AUSTRAC Section 167 Notice: What It Is, What It Asks and How To Answer It (2026)

Since late August a letter has been landing at real estate agencies, accounting practices, law firms and jewellers that AUSTRAC believes are providing a designated service without having enrolled. It cites section 167 of the AML/CTF Act, it asks questions, and it has a deadline. This is what it is, what it is asking, and how to answer it without making things worse.

What a section 167 notice is

Section 167 of the Anti-Money Laundering and Counter-Terrorism Financing Act lets an authorised AUSTRAC officer require a person to give information, produce documents, or make copies of documents, where the officer reasonably believes the person has material relevant to the operation of the Act. It is a compulsory notice, not a survey. It is not a finding that you have done anything wrong. It is not optional either.

Two things make it different from ordinary correspondence. Answering is required by law, and the answer can be used. AUSTRAC used the August round to decide who was fined in September.

Why they started arriving in August 2026

The enrolment deadline for Tranche 2 businesses was 29 July 2026. On 28 August AUSTRAC began issuing section 167 notices to businesses that appeared, from the data it holds, to be providing designated services without enrolling. Real estate, accounting, legal and jewellery businesses were the main recipients. According to AUSTRAC, about 90 per cent of the businesses contacted then enrolled or tried to. The remainder received infringement notices from late September: $21,840 for a company and $4,368 for an individual.

So the notice is the step before the fine. Answer it well and the matter usually ends there.

What it typically asks

The notices reported so far ask a business to explain itself. Expect questions along these lines:

What services you provide, and since when.
Whether any of them is a designated service under the Act, and if you say not, why not.
Your business structure, ABN and trading names.
Whether you have enrolled with AUSTRAC, and if not, why not.
Copies of the documents that support your answers.

The scope is set by the notice itself. Answer what it asks. Do not volunteer a history of everything you have not done.

The deadline

The notice states a date, and it can be short. Law firms reporting on the August round describe deadlines as short as 14 days from the date of the notice. If you genuinely cannot meet it, ask AUSTRAC in writing for more time before it expires, and say why. Silence past the date is the worst option available.

What happens if you ignore it

Failing to comply with a section 167 notice is an offence in its own right, and the section also carries a civil penalty provision. Giving false or misleading information in response is a separate and more serious matter. And an unanswered notice does not go away. The business that ignores it is the business most likely to receive an infringement notice next, and an infringement notice left unpaid is the path Castra Licensee and Princeton Securities took to the Federal Court in May 2026, where $18,780 notices became $50,000 and $45,000 penalties plus costs.

How to answer it

Put the deadline in the diary today and work back from it.
Decide, honestly, whether you provide a designated service. Selling or buying real estate for a client, setting up companies or trusts, acting as a nominee or trustee, handling client money in a transaction, arranging the sale of a business: yes. Tax returns and BAS lodgements on their own: no. Our scope checker walks through it.
If yes, enrol now, before you reply. Enrolment is free and takes under an hour on AUSTRAC Online. Then your answer to "are you enrolled" is "yes, on this date", which is a different conversation from "no".
If no, say why, with evidence. A one-page explanation of what the business does and why none of it is a designated service, with the documents the notice asked for.
Answer every question, only the questions, truthfully. Keep a copy of the notice, your reply and the date you sent it.
Have a lawyer read it before it goes if anything is unclear, or if you are relying on an out-of-scope argument. A section 167 notice is a formal legal document and the reply is on the record. This article is general information, not legal advice.

After the notice

If you enrolled in response, you now have the other obligations to meet: a written program built on a risk assessment, customer due diligence on every client taken on since 1 July, ongoing monitoring, reports, records, training and the annual compliance report. AUSTRAC has said it is actively looking for businesses that have not enrolled, and the obvious next question for a business that enrolled under notice is what it has done since. The KYC guide is the place to start.

Enrolled under notice? The rest is one sitting.

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Frequently Asked Questions

Is a section 167 notice an accusation?

No. It is a request for information backed by law. AUSTRAC issues one where it reasonably believes you hold information relevant to the Act; in this round, because its data suggested a business was providing a designated service without enrolling. It becomes a problem only if it is ignored, answered falsely, or confirms a business should have enrolled and still has not.

Can I just enrol instead of replying?

Enrol, and reply. The notice requires an answer by its date, and enrolling does not cancel it. Enrol first, so the reply can say so.

What if I am not providing a designated service?

Say so in the reply, explain why, and attach what the notice asked for. Keep the reasoning on file; it is the same reasoning you would give AUSTRAC in a later assessment.

What is the penalty for not responding?

Section 167 carries both an offence and a civil penalty provision, and the amount depends on the circumstances. In practice the business that does not respond is the one that receives the $21,840 infringement notice next.

Sources: Grant Thornton, AUSTRAC commences issuing section 167 notices to newly regulated businesses · Holding Redlich, AUSTRAC's section 167 notices: the next challenge for Tranche 2 entities · Clyde & Co, AUSTRAC takes compliance action in relation to Tranche 2 entities (August 2026) · AUSTRAC, AUSTRAC begins issuing infringement notices to non-enrolled businesses (September 2026).

Got a Section 167 Notice From AUSTRAC? What It Is, What It Asks, and How To Answer It