CA ANZ Backs Graduated AML/CFT Infringement Fees in Australia
Chartered Accountants ANZ has lodged a formal submission on Australia's proposed AML/CFT infringement fee framework, signalling clear support for a tiered, proportionate enforcement model. The body's position: fee levels should reflect the seriousness of the conduct, minor administrative failures should attract a chance to self-correct before a notice is issued, and the supervisor should publish a transparent enforcement policy so that regulated entities, including accounting firms and digital asset businesses, understand exactly where the boundaries lie. For practices that rely on crypto accounting software to meet their AML recordkeeping obligations, the architecture of this regime matters directly.
Background: Why Australia Is Redesigning Its AML/CFT Enforcement Tools
Australia's AML/CFT framework has been undergoing significant reform in recent years. The introduction of an infringement notice regime is part of that broader effort to give the supervisor a fuller toolkit, one that sits between informal education and formal court-based prosecution. Infringement notices are fixed-penalty instruments: they allow a regulator to impose a monetary penalty administratively, without the time and cost of litigation, while still giving the recipient the option to contest the notice in court.
The design of the fee schedule attached to those notices is therefore consequential. Set fees too low and the regime lacks deterrent force. Set them too high and the instrument becomes disproportionate for minor procedural breaches, creating a chilling effect that is particularly acute for smaller reporting entities and professional service firms.
The Two Options Under Consultation
The consultation presented at least two fee-level options. CA ANZ's submission explicitly endorses option two, on the grounds that it is more proportionate to the seriousness of the conduct and aligns with fee levels seen in comparable infringement regimes elsewhere in Australian law. While the source document does not reproduce the specific dollar figures attached to each option, the submission's reasoning makes clear that the preferred option reflects graduated scaling rather than a flat penalty applied regardless of circumstance.
What CA ANZ's Submission Actually Argues
The submission rests on three interlocking positions, each of which has practical consequences for how the regime will operate day to day.
Support for a Graduated and Proportionate Regime
CA ANZ signals clear support for the introduction of the infringement regime itself. This is not a submission opposing the policy direction. The body accepts that a graduated enforcement ladder, running from education through warnings, infringement notices, and ultimately stronger regulatory action, is appropriate for an AML/CFT context. The question the submission addresses is not whether to have such a regime but how to calibrate it.
A Correction Opportunity Before Notice Is Issued
One of the submission's most practically significant positions is that entities should ordinarily have an opportunity to correct minor administrative breaches before an infringement notice is issued. The word "ordinarily" is doing important work here. CA ANZ is not arguing for a blanket right to remediate. The submission carves out deliberate conduct and repeated non-compliance as circumstances where the correction opportunity would be inappropriate. But for first-time, inadvertent, administrative failures, the expectation is that the supervisor should prompt remediation before escalating to a penalty.
This mirrors the approach taken in a number of other Australian regulatory contexts, where graduated response policies distinguish clearly between systemic failure and isolated process error. For accounting firms managing AML/CFT compliance across a portfolio of clients, this distinction is material: a single missed customer due diligence update is a very different risk profile from a pattern of wilful non-reporting.
A Published Enforcement Policy
The third plank of the submission is a call for the supervisor to publish an enforcement policy that sets out when each tool in the toolkit will be deployed. CA ANZ argues that the operational approach should remain responsive to circumstances, but that responsiveness needs to be bounded by published criteria. Regulated entities, their auditors, and their legal advisers need to be able to assess risk against a known framework, not guess at regulator discretion.
A published enforcement policy serves two functions simultaneously. It disciplines the regulator's own decision-making, creating accountability for departures from stated practice. And it enables compliance teams to build internal escalation frameworks that mirror the regulator's own hierarchy, so that when a breach is identified internally, the firm already knows what remediation steps are expected before any external engagement becomes necessary.
Implications for Accounting Firms and Auditors
Accounting practices are reporting entities under Australia's AML/CFT legislation, and the profession has been subject to heightened scrutiny as regulators globally have focused on the role of professional service firms in financial crime risk. The CA ANZ submission is partly a professional-body intervention to ensure that the infringement regime, when it lands, is designed in a way that treats inadvertent administrative non-compliance differently from deliberate evasion.
Fee Proportionality and Practice Risk
For a mid-size accounting firm, even a modest infringement fee carries reputational cost well beyond the monetary value of the penalty. The submission's endorsement of option two, on proportionality grounds, is therefore directly aligned with the interests of firms for whom an overpitched flat fee would represent a disproportionate sanction for a process error that caused no actual harm to the integrity of the financial system.
Practices that have invested in digital asset accounting software with integrated AML workflow modules are better placed to demonstrate a documented compliance process, which is precisely the kind of evidence that supports a remediation-first response when the supervisor identifies a gap. Software that produces audit trails of customer due diligence steps, transaction monitoring reviews, and suspicious matter reporting decisions creates the evidentiary record that distinguishes an inadvertent breach from a systemic failure.
What Auditors Need to Factor In
External auditors reviewing the AML/CFT compliance frameworks of reporting entities will need to assess whether the entity's internal policies align with the enforcement ladder once a published enforcement policy exists. At present, that published policy does not yet exist, which means auditors are working without a regulatory benchmark. When the policy is published, it will become a direct reference point in AML compliance audits: does the entity's internal escalation framework map to the regulator's stated expectations? Are the documented thresholds for self-reporting consistent with the correction opportunity the regulator is prepared to extend?
