The Time to Start Preparing for Anti-Money Laundering and Counter Terrorism Financing Obligations is Now

On 10 December 2024, the Anti-Money Laundering & Counter-Terrorism Financing (AML-CTF) Amendment Act 2024 (Cth) received royal assent.

The amendments extend the AML-CTF regime to professional service providers, including lawyers.

For businesses providing “designated services” obligations will include customer due diligence, suspicious matter reporting, AML-CTF programs and risk assessments.

Why are the changes happening?
Practitioners can sometimes either wittingly or unwittingly be used to facilitate money laundering. The new AML-CTF Act brings Australia in line with international standards set by the Financial Action Taskforce.

The aim of the reform is to strengthen Australia’s AML-CTF regime and protect the community from serious and organised crimes.

Designated Services
If a legal service is what is known in the AML-CTF Act as a designated service, the new anti-money laundering obligations will apply. These include services assisting clients to:

• buy, sell or transfer real estate;
• buy, sell or transfer legal entities;
• receive, hold, control or manage funds and/or property, for example money, accounts, securities or assets;
• sell or transfer a shelf company;
• carry out some transactional work, including equity and debt financing; and
• creating or restructuring a legal entity or legal arrangement.

The new AML-CTF Act also captures services where the legal practitioner:

• acts (or arranges for another person to act) as a director, partner, trustee, or pursuant to a power of attorney etc;
• acts (or arranges for another person to act) as a nominee shareholder; and
• provides a registered office address or principal place of business.

Compliance obligations
The compliance obligations imposed by the new AML-CTF Act are not insubstantial. They include:

1. Commencing 31 March 2026, enrol with AUSTRAC;
2. Develop and maintain an AML-CTF program based on a “risk based approach”;
3. Conduct customer due diligence (CDD) verifying the identity of clients and beneficial owners;
4. Conduct ongoing CDD monitoring for any changes that may impact their risk profile or indicate behaviour which may be unusual or suspicious;
5. Report certain transactions and suspicious activity;
6. Make and keep records for at least 7 years;
7. Appoint a compliance officer.

Key Dates

• 31 March 2026 – Enroll with AUSTRAC to commence for TRANCHE 2 entities including legal practitioners providing designated services
• 1 July 2026 – The new AML-CTF obligations for TRANCHE 2 entities including legal practitioners providing designated services will fully commence

What can legal practitioners do now?
The Law Society, through its national body, the Law Council of Australia, is working with AUSTRAC on the development of guidance notes and rules which will help clarify many aspects of the implementation and day to day operation of the new AML-CTF Act.

In the meantime, there are steps that legal practitioners can take, including:

• Review your practice: carefully assess the services you provide against the list of designated services. This is the most critical step in determining your obligations. If you do provide designated services, you will be required to enroll with AUSTRAC. If you provide very few designated services, it may be that you decide to no longer provide these services to avoid triggering the AML/CTF regulatory obligations.
• Enroll with AUSTRAC: this is a mandatory step for those providing designated services.
• Familiarise yourself with the CDD principles.
• Consider risk assessment: begin thinking about how you might assess the risk of money laundering and terrorism financing within your practice.
• Training and education: explore available resources and training programs on AML-CTF compliance.
• Stay informed: the Law Society is part of significant efforts being made at a national level to prepare the legal profession for the current changes. The profession will be kept up to date with developments. I urge legal practitioners to start working now in preparation for the coming AML-CTF obligations.

Luke Rheinberger
April 2025