Australia’s financial intelligence agency, Austrac, has been called in to assist with efforts to combat the illegal tobacco trade, which is generating hundreds of millions in criminal profits. The agency is using advanced tracking tools to monitor financial flows across various industries and identify suspicious activity.
Austrac is focusing its efforts on areas such as property transactions, cryptocurrencies, privately operated ATMs, legal professionals, and car dealerships—sectors now being exploited by organised crime groups to launder cash from illegal tobacco sales.
In recent years, Austrac has played a pivotal role in shutting down money laundering channels in banks, casinos, and bookmakers. As these traditional avenues have been heavily scrutinised, crime networks are moving into less regulated sectors to clean illicit funds.
Illegal tobacco has become a high-priority area. Most transactions occur in cash, making it difficult to track and easy for criminals to exploit. Victoria has seen more than 100 suspicious fires linked to turf wars over tobacco sales, with similar conflicts now emerging in other states.
Austrac’s involvement brings a critical layer of intelligence and financial tracing to support state and federal law enforcement. In addition to tobacco-related crime, Austrac monitors for terrorism financing, scams, and the use of funds for child exploitation. It is also part of Australia’s National Intelligence Community.
The agency has established itself as a powerful regulator, having secured billions of dollars in penalties from financial institutions over weak money-laundering controls. Major enforcement actions include a $1.3 billion fine against Westpac and $450 million against Crown Resorts. It is currently pursuing a $400 million case against Star Entertainment.
Austrac is also seeing improvements in the casino industry, with many operators shifting towards cashless systems that provide clearer audit trails. Nevertheless, the agency warns of growing threats from global laundering syndicates, some of which are specifically targeting Australia as a destination for financial crime.
These international groups offer to clean vast amounts of dirty cash in exchange for a fee. They find entry points into Australia’s financial system and exploit weaknesses wherever possible. The funds often originate outside Australia, but are routed through the local economy and returned overseas as seemingly legitimate revenue.
A growing tactic involves recruiting international students to either open or sell bank accounts, which are then repurposed as mule accounts. These are used by laundering networks to move money undetected through various financial channels.
Real estate has also become a favoured method for laundering, prompting the Australian government to expand Austrac’s regulatory reach. From July 2026, real estate agents, lawyers, conveyancers, accountants, jewellers, and luxury goods dealers will be required to comply with anti-money laundering regulations. Crypto exchanges will be brought under the regime from March 2026.
These changes, part of the government’s “Tranche 2” reforms, aim to bring Australia in line with other advanced economies when it comes to financial crime oversight. The rules will compel businesses to report suspicious activity and provide Austrac with valuable intelligence on where illicit money is moving.
The agency is currently conducting consultations to ensure the new rules are proportionate and manageable, particularly for small businesses. The goal is to balance regulatory burden with the need to maintain integrity in the financial system.
Criminal syndicates are persistent and opportunistic. As soon as a vulnerability is discovered—whether in compliance systems or business operations—they exploit it extensively until it’s closed off. The cycle then begins again with new targets.
Austrac’s enforcement record has sent a clear message to financial institutions. Major banks, once slow to adapt, have significantly improved their anti-money laundering efforts, with hundreds of millions invested and thousands of staff dedicated to compliance. The shift has turned what was once a strained relationship into a collaborative one.
This collaboration took a major leap forward last year when Austrac partnered with the big four banks to review nationwide cash deposit activity over a six-month period. The investigation, powered by artificial intelligence, analysed 56 million data points and uncovered criminal behaviours invisible to individual institutions.
Digital currencies, including bitcoin, remain a tool of choice for criminals, but they are increasingly traceable with the right tools. Although once a major challenge, these technologies now allow law enforcement to follow transactions across blockchain networks.
Austrac continues to rely on a $10,000 threshold for mandatory reporting of cash deposits, in line with international standards. But with the help of AI, the focus has shifted from fixed dollar amounts to patterns of behaviour. Even deposits below the threshold, if frequent or structured to avoid detection, can now trigger alerts.
As Australia strengthens its defences, agencies like Austrac are proving that following the money remains one of the most effective weapons in the fight against organised crime.
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