Application of Anti-Money Laundering Obligations on Lawyers in Australia

The Australian legal profession is on the cusp of significant regulatory change with the passage of the Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024. This legislation extends the existing anti-money laundering (AML) and counter-terrorism financing (CTF) regime to Australian law firms, marking a substantial shift for the sector. The key commencement date for these new obligations, specifically for tranche two entities providing new designated services, is 1 July 2026 ¹. To comply with the amended Act, lawyers will need to undertake several crucial steps, including enrolling with AUSTRAC, developing a comprehensive AML/CTF program tailored to their practice, conducting thorough customer due diligence, adhering to strict reporting requirements for suspicious activities and certain transactions, and maintaining detailed records ¹. The practical implementation of these obligations will be further defined by AML/CTF Rules and Guidance, which are currently under development and consultation by AUSTRAC ¹. The amended Act also clarifies the treatment of Legal Professional Privilege (LPP) within the AML/CTF framework ¹, and law firms must also be mindful of their obligations under the Privacy Act when handling personal information for AML compliance ².

The consistent indication from various authoritative sources, including AUSTRAC, government publications, and legal professional bodies, points towards 1 July 2026, as the definitive start date for the new AML obligations affecting lawyers providing new designated services ¹. This unified messaging across different stakeholders provides a clear and reliable timeframe for law firms to plan and execute their compliance strategies. The alignment of this date across official and professional communications underscores its importance for the legal sector’s preparation efforts. Furthermore, the repeated emphasis on the core compliance obligations—enrolment, program development, customer due diligence, reporting, and record-keeping—across numerous documents signifies their foundational nature within the AML/CTF regime for the legal profession ¹. These elements form the essential framework that law firms must establish to effectively mitigate the risks of money laundering and terrorism financing.

2. Introduction:

The extension of AML obligations to professions beyond the financial sector, often referred to as “gatekeeper” professions, reflects a global trend aimed at bolstering defenses against financial crime. This expansion aligns Australia with international standards set forth by the Financial Action Task Force (FATF), the global body dedicated to combating money laundering and terrorist financing ¹. The Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024 (the Amendment Act), which passed the Australian Parliament on November 29, 2024, and received Royal Assent on December 10, 2024, is the legislative instrument that brings these changes into effect for the Australian legal profession ¹. The primary objectives of this Amendment Act include broadening the scope of the AML/CTF regime to encompass lawyers (categorised as “tranche two” entities), enhancing the overall effectiveness of the regime, and modernizing it to address evolving business practices, technological advancements, and illicit financing methods ⁴. The development of this significant legislative change was informed by extensive consultations conducted by the government with various stakeholders, including affected industries, national security agencies, law enforcement bodies, and regulatory authorities ¹.

The global movement to include professions like law in AML regimes stems from a recognized vulnerability where these sectors can be exploited, knowingly or unknowingly, to facilitate the laundering of illicit funds ². By aligning with FATF standards, Australia is addressing a previously identified regulatory gap and demonstrating its commitment to international efforts in combating financial crime. This move acknowledges that the legal profession, due to its involvement in significant financial transactions and its role as trusted advisors, can be a potential avenue for money launderers seeking to legitimize their ill-gotten gains. The substantial effort undertaken by the government to consult with affected sectors, evidenced by over 270 submissions and more than 100 stakeholder meetings ¹, underscores the intention to create a regulatory framework that is both effective in preventing financial crime and practical for the legal profession to implement. This extensive consultation process suggests that the government has considered the potential impact on legal practices and has sought to incorporate industry perspectives in shaping the final legislation and forthcoming guidance.

