INDEPENDENT AML/CTF EVALUATIONS
TRUE NORTH IN INDEPENDENT EVALUATIONS
Independent AML/CTF program evaluations for Australian business captured under the Tranche 2 reforms.
REGULATORY CONTEXT
WHY INDEPENDENT EVALUATIONS
MATTER NOW
Tranche 2 Reforms
Australia's Anti-Money Laundering and Counter-Terrorism Financing Act has been extended to 'tranche two' entities. This includes lawyers, conveyancers, real estate agents and more. Program enrolment and evaluation are non-negotiable for those entities providing a designated service.
Independent Evaluation Required
Under the AML/CTF Rules, your program must be subject to independent evaluation by a party without a conflict of interest. The evaluator cannot be your program consultant, software provider, or anyone involved in the design/maintenance of your program in overall.
Penalty Exposure
Non-compliance carries significant civil (and in some circumstances criminal) penalties. AUSTRAC has demonstrated a willingness to pursue enforcement action against professional services firms.
Partner Liability
Responsible individuals within professional services firms may face personal liability for AML/CTF failures. Governance level awareness and formal evaluation are not discretionary.
The regulatory landscape is continuing to evolve. Firms that establish robust, independently verified
compliance frameworks now will be better positioned when enforcement activity increases.
OUR APPROACH
Evaluation Focussed
Bringing a wealth of experience, from law enforcement, regulatory design and AML/CTF program design. Meridian Assurance focus solely on independent program evaluations. We made the decision not to consult on program design, control implementation or staff training to ensure ongoing independence.
No Consulting
Although we have experience designing new AML/CTF programs. We do not consult on program design, remaining impartial at all times.
No Conflicts
We maintain a strict conflict of interest policy, providing documented assurance with every completed evaluation.
Defensible Findings
We are uniquely qualified, with a long history of regulatory design, law enforcement and operations management.
This is not a limitation, it's our defining advantage.
Firms can't use their compliance consultant as their evaluator as it creates a conflict that undermines
the entire purpose of the independent evaluation under the Act and Rules.
OUR METHODOLOGY
The Evaluation Process
A structured, methodical approach designed to deliver defensible conclusions
that satisfy regulatory expectations and governance obligations.
01
Initial Scoping
We engage with the firm's Compliance Office to understand scope, designated services, risk profile and reporting requirements. Terms of engagements are formalised.
02
Document Request
We make a formal request for AML/CTF documentation, policies, procedures, risk assessments, training records, and transaction monitoring records.
03
Document Evaluation
All submitted materials are evaluated against the requirements of the Act, Rules and relevant guidance. Gaps and observations are documented systematically.
04
Sampling & Testing
A sample of customer files, transactions and compliance activities is selected and tested against the documented procedures and regulatory thresholds.
05
Staff Interviews
Structured interviews are conducted with key personnel including the Compliance Officer, Senior Manager and selected frontline staff to assess understanding and operational adherence.
06
Findings Analysis
All findings are classified by severity, mapped to specific regulatory obligations, and assessed for systemic vs isolated occurance. Root causes are identified where evident.
07
Draft Report
A comprehensive draft evaluation report is prepared, including executive summary, detailed findings, supporting evidence references and recommended remediation areas (To avoid loss of independence, this does not include recommended solutions).
08
Final Report Delivery
The final report is delivered to the Governing Body and Senior Manager in a format suitable for executive level presentation and regulatory production as required.
Typical engagement timeline: 4-8 weeks from scoping to final report, depending on firm size and complexity.
Who We Are
Zach Oates
CO-FOUNDER & SENIOR EVALUATOR
Former Victoria Police detective experienced in interfacing with AUSTRAC on fraud and financial crime investigations.
Helped establish the office of a Commonwealth regulator (Inspector-General of Water Compliance), from inception to operation.
Held the role of Assistant Director of Audit & Investigation with the Inspector-General of Water Compliance.
As Operations Manager at Connect Family Law, built the AML/CTF program from end to end.
Designed the Assessor Accreditation Program for the training of Tranche 2 evaluators and assessors.
Luke Hollins
CO-FOUNDER & SENIOR EVALUATOR
Has extensive experience in venue management under the tranche 1 AML/CTF reforms.
Over a decade with Victoria Police covering areas including major crime and operational logistics.
Trained in brief quality assurance in 2020, ensuring evidentiary completeness and accuracy across the Victorian court system.
Completion of the Integrity Management Program and Information Management & Security qualifications.
Accredited through the Meridian Assessor Accreditation Program.
FREQUENTLY ASKED QUESTIONS
Questions & Answers
What is an independent evaluation under the AML/CTF Act?
An evaluation of your AML/CTF program completed by an experienced professional who was not involved in the design or maintenance of your program. It evaluates whether your risk assessment was designed to meet the requirements of the Act, regulations and rules. It tests your policies against those same requirements. Finally, it checks whether or not those implementations are working operationally.
How often is an independent evaluation required?
Your policy must set the frequency, however the statutory minimum is at least once every 3 years. The Transitional Rules make things slightly different for the first evaluation of newly regulated businesses based on the last two digits of your AUSTRAC enrolment number. This staggered deadline is aimed at assisting with the availability of reviewers, however AUSTRAC have indicated that there will be a shortage as we get closer to the deadline, so getting in early will be essential to remaining compliant.
Does legal professional privilege apply to materials provided for evaluation?
We have direct experience in legal operations and understand that disclosing privileged material to a third party can put privilege at risk. We take that extremely seriously and scope our evaluations accordingly. At no stage will we request access to records of legal advice. We will require access to documents relating to your AML/CTF program specifically, and any client information will be strictly limited Customer Due Diligence and transaction records.
Privilege in relation to information you provide to AUSTRAC is a separate matter. This does not relate to independent evaluations and is governed under the Act. Independent legal advice should be sought relating to those disclosures.
How long does a typical evaluation take?
There are a number of factors that influence review time. For a sole practitioner or small practice, expect around 3 - 4 weeks from engagement to delivery. For multi-office and/or multi-service firms, expect 4 - 8 weeks. However, the following additional factors need to be considered.
- Proximity to deadline. There will not be enough evaluators to meet demand, so wait times will extend.
- Program accuracy. If your program has missed service areas or risk types, scope changes will increase lead time.
- Program quality. In circumstances where the program is not well documented, increased evaluation time will be required.
- Document provision. How quickly requested documents are delivered to your evaluator upon request.
- Personnel availability. The availability of staff for interviews and updates often extends delivery timelines.
What happens if an evaluation identifies significant issues?
We report to you, not to AUSTRAC. We have no obligation or channel for providing evaluation reports to the regulator. Adverse findings trigger obligations on your side, however, you are not required to agree with every finding. Your evaluator will only deal with a sample of files, so you know your business better than anyone else. AUSTRAC expect you to take findings seriously, but if you believe one misses the mark, you simply need to justify your decision not to make changes. Where you do make changes, it's essential that you update the relevant documentation and record those updates within 14 days.
How long before my evaluation due date should I engage an evaluator?
There is expected to be a severe shortage of evaluators for the first round of evaluations. For peace of mind, we recommend getting in as early as possible for the first evaluation. Cutting your wait short the first time restarts your 3-year clock and gets you out of the cycle. We recommend engaging an evaluator at least 6 months before you are hoping to take delivery of the report. So, if you are hoping to take delivery by 30 June 2027, start the conversation in January 2027 at the latest.
Independent AML/CTF program evaluations for Australian Professional Services Businesses.
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