For firms using crypto bookkeeping software to manage digital asset client portfolios, the audit trail generated by that software will be a central piece of evidence in any AML/CFT examination. Gaps in that trail, whether caused by software limitations, configuration errors, or procedural failures, are exactly the kind of administrative breach that the CA ANZ submission is seeking to shield from immediate infringement notice treatment.
Implications for Digital Asset Businesses
Digital asset exchanges, custodians, and other virtual asset service providers operating in Australia are squarely within the AML/CFT reporting entity perimeter. The infringement regime, once enacted, will apply to them as it applies to any other reporting entity. The CA ANZ submission's arguments about proportionality and correction opportunity are at least as relevant to a crypto exchange navigating a compliance process gap as they are to a traditional accounting practice.
Calibrating Internal Compliance Investment
One of the practical consequences of a well-designed infringement regime is that it gives compliance teams a clearer basis for calibrating internal investment. If the fee schedule is proportionate and the enforcement policy is published, a digital asset business can model the expected cost of a minor administrative breach against the cost of the additional controls required to prevent it. That is not an argument for accepting preventable non-compliance. It is an argument for rational risk-based compliance investment, which is precisely what the AML/CFT framework is designed to encourage.
Businesses that have not yet documented their transaction monitoring calibration decisions, customer risk rating methodologies, or suspicious matter reporting thresholds in a retrievable format are carrying unnecessary exposure. An infringement regime with a correction opportunity built in is more forgiving of process gaps than one that moves directly to a penalty. But the correction opportunity still requires the entity to demonstrate that the breach was genuinely inadvertent and that remediation is credible.
Cross-Jurisdictional Context
Australia is not the only jurisdiction currently refining the financial penalty side of its AML/CFT regime. For context on how other anglophone jurisdictions are approaching similar questions, the article covering how HMRC structures its money laundering registration fees illustrates the range of approaches available to regulators designing proportionate cost-recovery and penalty mechanisms. Separately, the pressures that AML compliance frameworks create for financial institutions transacting in digital assets are visible in the data on what blocked crypto transfers reveal about AML pressure on banks, a dynamic that Australian institutions are experiencing as well.
What Firms Should Do Before the Regime Is Finalised
The consultation process is ongoing and the regime is not yet law. But the direction of travel is clear enough that firms should be taking preparatory steps now rather than waiting for the final rules to be published.
Practical Next Steps
Conduct a gap analysis of your current AML/CFT procedures against the likely enforcement ladder. Identify which of your processes, if they failed, would fall into the minor administrative breach category and which would be harder to characterise that way. For each gap in the minor breach category, document what a credible remediation looks like, because the correction opportunity is only useful if you can execute on it quickly and demonstrate that you have done so.
Review the audit trail your current systems generate. Whether you are using purpose-built compliance software or a broader crypto accounting platform with AML modules, the output of that system is the primary evidentiary record in any regulatory examination. Ensure that the trail is complete, timestamped, and accessible in a format that a regulator or auditor can interrogate without requiring significant manual reconstruction.
Finally, watch for the publication of the supervisor's enforcement policy. CA ANZ has explicitly called for that policy to exist. When it is published, update your internal compliance framework to mirror its language and thresholds. The alignment between your internal escalation process and the regulator's published approach is the clearest demonstration that your compliance programme is operating as intended.
Frequently Asked Questions
What is an AML/CFT infringement notice?
An infringement notice is an administrative instrument that allows a regulator to impose a fixed monetary penalty without initiating court proceedings. The recipient can pay the notice amount or elect to contest it before a court. Infringement regimes are designed to sit between informal warnings and formal prosecution, giving regulators a proportionate option for lower-level non-compliance.
Which entities does the Australian AML/CFT regime cover?
Australia's AML/CFT legislation covers a broad range of reporting entities, including financial institutions, remittance dealers, digital currency exchange providers, and professional service firms including accountants and lawyers in certain circumstances. The infringement regime, when enacted, will apply across this reporting entity population.
Why does CA ANZ support option two specifically?
CA ANZ's submission argues that option two is more proportionate to the seriousness of the conduct and is consistent with fee levels seen in comparable Australian infringement regimes. The submission does not reproduce the specific dollar figures, but the proportionality argument implies that option two involves graduated scaling rather than a flat fee regardless of severity.
What does the correction opportunity mean in practice for my firm?
If the CA ANZ position is accepted by the supervisor, your firm would ordinarily have a chance to remediate a minor administrative AML/CFT breach before an infringement notice is issued. This assumes the breach is not deliberate and has not occurred repeatedly. In practical terms, it means that having a documented remediation process and being able to execute on it quickly is a material compliance asset.
How does crypto accounting software interact with AML/CFT compliance obligations?
Crypto accounting software that generates comprehensive, timestamped audit trails of transaction monitoring, customer due diligence, and suspicious matter reporting decisions creates the evidentiary record that supports a finding of inadvertent rather than systemic non-compliance. When a regulator or auditor examines an AML/CFT programme, the software output is typically the primary source of documentation for those decisions.
Source: Chartered Accountants ANZ