3. Commencement of AML Obligations for Lawyers:

The implementation of the AML/CTF regime for lawyers in Australia will occur in a phased manner. While the Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024 was enacted in late 2024 ², the substantive obligations for lawyers providing designated services will commence on July 1, 2026 ¹. This commencement date applies specifically to tranche two entities, which include lawyers, accountants, and real estate professionals, when they are providing new designated services ¹. However, in preparation for these obligations, law firms will be able to enrol with AUSTRAC, the regulatory body responsible for overseeing AML/CTF compliance, from March 31, 2026 ¹. This early enrolment period is intended to allow newly regulated entities to begin the administrative processes required under the new regime. It is important to note that despite the formal commencement date being in 2026, significant preparatory work will be necessary for law firms to ensure they are compliant by this time ⁴. This includes understanding the new obligations, developing and implementing an AML/CTF program, and training staff.

The considerable timeframe between the passage of the Amendment Act in 2024 and the commencement of the main obligations in July 2026 provides a critical window for Australian law firms to prepare for these significant regulatory changes ¹. This lead time acknowledges the substantial effort required for firms, many of which are unfamiliar with AML/CTF compliance, to understand the new legal landscape, develop tailored compliance programs that meet the specific requirements of their practice, and conduct comprehensive training for their staff ¹. This extended preparation period aims to facilitate a more effective and less disruptive transition for the legal profession. Allowing enrolment with AUSTRAC to commence a few months prior to the full obligations taking effect from March 31, 2026 ¹, serves as an initial, practical step in the compliance journey. This early access to the enrolment process likely allows AUSTRAC to manage the influx of new reporting entities more efficiently and provides law firms with an opportunity to become familiar with AUSTRAC’s online systems ⁸ and complete this preliminary administrative task before the main compliance deadline.

4. Defining Designated Services for Lawyers:

The AML/CTF Act, as amended, specifies a range of legal services that are now classified as “designated services,” triggering AML obligations for lawyers who provide them ². These services include:

• Assisting clients in the buying, selling, or transferring of real estate ².
• Assisting clients in the buying, selling, or transferring of legal entities such as companies or trusts ².
• Receiving, holding, controlling, or managing clients’ funds and/or property, which can include money, accounts, securities, or other assets. It is important to note that exceptions may apply, such as when the payment is solely for the lawyer’s or firm’s legal fees ².
• Facilitating the sale or transfer of a shelf company ².
• Carrying out certain transactional work, including equity and debt financing ².
• Assisting in the creation or restructuring of a legal entity or legal arrangement ².
• Acting, or arranging for another person to act, as a director, partner, trustee, or pursuant to a power of attorney ².
• Acting, or arranging for another person to act, as a nominee shareholder ².
• Providing a registered office address or principal place of business ².

It is crucial to understand that not all legal services provided by lawyers will fall under these new AML obligations. The focus is primarily on transactional work that carries a higher inherent risk of being exploited for money laundering purposes ³. Therefore, lawyers must carefully review the specific services they offer against the defined list of designated services to determine if their practice will be subject to the AML/CTF regime as a reporting entity ².

The scope of designated services is extensive, encompassing a wide array of common legal activities, which suggests that a significant portion of the Australian legal profession, particularly those involved in areas such as property law, corporate and commercial law, and trusts and estates, will likely be subject to the new AML/CTF regime ². This broad definition indicates the government’s intention to cover a substantial range of legal services that could potentially be used to facilitate illicit financial activities. Furthermore, the explicit inclusion of services like acting as a director, trustee, or nominee shareholder underscores a specific focus on preventing lawyers from being utilized as intermediaries in complex financial arrangements designed to conceal the origins of illegal funds ². These roles inherently involve a level of control or management over assets or entities, making them potentially attractive to individuals seeking to launder money or finance terrorism.

