act as such, or resigns / leaves?

A: If the person becomes ineligible or leaves the business, the business must appoint a replacement and notify AUSTRAC.

9. Can the AMLCO delegate / outsource their functions or activities entirely?

A: The guidance says the AMLCO does not need to personally perform all tasks but must oversee and coordinate day-to-day compliance. But they may not simply delegate entirely without oversight.

10. What records must a business maintain about its AMLCO appointment?

A: The business must keep records showing:

• the name of the appointed person;

• when they acted in the role;

• how they meet the eligibility requirements (e.g., checks, references);

• evidence of what was considered in determining eligibility (e.g., credit checks, police checks).

 

Regulatory Resources:

AUSTRAC Guidance- click here

26 November 2025

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Compliense Advisors is an AML/CTF and FinCrime compliance and risk management advisory firm.

Our experience includes implementing legislative changes; undertaking ML/TF risk assessment; setting up, implementing, uplifting AML/CTF program; and advising on AML/CTF and FinCrime compliance and risk matters.

The article above is for general awareness and informational purposes only. Please carefully evaluate your circumstances, and seek professional advice for your specific needs. You are responsible for your compliance obligations, and for any action taken or omitted. We are not a law firm, and do not provide legal advice.

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