Existing Customers and CDD After 1 July

An existing customer relationship does not automatically mean they need initial CDD immediately after 1 July. It also does not mean no CDD work is needed. AUSTRAC's current guidance distinguishes pre-commencement customers from new relationships and sets out when initial customer due diligence (CDD) becomes necessary.

The agency must assess and document its own facts. This article helps a real-estate principal understand the questions to record and route under the agency's AML/CTF program. It is general information only, not a determination about a particular customer or property matter.

What AUSTRAC means by a pre-commencement customer

AUSTRAC says a customer may be a pre-commencement customer where the agency was providing them a designated service on 1 July 2026, or where the agency had a business relationship involving designated services and had provided one before that date. For real estate, this can include brokering the sale, purchase or transfer of real estate.

That status is about the actual relationship, not a shortcut based only on when a contact first appeared in a CRM. AUSTRAC says agencies should consider how long they have provided designated services, how recently they did so, and whether the past dealings show an ongoing pattern or an expectation of future services.

For the right agency and facts, AUSTRAC says designated services can continue for a pre-commencement customer without initial CDD unless one of the specific circumstances below arises. That is why a short written record of the relationship assessment matters.

When AUSTRAC says initial CDD is required

AUSTRAC says initial CDD must be completed for a pre-commencement customer if either:

• an SMR obligation arises in relation to the customer; or
• there is a significant change in the nature and purpose of the relationship that results in the customer's money laundering, terrorism financing or proliferation financing risk being medium or high.

AUSTRAC gives an example of a customer asking for a new service that is different from the existing relationship and changes that risk to medium or high. In those circumstances, initial CDD must be completed before the agency starts providing the designated service.

This is not a reason for a frontline team member to make a reporting or legal conclusion alone. A changed instruction, unusual request or risk indicator is a reason to preserve facts and follow the agency's escalation process. It does not, by itself, establish wrongdoing or predetermine the outcome.

What ongoing CDD still requires

Pre-commencement status is not an exemption from ongoing attention. AUSTRAC says ongoing CDD includes monitoring for unusual transactions or behaviours that may give rise to an SMR obligation, reviewing and updating KYC information at an appropriate frequency, and doing so when there are doubts about the information's adequacy or accuracy.

The agency must also monitor for a significant change in the relationship's nature and purpose that may move the ML/TF risk to medium or high. A sensible process separates observation from conclusion: staff record the facts, then the appropriate person reviews them under the agency's program.

A principal's practical record

For each existing relationship that continues after 1 July, the principal or nominated reviewer can keep a brief, factual record of:

• the designated service the agency is providing or expects to provide;
• the key dates and the relationship history considered;
• why the agency considers the relationship ongoing, completed or needing further review;
• current KYC information, any known gaps, and the next review point under the agency's policies;
• any changed instruction, unusual behaviour or escalation and the person responsible for review.

This is an operational record, not a substitute for the agency's AML/CTF program or advice on a difficult matter. It gives the agency a clear basis to explain how it approached its own relationship assessment and what happened next.

Use the right guide for the next question

Start with Real Estate AML/CTF: Are You Covered? if the question is whether the service is in scope. Use Real estate AML/CTF risk indicators: what to review for examples that may need closer review. For a controlled escalation and reporting-readiness process, read New AUSTRAC SMR Form: Real Estate Readiness.

Where AMLHive fits

AMLHive can bring customer checks, screening outcomes, review handovers and evidence notes together for the agency's documented workflow. It does not provide legal advice, does not decide whether initial CDD is required, and does not automatically lodge reports. The agency retains its AML/CTF decisions and legal responsibility.

Sources

• AUSTRAC - Transitioning existing customers (last updated 1 July 2026; accessed 22 July 2026)
• AUSTRAC - Latest guidance updates (2026 update register accessed 22 July 2026)
• AUSTRAC - Real estate program starter kit: Getting started (last updated 10 July 2026; accessed 22 July 2026)

Re-check current AUSTRAC guidance before publishing or reusing this article. This is general educational material, not an individual legal, financial or compliance answer.