Table 1: Summary of Designated Services for Lawyers

Category	Specific Services
Property Transactions	Assisting clients to buy, sell, or transfer real estate
Entity Transactions	Assisting clients to buy, sell, or transfer legal entities; Selling or transferring a shelf company; Creating or restructuring a legal entity or legal arrangement
Funds Management	Receiving, holding, controlling, or managing clients’ funds and/or property (e.g., money, accounts, securities, or assets)
Transactional Work	Carrying out some transactional work, including equity and debt financing
Fiduciary/Nominee Roles	Acting (or arranging for another person to act) as a director, partner, trustee, or pursuant to a power of attorney, etc.; Acting (or arranging for another person to act) as a nominee shareholder
Registered Office Services	Providing a registered office address or principal place of business

5. Step-by-Step Compliance Obligations for Lawyers:

• 5.1. Enrolment with AUSTRAC:
  Lawyers who provide any of the designated services will be required to enrol with AUSTRAC, the primary regulator for AML/CTF in Australia, and will be considered reporting entities under the Act 1. This enrolment process is scheduled to commence on March 31, 2026 1. It is anticipated that enrolment will be conducted through AUSTRAC’s online platform, AUSTRAC Online, which allows reporting entities to manage their details and submit necessary reports 8. Law firms are advised to regularly check the AUSTRAC website and communications from their relevant Law Societies for specific guidance and updates regarding the enrolment procedure 7.
  Enrolling with AUSTRAC is the fundamental first step for any law firm that determines it provides designated services, as it formally establishes the firm as a regulated entity under the AML/CTF framework ⁸. This registration is not merely an administrative formality; it is a prerequisite for accessing AUSTRAC’s resources, including the online portal for submitting various compliance reports and receiving important regulatory updates. By enrolling, law firms enter the regulatory ecosystem and become accountable for meeting their AML/CTF obligations. This initial step lays the groundwork for all subsequent compliance activities and ensures that AUSTRAC can effectively supervise the legal sector’s adherence to the new regulations.

• 5.2. Developing an AML/CTF Compliance Program:
  A core obligation for reporting entities is to develop and maintain a comprehensive AML/CTF program that is specifically tailored to the nature, size, and complexity of their business 1. This program must be a documented framework outlining how the law firm will identify, mitigate, and manage the risks of money laundering, terrorism financing, and proliferation financing that it may reasonably face 1. Key components of the AML/CTF program include:

• Risk Assessment: A thorough and regularly updated assessment of the specific money laundering, terrorism financing, and proliferation financing risks relevant to the firm’s clients, the designated services it provides, its service delivery channels, and the jurisdictions in which it operates ¹.
• AML/CTF Policies and Procedures: Clearly defined policies, procedures, systems, and internal controls designed to effectively manage and mitigate the risks identified in the risk assessment and to ensure ongoing compliance with all AML/CTF obligations ¹.
• Governance Arrangements: The establishment of appropriate governance structures, including oversight and approval of the AML/CTF program by the firm’s board or senior management ¹.
• Appointment of an AML/CTF Compliance Officer: The designation of a senior-level individual within the firm who will be responsible for overseeing the implementation, management, and ongoing effectiveness of the AML/CTF program. For sole practitioners, this responsibility can be undertaken by the individual themselves ¹.
• Employee Due Diligence: Procedures for conducting due diligence on employees or contractors who will be performing AML/CTF functions to assess any potential risks ⁸.
• AML/CTF Training: A program to provide regular and relevant training to all employees to ensure they understand the risks of money laundering and terrorism financing, their obligations under the AML/CTF regime, and the firm’s policies and procedures ².
• Independent Review: A process for an independent evaluation of the AML/CTF program to be conducted at least once every three years to assess its effectiveness and identify any areas for improvement ⁸.

The AML/CTF program must be documented in writing, approved by senior management, and kept up-to-date to reflect any significant changes in the firm’s operations or the prevailing risks ¹⁰. The regulatory approach emphasizes a risk-based methodology, requiring firms to move beyond a mere “check-box” approach to compliance and instead implement measures that are proportionate to the specific risks they face ¹.The development of a tailored AML/CTF program represents a significant undertaking for law firms, particularly those without prior experience in this area ⁶. This process requires a strategic and well-resourced approach to ensure the program effectively addresses the specific risks associated with the firm’s practice. The shift towards a risk-based approach necessitates that law firms conduct a thorough analysis of their unique risk profile ¹. This involves considering not just the types of designated services offered but also the nature of the firm’s client base, the geographical locations involved in transactions, and the methods used to deliver services. The program must then be designed to implement controls and procedures that directly address these identified risks, ensuring that the firm’s AML/CTF framework is both effective and proportionate to the level of risk it faces.

