AUSTRALIA Trends and Developments Contributed by: Michael Lawson, Nicole Brown, Lizzie White and Tamaryn Leach, MinterEllison
assist in establishing entities and trusts) are intended to be captured under the AML/CTF Regime. The reforms also aim to modernise the regime (ie, by including virtual assets) and streamline compliance. Existing rules will be replaced to provide a less prescriptive approach through new overarching obligations based on risk. This is intended to provide flexibility for reporting entities to implement risk-based systems and controls that suit their particular business. The changes reflect the Government’s intention to dissuade tick-a-box compliance behaviour, instead requiring reporting entities to invest time and resources to consider their risks and implement appropriate controls and procedures properly. Risk assessment will be at the core of compliance programs under the new arrange - ments. The reforms will come into force progressively, with the repeal of the Financial Transactions Reports Act 1988 taking effect from 7 January 2025, changes to “tipping off” offences com - mencing on 31 March 2025, changes for exist - ing reporting entities starting on 31 March 2026 and providers of new designated services being expected to comply from 1 July 2026. AUSTRAC will likely prepare new AML/CTF Rules and sup - porting guidance for the updated regime and is
legislation makes climate reporting mandatory for all entities currently required to issue financial reports under Part 2M of the Corporations Act 2001 (Cth), which relevantly includes listed and unlisted companies and registered managed investment schemes. The new regime will be implemented in phases, depending on an entity’s number of employees, consolidated gross assets, and consolidated revenue. The largest emitters and corporations (Group 1, roughly equivalent to the ASX 200 and their private company counterparts) have been required to disclose information since 1 January 2025. Meanwhile, the smaller entities in Group 2 and Group 3 will be phased in starting from 1 July 2026 and 1 July 2027, respectively. The mandatory disclosures must adhere to the AASB S2 standard, which is the Australian adap - tation of the international climate standard, IFRS S2. The standard requires an entity to disclose information about climate-related risks and opportunities that could reasonably be expect - ed to affect the entity’s cash flows, as well as its access to finance or cost of capital over the short, medium, or long term. Alongside the mandatory AASB S2, the regime includes a general sustainability standard, AASB S1, which is based on IFRS S1 and intended to be used by organisations to disclose sustainabil - ity beyond climate (such as nature and biodiver - sity). While this standard is currently voluntary, the government has flagged that eventually, it may become mandatory as part of its “climate first but not only” policy. Entities are expected to report the disclosures annually in a sustainability report. In addition, directors will be required to declare whether, in their opinion, their entity’s disclosures are
expected to finalise these in 2025. Mandatory climate-related financial disclosures
Since 1 January 2025, many large businesses and financial institutions in Australia have been obliged to comply with the new mandatory cli - mate reporting requirements set out in the Treas - ury Laws Amendment (Financial Market Infra - structure and Other Measures) Bill 2024 (Cth), which was enacted in September 2024. The
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