If you offer services designated under Australia's anti-money laundering and counter-terrorism financing (AML/CTF) regime, keeping records of your AML/CTF activities is a key compliance obligation. Good record keeping provides an audit trail of decisions and actions taken in managing AML/CTF risks.

While maintaining your client files is already part of your processes, AML/CTF requirements place additional emphasis on retaining records that demonstrate how you meet your obligations and provides evidence that appropriate controls are in place.

Why record keeping matters

Record keeping is more than an administrative exercise. Accurate and accessible records will help you:

• Demonstrate compliance with AML/CTF obligations.
• Support the preparation of your annual compliance reports.
• Evidence the triggers for submitting suspicious matters reports.
• Assist with investigating suspected money laundering, terrorism financing and other serious crimes.

Customer due diligence (CDD) records

Your records should demonstrate that appropriate steps were taken to identify and verify clients. Importantly, you do not need to keep a copy of identification documents but record the sources you relied on.

Your records may include:

• Identification and verification information and details of sources relied on.
• Beneficial ownership details.
• Risk assessments and risk ratings.
• Enhanced due diligence documentation, where applicable.

Transaction records

Where you manage client funds or complete transactions as instructed by your client, your records may include:

• Transaction details.
• Supporting instructions and correspondence.
• Relevant agreements and documentation.

AML/CTF program records

You will need to retain records that form your AML/CTF program, including:

• Risk assessments.
• AML/CTF controls, policies and procedures.
• Reviews and updates to your AML/CTF Program.
• Training and compliance activities for you and your team.

How long should records be kept?

AML/CTF records should be retained for seven years after your engagement with a client ceases. Records may be stored electronically or in hard copy, provided they remain secure, accessible and capable of being produced in English when required.

Record keeping and compliance reporting

Record keeping and compliance reporting go hand in hand. Annual compliance reports require reporting entities to provide information about how they have met their AML/CTF obligations during the reporting period. Without reliable records, firms may struggle to accurately answer compliance questions or demonstrate that required controls were operating effectively.

Common challenges

Common challenges include:

• Maintaining consistent documentation across staff.
• Storing records securely while ensuring easy retrieval.
• Managing records held across multiple systems.
• Keeping policies, risk assessments and client information up to date.

A centralised record-management approach, supported by documented procedures and regular reviews, can help address these issues.

What you should do now

• Review existing client record-management processes.
• Identify what AML/CTF records will need to be retained for designated services.
• Establish secure retention and retrieval processes.
• Train staff on AML/CTF documentation requirements.
• Retain evidence that will support future compliance reporting obligations.

Strong record keeping is one of the foundations of an effective AML/CTF compliance framework. By implementing robust processes now, you can reduce regulatory risk and be better prepared to demonstrate compliance when required.