• 5.3. Customer Due Diligence (CDD):
  Lawyers providing designated services will be obligated to conduct Customer Due Diligence (CDD) on their clients before providing these services and on an ongoing basis throughout the business relationship 1. CDD involves several key steps 1:

• Identifying the customer and verifying their identity, as well as identifying and verifying the identity of any beneficial owners ¹. This includes collecting information such as name, date of birth, and address, and using reliable and independent sources to verify this information ⁷.
• Understanding the nature and purpose of the business relationship with the client ⁸.
• Assessing the potential risks of money laundering, terrorism financing, and proliferation financing associated with providing designated services to the client ¹.
• Conducting ongoing monitoring of the client’s transactions and activities throughout the business relationship to detect any unusual or suspicious behavior ², including transaction monitoring ².
• Applying Enhanced Due Diligence (EDD) measures for clients assessed as high-risk, such as politically exposed persons (PEPs) or clients from high-risk jurisdictions ⁸.
• In certain low-risk scenarios, Simplified Due Diligence (SDD) measures may be applied ¹.

Initial CDD must be completed before a designated service is provided to a client, unless specific exceptions apply ⁸. For clients who were engaged before the commencement of the new obligations, CDD may be triggered if the firm is required to file a suspicious matter report in relation to the client or if there is a significant change in the nature or purpose of the business relationship that results in the client being assessed as medium or high risk ¹⁰.Implementing effective CDD procedures will necessitate significant adjustments to how law firms onboard new clients ². This will involve a more rigorous collection and verification of client information, as well as a deeper understanding of the reasons behind their instructions. Furthermore, the requirement for ongoing monitoring and transaction analysis signifies a continuous obligation to assess and manage risk throughout the client relationship ². Law firms will need to establish systems and processes to regularly review client information, monitor transactions for unusual patterns, and update risk assessments as necessary ⁷.

• 5.4. Reporting Obligations:
  As reporting entities, lawyers providing designated services will have several reporting obligations to AUSTRAC 1. These include:

• Suspicious Matter Reports (SMRs): These must be submitted to AUSTRAC when a lawyer has reasonable grounds to suspect that a transaction or client activity may be related to criminal activity, the proceeds of crime, or terrorism financing, or if they suspect that a client is not who they claim to be ¹. The threshold for reporting a suspicious matter is notably low and broad ².
• Threshold Transaction Reports (TTRs): These reports are required for any transaction involving physical currency of AUD 10,000 or more ⁵.
• International Value Transfer Service (IVTS) reports: These reports are necessary for all transactions involving the transfer of value into or out of Australia ¹.
• Cross Border Movement (CBM) reports: These reports are required when a person physically moves AUD 10,000 or more in cash or bearer negotiable instruments into or out of Australia ¹⁰.
• Annual Compliance Reports: Reporting entities may also be required to submit an annual report to AUSTRAC summarizing their compliance with the AML/CTF obligations throughout the year ⁹.

It is crucial to report suspicious matters to AUSTRAC promptly upon forming a suspicion ¹⁹. Furthermore, there is a strict prohibition against “tipping off” a client that a suspicious matter report has been, or is being, filed ¹, although some reforms to this offence have been introduced ¹.The obligation to report suspicious matters introduces a significant point of consideration for lawyers, who are traditionally bound by strong duties of client confidentiality ². Balancing this ethical duty with the legal requirement to report suspicious activities, even on a low threshold, will necessitate careful judgment and comprehensive training within law firms. The various reporting requirements also underscore the need for law firms to establish robust internal systems for identifying, documenting, and submitting the necessary information to AUSTRAC ⁸. This will likely involve training staff to recognize the indicators of suspicious activity and to understand the specific reporting formats and timelines for each type of report.

