As Tranche 2 AML/CTF reforms loom, child protection experts have warned that financial crime isn’t just a regulatory burden but a frontline in the fight against exploitation.
Preventing financial crime is as much a moral responsibility as a compliance one, said Rosie Campo, head of corporate engagement at ICMEC Australia.
The need for action is stark. Around one in four Australians experienced sexual abuse before the age of 18, according to the Australian Child Maltreatment Study, published in the Medical Journal of Australia in 2023. Campo said that when viewed through the lens of financial crime prevention, the statistic underscores the human impact behind new compliance requirements for Tranche 2 entities.
“There is a child behind every number, and that’s obviously devastating. However, that can also be motivating, because it shows you why it matters to be compliant. It may seem like a lot of business uplift, but the flip side is you’re contributing to the solution,” she said.
ICMEC Australia is a not-for-profit that works to create a world where technology cannot be used to harm children. It does not work directly with parents or the public but focuses instead on strengthening the professionals on the front lines: law enforcement, government, academics, and the private sector.
Over the past two years, the organisation has worked closely with Tranche 1 entities under Australia’s AML/CTF reforms. Campo explained that their efforts highlight what’s possible when industry steps up.
“These are passionate professionals who go beyond regulatory requirements, investing in education and awareness to strengthen their ability to identify and stop criminals exploiting their systems and services. In doing so, they become part of the solution and help ease the burden on law enforcement, which is already overwhelmed by the scale of the problem,” she said.
A confronting crime
Campo said that the crime type is confronting and often underestimated.
“People have a misconception that Australia is a safe country, and this stuff doesn’t happen here – but it does,” she said.
She also stressed that child sexual exploitation and abuse (CSEA) is rarely an isolated crime. It is often interconnected with other forms of financial crime, such as money laundering.
While acknowledging the work Tranche 2 will cause for businesses – especially smaller businesses – Campo said it is critical, as professionals in these sectors often encounter red flags: a lawyer noticing suspicious trusts, an accountant reconciling questionable tax returns, or a real estate agent inspecting a property where something is not quite right – these are just some examples of many.
“Criminals are opportunistic. Anytime there’s a gap or a lack of due diligence, they will exploit it. These reforms help close those gaps,” she said.
The cost of inaction
Beyond compliance, there are also serious reputational risks. In 2023, JPMorgan paid $US290 million ($430 million) to settle a lawsuit by Jeffrey Epstein’s victims, who alleged the bank facilitated his sex trafficking activities.
Campo pointed out that a 2023 study, On Us: Australian Business Coalition for Safeguarding Children, found that fewer than half of business leaders have policies in place to protect children when engaging with their services, products, or activities.
“That in itself shows us we have a big gap in terms of human rights and social impact, and in making sure our services and systems are not used to exploit our most vulnerable population,” she said.
Just get started
Campo’s message to Tranche 2 entities is simple: don’t be paralysed by the scale of the task.
“Get board and leadership on board. I understand these changes are putting a lot of pressure on businesses, especially smaller ones, but you don’t have to solve everything overnight. Start with awareness. Recognise that this is about contributing to a greater good and that you have the ability to be part of the solution.”
In addition, she said ICMEC Australia has numerous resources, including webinars and awareness training, available to help.
Rosie Campo is a featured speaker at AML Edge 2025, the only AML conference built specifically for Tranche 2 entities, taking place Tuesday, 21 October 2025, at Watersedge, Sydney. Only a handful of tickets remain – get yours here.
