IMPORTANT CHANGES TO IDENTITY VERIFICATION: WHAT YOU NEED TO KNOW

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We are writing to inform you of important changes to Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) laws that affect many accounting firms from 1 July 2026. These reforms are administered by AUSTRAC and are designed to help prevent financial crime and protect the integrity of Australia’s financial system
 
What is Anti-Money Laundering (AML)?
Money laundering is the process of disguising funds obtained through illegal activities so they appear to come from legitimate sources. AML laws are designed to prevent criminals from using businesses and professional services to move, conceal, or benefit from illicit funds. These laws also help combat fraud, organised crime, and the financing of terrorism.
 
How does AML work?
AML regulations require businesses such as accounting firms to take reasonable steps to understand who their clients are, the nature of the services being provided, and the risks associated with those services. This involves:

  • Verifying the identity of clients and, where applicable, beneficial owners and controlling parties.
  • Understanding the purpose and nature of the client relationship.
  • Assessing and managing potential money laundering or terrorism financing risks.
  • Keeping client information up to date.
  • Monitoring for unusual or suspicious activities and complying with any reporting obligations required by law.

 
What are HYD Advisory’s legal obligations?
Under AML/CTF legislation, accounting firms providing designated services are required to:

  • Conduct client identification and verification procedures before providing certain services.
  • Understand the ownership and control structure of entities, trusts, partnerships, and other organisations.
  • Assess and document money laundering and terrorism financing risks associated with clients and engagements.
  • Maintain records of identification and verification information.
  • Implement internal AML/CTF policies, procedures, and staff training.
  • Conduct ongoing customer due diligence and keep client information current.
  • Report certain transactions or suspicious matters to the relevant regulatory authorities where required by law.

These obligations apply to all clients and are a regulatory requirement rather than a reflection on any individual client or business.
 

What do you need to do?
To meet our AML obligations, we may request additional information and documentation, including:

  • Proof of identity and address.
  • Details of directors, shareholders, trustees, beneficiaries, or beneficial owners.
  • Information about your business activities and ownership structure.
  • Information regarding the source of funds or source of wealth where relevant.
  • Updated information from time to time to ensure our records remain accurate and current.

In some circumstances, we may be unable to commence or continue certain services until the required verification information has been obtained.
 
We appreciate that these requests may require some additional time and effort, however, these measures help us meet our legal and professional obligations while continuing to provide services to you in a secure and compliant manner.

Any information provided will be treated confidentially and managed in accordance with our privacy obligations.

If you have any questions or require assistance in navigating these changes, please do not hesitate to contact our office on (02) 8543 6800.