Bottom Line
A legally compliant Tranche 2 AML program can be achieved at no cost using program documents like ours, with a free AML Portal and $35/customer CDD. The legislation doesn't mandate expensive software or ongoing subscriptions for small operators.
What the Law Actually Requires
The AML/CTF Act requires reporting entities to have a documented AML/CTF program that includes specific components. The law is requirements-based, not prescriptive about how you meet those requirements.
This means you don't need:
- Expensive software platforms
- Monthly subscription services
- External consultants
- Automated screening systems (for most small businesses)
The Absolute Minimum Requirements
Here's what you legally must have:
Core Program Elements
-
AML/CTF Program Document
A written program appropriate to your designated services
-
ML/TF Risk Assessment
Assessment of money laundering and terrorism financing risks
-
Customer Due Diligence Procedures
How you'll identify and verify customers
-
AML/CTF Compliance Officer
Designated person responsible (can be yourself)
-
Employee Training Program
Evidence that relevant staff understand obligations
-
Record Keeping Systems
Ability to retain and produce records for 7 years
What's NOT Required for Small Businesses
Many providers will try to sell you features you don't legally need:
- Automated screening software - manual checks of sanctions lists are acceptable for low-volume businesses
- Ongoing monitoring platforms - documented periodic reviews meet the requirement
- Cloud portals - paper or simple digital records are compliant
- Annual subscriptions - program documents with occasional updates are sufficient
The Hidden Cost of "Cheap"
While you can technically write your own program using free AUSTRAC guidance, consider the real costs:
DIY Hidden Costs
- Time investment: 40-80+ hours to research, draft and refine
- Risk of gaps: missing requirements can lead to enforcement action
- Opportunity cost: time away from billable work or business operations
- Revision cycles: multiple drafts as you learn what's actually needed
Our Recommendation
For most small to medium businesses, the sweet spot is:
- Program documents tailored to your sector - includes free AML Portal access and $35/customer CDD
- Free AUSTRAC resources - official guidance to ensure alignment
- Manual processes - simple checklists and registers rather than software
- Self-training - use provided materials rather than external courses
This approach gives you a compliant program at no cost with no ongoing subscriptions, while minimising risk and time investment.
When You Need More
Consider investing in additional tools or services if:
- You process high volumes of transactions requiring automated screening
- You have multiple staff members who need coordinated access
- Your clients include high-risk categories requiring enhanced due diligence
- You provide services that trigger threshold transaction reporting