A plain definition
Money laundering is dealing with money or property that is the proceeds of crime in a way that hides where it came from, who controls it or what it will be used for. Under Australian law it is a criminal offence in its own right (Division 400 of the Criminal Code), separate from the crime that produced the money.
The three stages
Real cases rarely follow the stages neatly, but the model explains why property, professional services and company structures are attractive: they are where layering and integration happen.
- Placement: getting cash or other proceeds into the financial system, for example by depositing it, buying assets or paying for services.
- Layering: moving it through transactions, accounts, companies and trusts to break the trail.
- Integration: bringing it back as apparently clean money, often as property, a business or an investment.
How it looks in Australia
- Property bought with cash or with funds routed through several accounts and a third party.
- Companies and trusts set up with nominee directors to hide who really owns an asset.
- Cash-intensive businesses used to blend illicit takings with real ones.
- Funds moved through remitters, casinos and, increasingly, digital assets.
- Professional services used to give a transaction a respectable face.
Why it matters to small businesses now
From 1 July 2026 accountants, bookkeepers, real estate agents, lawyers and conveyancers are reporting entities. The law does not ask them to investigate crime. It asks them to identify their clients, understand the purpose of a transaction, notice what does not fit and report a suspicion within three business days. This site explains those obligations; the sector guides below go deeper for each profession.
Questions people ask
- Is money laundering only about cash?
- No. Cash is one route, but most laundering today moves through bank transfers, companies, trusts, property and professional services. The AML/CTF Act covers all of them.
- How much money is laundered in Australia?
- Nobody knows precisely; estimates from AUSTRAC and law enforcement run to tens of billions of dollars a year. The point of the regime is that the true figure is invisible until the businesses handling the money start looking.
- What is the difference between money laundering and terrorism financing?
- Laundering hides money that came from crime. Terrorism financing moves money, which may be legitimate, towards a terrorist purpose. Australian law covers both, which is why the regime is called AML/CTF.
Sources
Official AUSTRAC guidance this page was checked against. The date is when we captured the page; AUSTRAC may have updated it since.
- Money laundering, terrorism financing and proliferation financing definitions · AUSTRAC, captured 29 Dec 2025
- Suspicious matter reports (Reform) · AUSTRAC, captured 27 Dec 2025
General information about Australian AML/CTF law, not legal advice. The Act, the Rules and AUSTRAC's guidance are the primary sources.