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nid 93953
Jul 13, 2026
kgurnani@vixio.com
Australia
AUSTRAC
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1584 charsAustralia's AUSTRAC Publishes Checklist for Engaging Outsourced Service Providers
AUSTRAC has published a sample checklist designed to help entities manage risks associated with outsourcing anti-money laundering and counter-terrorism financing (AML/CTF) functions. The checklist includes suggested good practices and recommendations to support compliance with Australia's AML/CTF obligations when engaging external service providers.
The checklist addresses potential risks that arise when organisations outsource AML/CTF responsibilities to third parties. While not exhaustive, it provides a framework for entities to consider key factors during the engagement process. AUSTRAC emphasises that the checklist represents guidance on how it interprets certain Australian legislation, associated Rules, and regulations, though Australian courts retain ultimate responsibility for interpreting these laws and determining whether provisions have been contravened.
AUSTRAC notes that the examples and scenarios provided in its guidance are intended to explain its interpretation of the law but are not exhaustive and may not cover every possible scenario. The guidance provides general information and is not a substitute for legal advice. AUSTRAC acknowledges that some provisions of the law have exceptions or important qualifications, and entities must consider their particular circumstances when determining how the law applies to them.
Entities outsourcing AML/CTF functions should download and review the sample checklist (PDF, 570.68 KB) available on AUSTRAC's website. For specific questions about AML/CTF obligations, entities should contact AUSTRAC directly.
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2294 charsAustralian Transaction Reports and Analysis Centre Publishes Checklist for Engaging Outsourced Service Providers
AUSTRAC has published a sample checklist designed to help entities manage risks associated with outsourcing anti-money laundering and counter-terrorism financing (AML/CTF) functions.
The checklist includes suggested good practices and recommendations to support compliance with Australia's AML/CTF obligations when engaging external service providers. The checklist addresses potential risks that arise when organisations outsource AML/CTF responsibilities to third parties.
Before appointing a provider, businesses should:
Assess the compliance, operational and information-sharing risks created by outsourcing and confirm that they fall within the business’s risk appetite.
Conduct due diligence on the provider’s AML/CTF expertise, qualifications, resources and knowledge of the relevant industry.
Verify the provider’s claims through demonstrations, documentation, references or testimonials.
Identify legal restrictions on sharing customer or AML/CTF information and establish controls against unauthorised disclosure.
Consider obtaining legal advice.
Enter into a legally binding written agreement specifying the services, performance standards and oversight arrangements.
Include mechanisms for monitoring the provider and responding proportionately to contractual breaches.
Document these arrangements in the business’s AML/CTF program.
After appointing a provider the business should maintain active, senior-management-led oversight. Responsibilities for managing AML/CTF compliance risk and money-laundering and terrorism-financing risk should be clearly allocated.
AUSTRAC identifies several warning signs, including providers that:
Lack knowledge of the Australian AML/CTF framework or the customer’s industry.
Cannot explain how their service works, integrates with existing systems or supports specific AML/CTF obligations.
Cannot explain the limitations of their product.
Lack sufficient expertise or resources.
Cannot provide demonstrations or relevant references.
Do not understand legal restrictions on information sharing.
Provide generic, template-based products rather than tailored solutions.
Have not designed their service for Australian businesses.
Do not offer implementation support, training or updates.
Resist ongoing monitoring and oversight.