• 5.5. Record-Keeping Requirements:
  Reporting entities, including lawyers, are legally required to maintain accurate and complete records relevant to their AML/CTF obligations for a minimum period of seven years 1. These records must include 7:

• All documentation and information obtained during the customer due diligence process, including client identification and verification records ⁷.
• Details of all transactions related to the designated services provided ⁷.
• Records pertaining to the firm’s AML/CTF program, such as risk assessments, policies, procedures, training materials, and reports of independent reviews ⁷.
• Copies of any reports submitted to AUSTRAC, including SMRs, TTRs, IVTS reports, and CBM reports ⁷.

These records must be stored in a manner that ensures they are readily accessible for audit purposes and potential investigations by AUSTRAC or other law enforcement agencies ²². Records can be maintained in either physical or electronic format, provided that their security and integrity are maintained in compliance with relevant privacy regulations ¹⁹. It is important to be aware of the interaction between these AML record-keeping requirements and the obligations under the Privacy Act ².The seven-year record retention period will necessitate that law firms have adequate storage capacity and well-organized record management systems in place ¹⁹. This includes ensuring both physical and digital records are securely stored and easily retrievable when needed for compliance reviews or regulatory inquiries. Law firms will need to develop clear protocols for how records are created, indexed, stored, and eventually disposed of, adhering to both AML/CTF and privacy legislation. The need to comply with the Privacy Act while fulfilling AML record-keeping obligations means that law firms must carefully consider how they collect, use, and store personal information ². This requires establishing procedures that not only meet the AML/CTF requirements for record retention but also adhere to the Privacy Act’s principles regarding data minimization, security, and individual rights. Small legal practices that were previously exempt from the Privacy Act will now need to ensure their record-keeping practices align with these broader privacy obligations ².

6. Interaction of AML Obligations with Legal Professional Privilege:

The Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024 includes specific provisions to clarify the interaction between AML obligations and Legal Professional Privilege (LPP) ¹. The legislation explicitly states that it does not abrogate LPP, and the right to refuse to provide information subject to LPP is preserved ¹. The common law doctrine of LPP remains unchanged under the amended Act ¹⁰. Importantly, a reporting entity is not required to file a suspicious matter report if they reasonably believe that the information relevant to the suspicion is subject to LPP ¹⁸. However, if AUSTRAC requests information or documents and a person refuses to provide them on the basis of LPP, they are required to submit a prescribed LPP Form to the AUSTRAC CEO, outlining the grounds for the privilege claim ². This form will be made available on the AUSTRAC website at a later date ¹⁰. It is important to note that submitting an LPP Form is only required when refusing to provide information directly to AUSTRAC; there is no obligation to submit this form if an SMR has not been filed ¹⁸. Furthermore, providing a description of the information or document to AUSTRAC does not, in itself, constitute a waiver of LPP ¹⁸. Ministerial guidelines will be issued at a future date to provide further details on the process for managing and resolving assertions and claims of LPP ¹⁰.

The explicit recognition and protection of LPP within the amended AML/CTF Act offer a degree of assurance to the legal profession that their fundamental duty to maintain client confidentiality will be respected ¹. However, the introduction of the requirement to submit a specific LPP form when a lawyer refuses to provide information to AUSTRAC based on privilege represents a new procedural step that law firms will need to incorporate into their compliance processes ². This formal process likely aims to provide AUSTRAC with a clear record of why information is being withheld and to allow for a structured approach to addressing any disputes regarding the applicability of LPP. The fact that the prescribed LPP form is not yet available and that further guidance will be provided through Ministerial guidelines ¹⁰ indicates that the practical aspects of managing LPP claims within the AML/CTF regime are still being finalized. Law firms should proactively monitor AUSTRAC’s website and other relevant channels for the release of the LPP form and the issuance of the Ministerial guidelines to ensure they are fully prepared to comply with the specific procedures for asserting legal professional privilege under the new AML/CTF framework.

