‘Do it now’: The AML/CTF deadline is coming – is your agency ready?

When tranche 2 laws come into effect, they will extend financial crime compliance obligations to real estate and conveyancing, as they will be considered “reporting entities”.

An agency’s failure to comply with its AML/CTF program policies will carry a fine of $19,600, while not registering before the cut-off date could result in daily $18,780 penalties for corporations.

Riverstone Partners CEO, Lucas McEntee, warned agents to be registered and have their reporting processes in place from the first week of June, given that many new listings will apply to the rules if they’re still on the market when the regulation starts.

“You really shouldn’t be going for the 1st of July because you’ll have to run around and do all these checks on older listings because they’ll fall into the new regulations,” he told REB.

“It’s highly unlikely that you’ll get a new listing today and have it settled by 30 June. It will probably go over just because of the settlement time.”

McEntee said if agencies left the matter any later, they were likely to face many more difficulties and administrative burden than necessary.

“Get prepared, and there’s enough time to do it, but you really should be doing it now. If you haven’t made a decision by the end of next week, it’s just going to be harder, that’s all,” he said.

Despite the tough deadline, McEntee told agencies and directors to remain calm about the new requirements, saying there were plenty of services to support them.

“Don’t be scared, be prepared, because it actually isn’t that hard and there’s a lot of free information or government information out there to get you ready for these annual regulations.”

“AML isn’t that hard. It’s just reporting, tracking, having a plan in place, having a responsible officer, understanding what suspicious activity is.”

McEntee also said the new requirements wouldn’t impact agents’ day-to-day roles as they will still be able to list and sell properties as normal, just with additional checks and balances.

“If you’ve got to train up your staff and there’s a lot of extra costs, the number one thing is to start out and go, okay, is this AML service going to be part of my workflow?

“If it is part of your workflow, there’s very little additional work, but if it’s outside of what you do every day, it’s going to cost quite a lot.”

To help businesses get prepared, McEntee stressed the importance of using technical solutions, such as digitising the Australian Transaction Reports and Analysis Centre’s (AUSTRAC) forms to keep organised and ensure their agencies were compliant.

“You can go the paper route, and there are 28 forms to fill out. There’s also more than enough technical solutions in place to automatically check if a vendor, a seller or a buyer is on a sanctions list or if there’s suspicious activity going on.”

McEntee said that the most obvious way to tell if there was suspicious activity was when someone showed up with hundreds of thousands of dollars in cash to put down a deposit.

He said that even in such a situation, agents could still go ahead with the transaction, as AUSTRAC only wanted them to report the matter.

To help with reporting duties, McEntee said paying attention to buyers was pivotal, as it meant agents were more likely to spot abnormal activity when it arose.

“Know the person you’re dealing with and know the relationship between that person and the asset – that’s the property or the cash that they’re purchasing with,” he concluded.