Transitioning existing customers

Learn about your initial and ongoing customer due diligence (CDD) obligations for existing customers.

Customer is a pre-commencement customer

Your customer will be a pre-commencement customer if any of the following apply:

you're providing a designated service to the customer on 1 July 2026
you have a business relationship with this customer that involves a designated service and you provided a designated service to them before 1 July 2026.

These services must be one or more of the following:

the purchase or sale of precious metals, stones or products for $10,000 or more in physical currency or virtual assets
brokering the sale, purchase or transfer of real estate, or selling or transferring real estate without a broker
professional services.

Learn more about designated services for newly regulated entities.

In assessing whether a business relationship involves a designated service, we expect you to consider all of the following:

how long you've provided designated services to the customer
how recently you provided a designated service to the customer
whether your past dealings with the customer show a pattern of providing one or more designated services on an ongoing basis or an expectation (from you or the customer) that future designated services would be provided.

For example, a customer could be a pre-commencement customer when any of the following occur:

you're creating a company for this customer on 1 July 2026
you created a company for this customer on 20 June 2026 and committed to restructure their family trust, which you started on 20 July 2026.

The approach for dealing with pre-commencement customers for financial, bullion and gambling services hasn't changed.

Unless the circumstances set out in this guidance apply, you can continue providing designated services to pre-commencement customers without initial CDD.

When you must complete initial CDD on pre-commencement customers

This section refers to the Act sections 28, 30 and 36.

You must complete initial CDD on a pre-commencement customer if either:

a suspicious matter report (SMR) obligation arises in relation to the customer
there’s a significant change in the nature and purpose of the business relationship, which results in the customer’s money laundering, terrorism financing and proliferation financing risk (we refer to these as ML/TF risks) being medium or high.

For example, you must complete initial CDD on a pre-commencement customer if:

they request a new service in a way that’s different from your existing business relationship
this means the customer’s ML/TF risk will be medium or high (it doesn’t matter whether it was medium or high risk previously).

If this occurs, you must complete initial CDD before you start providing them with a designated service.

A customer stops being a pre-commencement customer when you complete initial CDD.

Learn more about initial CDD.

Ongoing CDD and pre-commencement customers

This section refers to the Act sections 30 and 36.

You have the following ongoing CDD obligations for pre-commencement customers:

monitor for unusual transactions and behaviours that may give rise to an SMR obligation
review, update and reverify know your customer (KYC) information relating to the customer at an appropriate frequency. This includes if you’ve doubts about the KYC information’s adequacy or veracity
monitor for significant changes in the nature and purpose of the business relationship which results in the customer’s ML/TF risk being medium or high (it doesn’t matter whether it was medium or high risk previously).

Learn how to do this in ongoing CDD.

Customer is a transferred pre-commencement customer

This section refers to the Act sections 28, 30, 36 and the Rules sections 6–27 and 6–28.

You don’t need to do initial CDD on a person who is your customer because either:

you took over all or part of another reporting entity’s business
all or part of another reporting entity’s assets and liabilities have become yours because of a voluntary or compulsory transfer.

This only applies if you’ve received copies of the following records from the other reporting entity in relation to the customer:

transaction records kept under sections 107 and 108 of the Act
initial and ongoing CDD records kept under sections 111 and 114 of the Act.

If you don’t receive these records, you must complete initial CDD before you start providing the customer with a designated service.

You must also complete initial CDD before you provide the customer with a designated service if one of the following occurs during ongoing CDD:

an unusual transaction or behaviour that may give rise to an SMR obligation
a significant change in the nature and purpose of the business relationship that may change their ML/TF risk to medium or high (it doesn’t matter whether it was medium or high risk previously).

You must still conduct ongoing CDD on these customers. This includes reviewing and updating their KYC information if you’ve doubts about its adequacy or veracity.

You conducted applicable customer identification procedures

This section refers to the Act sections 28 and 30 and the Rules section 6–42.

You’re considered compliant with your initial CDD obligations if, before 31 March 2026, you conducted the then applicable customer identification procedure (ACIP), on:

a customer
the trustee of a customer. Note: ACIP was previously required on a trustee. Under the new Rules, initial CDD must be conducted on a trust.

You must still conduct ongoing CDD on these customers.

You complied with relevant obligations in a foreign country

This section refers to the Act sections 26F, 28 and 30 and the Rules sections 6-11 and 6-43.

Designated service provided in another country

You’re considered compliant with your initial CDD obligations if all the following apply:

you’re proposing to provide a designated service to a customer at or through your permanent establishment in a foreign country
before 31 March 2026, you complied with the laws of that country giving effect to the Financial Action Task Force (FATF) recommendations relating to CDD and record keeping in relation to that customer.

You can identify if a country gives effect to the FATF recommendations relating to CDD and record keeping by considering comments on these standards in:

mutual evaluation reports about the country published on the FATF website and the websites of FATF-style regional bodies
public statements prepared by the FATF and FATF-style regional bodies published on their websites.

Previous compliance in a foreign country

You’re considered compliant with your initial CDD obligations in relation to a customer if all the following apply:

you intend to provide them with a designated service in Australia
you, or another member of your reporting group, previously started providing them with a service (whether or not it’s a designated service) at or through a permanent establishment in a foreign country
the laws of that country give effect to the FATF recommendations relating to CDD and record keeping
you, or a member of your reporting group, established matters, if applicable, as required by the laws of that foreign country.

You must also either:

hold the KYC information collected in relation to the customer, and the reliable and independent data used to verify the KYC information
have an arrangement to get immediate access to this information from another member of your reporting group.

If you intend to provide designated services in Australia to these kinds of customers, your AML/CTF policies must set out how you’ll meet these requirements.

This guidance sets out how we interpret certain Australian legislation, along with associated Rules and regulations. Australian courts are ultimately responsible for interpreting these laws and determining if any provisions of these laws are contravened.

The examples and scenarios in this guidance are meant to help explain our interpretation of these laws. They’re not exhaustive or meant to cover every possible scenario.

This guidance provides general information and isn't a substitute for legal advice. This guidance avoids legal language wherever possible and it might include generalisations about the application of the law. Some provisions of the law referred to have exceptions or important qualifications. In most cases your particular circumstances must be taken into account when determining how the law applies to you.

Last updated:
1 Jul 2026

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