In a submission to the Australian Government, the auction sector has broadly welcomed proposed changes to the Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) framework, but has also warned against legislative overreach.
The Auctioneers and Valuers Association of Australia (AVAA) recently made a submission to Austrac regarding the proposed amendments to tAML/CTF framework. While the reforms are primarily designed to strengthen Australia’s financial crime prevention regime, they also raise important considerations for industries such as auctioneering and valuation that facilitate the sale of assets rather than the movement of money itself.
From the perspective of the auction sector, the key issue is ensuring that the legislative framework accurately reflects how these businesses operate in practice. Auctioneers and valuers do not provide financial services (to facilitate the transfer of wealth) in the conventional sense. Their work centres on identifying, valuing and selling tangible assets. Whether the item involved is fine art, antiques, vehicles, industrial machinery or other goods, the transaction fundamentally concerns the transfer of ownership of a specific asset.
However, during the course of completing an auction sale, funds often pass through the auctioneer’s business. When a buyer pays for an item, the payment is typically deposited into the auctioneer’s trust account before being distributed to the vendor once settlement arrangements are completed. This temporary handling of funds is a necessary part of facilitating the sale but is not itself the service being provided.
The concern identified by AVAA members during the consultation process was the possibility of unintended legislative creep.
“If legislation were interpreted too broadly, the simple fact that funds pass through an auction business could potentially lead to auctioneers being treated as if they were providing financial services. Such an outcome would impose compliance frameworks designed for banks or remittance providers onto businesses whose activities are fundamentally different” said Troy Williams, AVAA Chief Executive.
In preparing its submission, the advice of members serving on the AVAA Government Affairs Committee was crucial. These discussions highlighted the strong transparency mechanisms already embedded within the sector. Auction transactions involve identifiable assets, documented ownership and clearly recorded sales processes. Goods are catalogued and advertised prior to sale, bidders register to participate, bids are recorded during the auction and settlement occurs through regulated trust account arrangements.
These processes create comprehensive audit trails that link the asset, the seller, the buyer, and the financial transaction. In many markets, additional safeguards also exist. Art sales involve provenance checks and ownership documentation. Vehicle auctions rely on vehicle identification numbers and registration records. Machinery sales involve serial numbers and asset registers. These existing mechanisms already contribute significantly to transparency and accountability within the sector.
AVAA’s submission aims to support the broader objectives of the AML/CTF framework while ensuring that its application remains proportionate and aligned with the commercial reality of the auction sector. The submission acknowledges the positive direction of the proposed reforms, particularly the recognition that professional services may involve handling funds as part of delivering another service without automatically becoming financial services.
At the same time, AVAA has encouraged regulators to provide clearer guidance on how AML obligations apply in auction environments. In particular, the submission seeks confirmation that the temporary holding of sale proceeds through trust accounts should not be interpreted as a regulated financial service.
Ultimately, the goal of AVAA’s submission is to ensure that the AML framework continues to address genuine financial crime risks while recognising the transparency and accountability mechanisms already present in the auction sector. By engaging constructively in the consultation process, AVAA seeks to help shape a regulatory environment that protects the integrity of Australia’s financial system without imposing unintended burdens on legitimate asset markets.
.
Interested In Finding Out More?
If you’re interested in AVAA’s member-driven advocacy on this issue, send an email to government.affairs@avaa.com.au or telephone 1300 928 165. You can also stay up to date by following AVAA on LinkedIn, X/Twitter and Facebook.
.
