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AUSTRAC issues guidance on new compulsory examination powers

Regulator outlines how section 172A notices will be used under expanded AML/CTF reforms.

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Key Points
Section 172A powers allow AUSTRAC to require attendance, questioning and document production
Regulator emphasises examinations are not routine or punitive
Changes aim to strengthen Australia’s ability to detect and disrupt money laundering

AUSTRAC has released formal guidance explaining how it will exercise its new compulsory examination powers, introduced through the Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024. The powers, contained in section 172A of the Act, came into effect in 2025 and allow AUSTRAC to issue notices requiring individuals to attend an examination, answer questions and provide documents.

AUSTRAC CEO Brendan Thomas said the guidance is intended to set clear expectations for businesses and the community about when compulsory examinations may occur and how they will be conducted. He stressed that the agency will use these powers “carefully and responsibly”, and only in circumstances where an examination is necessary to clarify information or better understand how a reporting entity is managing money-laundering risks.

The regulator highlighted that compulsory examinations are neither routine nor punitive, and receiving a section 172A notice does not imply wrongdoing. Instead, AUSTRAC views the power as an important tool to gather accurate information, inform regulatory decisions and identify emerging risks in the financial system.

The guidance outlines what a section 172A notice contains, what to expect during an examination, the role of the examiner and how legal representatives may assist. AUSTRAC states it has incorporated witness welfare considerations into its framework, confirming that individuals may obtain legal representation and discuss the notice with a health professional.

The reforms expand AUSTRAC’s information-gathering ability as part of broader national efforts to curb money laundering and criminal misuse of the financial system. By clarifying how compulsory examinations will operate, AUSTRAC aims to provide transparency for legitimate businesses while enhancing its capacity to disrupt illicit financial activity.

 

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Serious and organised crime in Australia is estimated to generate around $38bn annually, all of which must be laundered to be used within the legitimate economy

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