Customer due diligence (KYC) on every customer
Identify and verify every customer (and beneficial owner) before providing a designated service.
Who must comply
All AUSTRAC reporting entities.
What triggers it
Onboarding a customer for a designated service (in a brokered real estate sale: both the buyer and the seller).
When due
Before providing the designated service. Ongoing for customer relationships.
Evidence required
KYC records (identity documents, beneficial ownership), PEP/sanctions screening evidence, EDD documentation.
Max penalty
Each unverified customer can be a separate contravention — up to $36.4M (body corporate) or $7.28M (individual), maximum per contravention
Who must comply with this? The applicability test by industry, business structure and size.
Summary
Reporting entities must collect and verify customer identification information before providing a designated service. For non-individuals, beneficial owners (≥25% control or ownership) must be identified. Enhanced due diligence applies to high-risk customers including PEPs, complex structures, and high-risk jurisdictions. Simplified due diligence is available for limited low-risk categories. Who the 'customer' is comes from the designated-service table in s 6 of the AML/CTF Act — for a real estate agent brokering a sale, purchase or transfer (table 5, item 1) the customers are BOTH the seller and the buyer, even where the agent acts only for the vendor (AUSTRAC real estate guidance). Real estate CDD may be delayed to the earlier of 28 days after exchange or 3 days before settlement (Rules r 6-32(4)).
Enforced by
Source legislation
Topics
Related
- CWLTHMaintain a written AML/CTF programEvery reporting entity needs a documented AML/CTF program — an ML/TF risk assessment plus AML/CTF policies.
- CWLTHBeneficial ownership transparency (Tranche 3 — under consultation)Proposed beneficial ownership register for unlisted companies and trusts — consultation through 2024-2025; commencement TBD.
- CWLTHSuspicious matter, threshold, and IFTI reporting to AUSTRACLodge SMRs, TTRs ($10K+ cash), and IFTI reports via AUSTRAC Online.
- CWLTHEnrol with AUSTRAC as a reporting entityTranche 2 entities must enrol with AUSTRAC within 28 days of first providing a designated service (29 July 2026 for services from 1 July 2026).
- CWLTHDesignate an AML/CTF Compliance OfficerReporting entities must designate an eligible AML/CTF compliance officer at management level and notify AUSTRAC.
- CWLTHDetect + enhance due diligence on Domestic + Foreign PEPsAML/CTF Rules require detection + EDD on Politically Exposed Persons (foreign + domestic + international organisation).
Reading
Frequently asked questions
- Who must comply with Customer due diligence (KYC) on every customer?
- All AUSTRAC reporting entities.
- What triggers Customer due diligence (KYC) on every customer?
- Onboarding a customer for a designated service (in a brokered real estate sale: both the buyer and the seller).
- When is Customer due diligence (KYC) on every customer due?
- Before providing the designated service. Ongoing for customer relationships.
- What is the maximum penalty for Customer due diligence (KYC) on every customer?
- Each unverified customer can be a separate contravention — up to $36.4M (body corporate) or $7.28M (individual), maximum per contravention
- What evidence is required for Customer due diligence (KYC) on every customer?
- KYC records (identity documents, beneficial ownership), PEP/sanctions screening evidence, EDD documentation.
Source: https://austrac.gov.au/business/core-guidance/customer-identification-and-verification. Rules Mate is not a law firm. Always verify against the live regulator source before acting.