Here is our policy for businesses wanting an exemption from, or modification to their obligations under the AML/CTF Act. 

On this page

• Policy objectives
• Types of exemptions and modifications
• AUSTRAC's approach to exemptions and modifications
• What we consider in assessing applications
• Decisions
• Expectations

Policy objectives

The Australian Government and AUSTRAC are committed to protecting the financial system and the community from serious and organised crime. 

We expect all businesses to comply with their responsibilities under the AML/CTF Act. There will be limited circumstances in which we may grant an exemption from or modification to your obligations. 

The AUSTRAC CEO or their delegate makes decisions on these applications. 

Types of exemptions and modifications

There are two types:

1. An exemption made through AML/CTF Rules under section 247 of the AML/CTF Act. This will apply to all reporting entities and/or designated services that fit the criteria. 
2. An exemption or modification specifically for you, under section 248 of the AML/CTF Act. 

AUSTRAC's approach to exemptions and modifications

We have a risk-based approach to achieving our regulatory objectives. 

An application will only be successful if the AUSTRAC CEO is satisfied that:

• the exemption or modification is required
• the associated money laundering and terrorism financing (ML/TF) risks are low
• it is appropriate in all of the circumstances to grant the application.

This means two separate applications for exemptions from the same parts of the law may not be treated in the same way. 

What we consider in assessing applications

The CEO must consider factors including: 

• if the exemption would create a risk to the effective operation of the AML/CTF regime
• if the exemption would affect the financial system’s integrity or effectiveness
• the nature and extent of the exemption, including the impact on regulatory objectives of the Act including reducing any unnecessary burden on the regulated entity
• if granting the exemption would be consistent with the intent and purpose of the AML/CTF Act and Rules
• the risk profile of the applicant, and if an exemption would increase risks to the financial system or public interest 
• the applicant’s customer types, including any politically exposed persons
• the types of designated services the applicant provides
• how the applicant delivers their services
• any foreign jurisdictions the applicant deals with
• issues of competitive neutrality (if the exemption would create an unfair advantage for the applicant or disadvantage to others)
• any relevant Financial Action Task Force (FATF) recommendations and United Nations conventions and resolutions.

We must also consult with and consider comments by:

• reporting entities or their representatives
• partner agencies 
• the Privacy Commissioner on matters relating to privacy functions.

We may also consider any ministerial directions or policy principles given under the AML/CTF Act.

Decisions

We can:

• grant the application, with or without conditions (failing to comply with the conditions is a civil penalty offence)
• request the applicant to provide more information
• discontinue the application if a request for further information is not supplied within a reasonable time
• refuse the application.

We do not have to provide reasons for our decisions. 

If an application under section 247 is successful, we will publish draft AML/CTF Rules on our website for comment. They are also subject to parliamentary scrutiny and may be disallowed.

Expectations

The exemption process is not a way for businesses to avoid obligations or reduce the ordinary costs of compliance. 

AUSTRAC cannot provide advice or interpret how the AML/CTF Act applies to specific businesses or situations. 

You can expect that AUSTRAC will:

• exercise the power to grant or refuse an exemption or modification consistent with the intent and purpose of the AML/CTF Act;
• assess each application on a case-by-case basis; 
• acknowledge receiving your application;
• ask for more information if required to determine the application;
• inform you in writing of the outcome;
• comply with the provisions in the AML/CTF Act; and
• review this policy regularly to ensure it remains current.

We expect you to:

• get legal advice as needed to understand how the AML/CTF Act and Rules apply to you;
• submit completed application forms (Word, 163 KB) as early as possible;
• understand and plan your business operations to comply with your obligations under the AML/CTF Act;
• make applications in good faith;
• let us know of any non-compliance that could affect your application;
• be aware of your obligations and plan operations on the basis that you will comply with them, regardless of making an application; and
• notify us in writing of any changes to your circumstances which may affect any current application, or existing exemption or modification.

Further information

AUSTRAC’s contact centre can help answer general questions about your AML/CTF obligations.

The content on this website is general and is not legal advice. Before you make a decision or take a particular action based on the content on this website, you should check its accuracy, completeness, currency and relevance for your purposes. You may wish to seek independent professional advice.

Related pages

• How to apply for exemptions and modifications