AML Compliance Guide
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Sanctions screening for Bookkeeperss — 2026 AUSTRAC Guide

Sanctions screening means checking whether your client, the people behind the client, or anyone acting for them is subject to targeted financial sanctions before you provide a designated service and during the relationship. For bookkeepers, this matters when you are providing a designated service from 1 July 2026, especially where you handle client money, payment instructions, payroll, accounts payable, trust or company administration, or cross-border transactions. If you provide services to a sanctioned person or deal with frozen assets, you can commit a strict-liability criminal offence, and AML/CTF breaches can also attract civil penalties of up to $33.5 million per contravention.

Your AML/CTF obligations

  1. 1. AUSTRAC enrolment
  2. 2. Compliance officer
  3. 3. ML/TF risk assessment
  4. 4. AML/CTF program
  5. 5. Customer due diligence
  6. 6. Sanctions screening
  7. 7. Suspicious matter reporting
  8. 8. Record keeping (7 years)
  9. 9. Staff training

For a bookkeeping practice, sanctions screening is not just a name check on the client who signed the engagement letter. You must establish on reasonable grounds whether your customer is designated for targeted financial sanctions before starting the designated service, and also check any beneficial owner, any person on whose behalf the customer receives the service, and any person acting on the customer’s behalf. In practice, that can include the director instructing you, the ultimate owners of a company, the trustee behind a trust client, or a third party telling you where to send funds. If you are processing payments, reconciling accounts, setting up payees, or preparing instructions involving overseas counterparties, sanctions risk rises quickly.

What a bookkeeper should do in practice

  • Identify exactly who you need to screen before starting the designated service: the client, each beneficial owner with 25% or more ownership or effective control, anyone acting for the client, and anyone on whose behalf the client is receiving the service.
  • Search DFAT’s Consolidated List using current details and sensible variations of names, especially where names may have alternate spellings.
  • Record the date of the search, what list you used, who was screened, the search terms used, and the result.
  • Set a process to rescreen during the relationship, especially when ownership changes, new directors are appointed, payment destinations change, or the client starts dealing with overseas suppliers or customers.
  • Escalate any potential match before processing payments, onboarding payroll staff, creating new suppliers, or releasing funds.

Do not process first and check later

If a person is designated for targeted financial sanctions, their assets must be frozen and you must not make assets available to them without a sanctions permit. Do not return funds, pay invoices, release money, or follow instructions linked to that person until the issue is resolved. If you are, or think you may be, holding a frozen asset, contact the Australian Sanctions Office and report it to the Australian Federal Police as soon as practicable.

A common mistake for bookkeepers is assuming sanctions screening only matters for banks or international transfers. It also matters where your work helps move value or gives practical control over assets. Another mistake is screening only at onboarding and never again. Sanctions lists change often, and bookkeeping clients can change directors, shareholders, trustees, or trading partners without much notice. Tax return preparation alone is generally not a designated service for accountants and bookkeepers, but if your practice also provides a designated service, sanctions screening applies to that regulated work.

Practical tips for a small bookkeeping practice

  • Build the screening step into your client intake form and your new-supplier or new-payee setup process.
  • Ask company and trust clients up front for ownership details, trustee information, and who is authorised to instruct your practice.
  • Flag higher-risk files for extra checks: overseas owners, foreign beneficiaries, complex structures, customers linked to high-risk jurisdictions, or requests to pay third parties.
  • Subscribe to DFAT sanctions updates and train staff who handle onboarding, payroll, accounts payable, and payment instructions.
  • Keep clear records for 7 years after the relationship ends, including your screening evidence and any escalation notes.

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Frequently asked questions

Do I need to screen every bookkeeping client, even if I only do BAS and reconciliations?
You only have AML/CTF obligations if you provide a designated service. If the engagement is not a designated service, the sanctions screening obligation under the AML/CTF regime is not triggered for that work. If your practice does provide a designated service to that client, you must screen before starting that service and during the relationship.
Who counts as a beneficial owner for my company clients?
A beneficial owner is the natural person who ultimately owns or controls the client, including someone holding 25% or more or exercising effective control. For a company client, do not stop at the trading name or even the directors if someone else ultimately owns the shares or controls decisions. Your sanctions screening must cover those individuals as well.
What if the client is an Australian company with no overseas activity?
You still need to screen if you are providing a designated service. AUSTRAC guidance says your business may have lower proliferation financing risk if you only operate in Australia and do not deal with customers connected to high-risk jurisdictions, but you must still document the risk and meet your sanctions obligations. Low risk does not mean no screening.
Do I need expensive screening software?
No law says a small bookkeeping practice must buy paid software. You can use DFAT’s Consolidated List and a documented manual process if it is reliable for your client base and volume. If you have higher-risk clients, complex ownership structures, or frequent overseas payment activity, software may be a practical control but it is not mandatory.
What should I do if a name looks like a possible sanctions match?
Stop and escalate before providing the designated service or carrying out the instruction. Check identifiers carefully, including date of birth, address, company details, ownership information, and alternate spellings, and do not deal with assets until the issue is resolved. If you are or may be holding a frozen asset, contact the Australian Sanctions Office and report it to the Australian Federal Police as soon as practicable.

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