Further requirements of the Anti-Money Laundering/Counter-Terrorism Financing Act came into effect today after continual calls from privacy advocates to scrap the controversial legislation.
The first tranche of the AML/CTF Act went into full effect today with banks and other financial institutions now expected to be fully compliant with the legislation.
It is expected that the second tranche will be effective some time in the first half of next year and will require a number of small businesses and professionals such as lawyers, accountants, real estate agents and jewellers to report suspicious transactions to the Australian Transaction Reports and Analysis Centre (AUSTRAC).
The Australian Privacy Foundation has previously said that the laws will effectively recruit small businesses to spy on their customers.
"While it is of course important for businesses to collect the required information from customers to meet AML/CTF requirements, they should be careful not to over-collect, as this may breach their customers' privacy rights," said Karen Curtis, the Australian government's federal Privacy Commissioner, in a statement.
"Most importantly, businesses should adopt a sound risk-based approach to ensure that all information collected for AML/CTF reporting obligations is strictly necessary, and they should not try to apply an 'arbitrary standard' to their collection processes," she said.
The Privacy Commissioner told ZDNet Australia that AUSTRAC and all businesses required to report under the new laws will also be accountable through an extension of the Privacy Act.
"Banks and other businesses are now required to be actively suspicious of their own customers rather than just providing a service," said Roger Clarke, Chair of the Australian Privacy Foundation, who has repeatedly described the laws as a violation of individual privacy.
According to the Privacy Commissioner: "The new laws bring Australia into line with other anti-money laundering regimes around the world."