REINSW Submission: Anti-Money Laundering and Counter-Terrorism Financing Rules

Submitted 13th Feb 2025

The Real Estate Institute of New South Wales (REINSW) has submitted its position on the draft  Anti-Money Laundering and Counter-Terrorism Financing Rules 2024  and proposed reforms therein. While REINSW supports the national body’s submission (ie. REIA), its submission provided feedback to government on AML/CTF matters that will specifically impact NSW.

Key concerns and recommendations include:

  • Real estate agents need clear guidance and thorough training, as they are not AML/CTF experts.
  • Compliance costs are a major concern, especially for small to medium businesses. REINSW urges AUSTRAC to reduce these costs and suggests Government funding to support training development.
  • REINSW recommends a focus on education rather than penalties, particularly during the initial rollout period. It also seeks more clarity and detail in the Rules.
  • Agencies should be able to rely on the existing "fit and proper person" licensing checks conducted by NSW Fair Trading rather than have to comply with a legislated on-boarding check.
  • AML/CTF identity verification should align with current NSW procedures to avoid duplication and confusion.
  • REINSW opposes requiring sales agents to conduct identity checks on buyers in private treaty sales, citing conflicts of interest. They suggest this be handled by buyer’s agents, banks or lawyers.
  • Auctioneers should be exempt from identity checks as they are not directly involved in transactions.
  • The Rules should allow one reporting entity’s customer due diligence checks to be used by others involved in the same transaction.
  • Proposed independent AML/CTF program evaluations every 3 years is too costly; REINSW recommends exemptions or streamlining.
  • A flexible reporting group structure is preferred, and care must be taken not to burden smaller agencies.
  • Guidance is needed for suspicious activity reporting, and REINSW notes potential conflicts with State laws and the risk of reputational damage.

REINSW has also notified members that big changes are coming in AML, privacy and more, and is distributing information and promoting resources to help members stay informed.