What Is A Money Laundering Risk Assessment?
Money Laundering Risk Assessment
The observations and findings set out in a Money Laundering Risk Assessment Report will drive the policies, procedures and controls of the AML/CTF Program. Thus, a firm-wide money laundering/terrorism financing (ML/TF) risk assessment must adopt a risk-based model that reasonably informs of inherent ML/TF risks.
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AUSTRAC Reforms Require a Risk-Based Money Laundering Risk Assessment Report
From 31 March 2026, Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) laws move away from a “tick-box” compliance model toward a risk-based, outcomes-oriented framework.
This ML/TF Reforms being adopted by AUSTRAC affects how businesses captured under AML/CTF laws must assess, document, manage, and mitigate money laundering, terrorism financing and proliferation financing risks (collectively “ML/TF/PF risks”).
AUSTRAC’s enforcement powers allow it to compel compliance with AML/CTF laws.
Failing to operate with a documented Money Laundering Risk Assessment report can result in AUSTRAC taking enforcement action. This may include issuing infringement notices, remedial directions (requiring specific fixes), and accepting binding enforceable undertakings.
Document A Formal Money Laundering Risk Assessment Report
Businesses that are captured under Australia’s AML/CTF laws are referred to as ‘Reporting Entities’.
All Reporting Entities must identify and assess the ML/TF/PF risks they reasonably face in providing their ML/TF captured activity (referred to as ‘designated services’).
A Money Laundering Risk Assessment Report (ML/TF Risk Report) should consider risks arising from:
– Customers and customer types
– Services or products you provide
– How services are delivered (e.g., online/offline channels)
– Geographic factors — jurisdictions your business interacts with.
Find out more information about Australia’s AML/CTF Program and ML/TF regulatory expectation under the reform commencing 31 March 2026 for existing reporting entities.
Money Laundering Risk Assessment Reports (ML/TF risk assessments) must be:
– Documented (written and defensible)
– Used to design policies, systems and controls
– Tied directly to how a reporting entity manages it’s ML/TF risks through activities such as, due diligence, monitoring, reporting. AUSTRAC
The Money Laundering Risk Assessment Report and AML/CTF program must be proportionate to the nature, size and complexity of the business entity.
How Can AML360™ Assist with your Money Laundering Risk Assessment Report?
AML360™ is a risk-management and reporting solution designed to meet money laundering/terrorism financing risk-based principles.
Subject matter expertise including risk-based principles are embedded into the AML360™ reporting framework.
Users simply login to their account or complete an online form.
The regulatory technology performs by automating the risk-evaluation report. Narrations and a risk-rating is provided to easily guide businesses on ML/TF risk vulnerabilities.