7. Privacy Act Considerations for AML Compliance:

It is important to note that small legal service providers that become reporting entities under the AML/CTF Act will also be required to comply with the Privacy Act 1988 when handling personal information collected for AML/CTF compliance purposes, even if they were previously exempt from this Act ². This creates an intersection between the obligations to collect and retain personal information for AML purposes and the requirements under the Privacy Act regarding the protection and handling of such information ². Law firms will need to ensure their processes and procedures adequately address both sets of regulatory requirements, particularly in relation to data security, the rights of individuals regarding their personal information, and the scope of information collected and retained ². This may require adapting existing client management and data handling practices to meet the standards of both AML/CTF compliance and the Privacy Act.

The extension of Privacy Act obligations to small legal firms that were previously exempt adds a significant layer of regulatory complexity for these entities ². These firms will need to gain a thorough understanding of their responsibilities under the Privacy Act, which governs the collection, use, disclosure, and security of personal information. This includes implementing appropriate data protection measures, ensuring transparency with clients about how their information is being used for AML/CTF purposes, and establishing processes to handle client requests regarding their personal data. The need to balance the specific data retention and reporting requirements of the AML/CTF Act with the broader principles of privacy protection will require careful consideration and the development of integrated compliance strategies.

8. AUSTRAC Guidance and Ongoing Developments:

AUSTRAC is committed to supporting reporting entities, including law firms, in understanding and meeting their new AML/CTF obligations. To this end, AUSTRAC will be developing and releasing various guidance materials and educational resources to facilitate a smooth transition to the new regime ¹. It is anticipated that more detailed guidance on the core obligations and their practical implementation will be released throughout 2025 ⁷. Furthermore, AUSTRAC released the first Exposure Draft of the revised AML/CTF Rules on December 11, 2024, with a period for public consultation that closed on February 14, 2025 ⁴. A second round of consultation on these Rules is expected to follow in early 2025 ¹⁶. These AML/CTF Rules provide the specific details and practical application of the broader obligations outlined in the AML/CTF Act ¹. AUSTRAC is currently engaging in consultations with industry stakeholders on the content of these guidance materials, which will aim to clarify how reporting entities can effectively meet their obligations and will also detail the various tools and resources available to them ⁴. Additionally, AUSTRAC will be developing specific guidance to assist reporting entities in implementing the initial customer due diligence requirements ⁸. For businesses, including law firms, seeking to determine whether they will be subject to the new AML/CTF regime, AUSTRAC has made available an online tool called “Am I regulated?” ¹⁶. AUSTRAC is also in the process of developing guidance materials for entities that are already regulated under the existing AML/CTF regime to help them understand the changes to their obligations under the amended Act ¹⁷.

The ongoing process of consultation and the development of detailed guidance by AUSTRAC indicate that the regulatory framework for AML/CTF compliance in the legal sector is still in a formative stage ¹. Law firms should actively monitor AUSTRAC’s website and participate in any future consultations to stay abreast of the latest developments and to provide feedback that can help shape the final form of the regulations and guidance. The detailed guidance expected from AUSTRAC in 2025 will be crucial for providing law firms with the practical insights needed to implement the new AML/CTF obligations effectively ¹. This guidance is likely to cover a range of essential topics, including methodologies for conducting risk assessments, step-by-step procedures for customer due diligence, detailed explanations of reporting requirements, and best practices for maintaining the necessary records. Law firms should prioritize reviewing these materials as they become available to ensure they have a clear understanding of the specific actions they need to take to achieve compliance.

9. Preparing for Compliance: Key Steps for Law Firms:

Given the impending commencement of the new AML obligations, Australian law firms should begin taking proactive steps to prepare for these changes ². Key actions that firms can undertake include:

• Review Your Practice: Conduct a thorough assessment of all the services your firm provides and compare them against the list of designated services to determine if you will be classified as a reporting entity under the amended Act ².
• Stay Informed: Regularly monitor the websites and communications of AUSTRAC, the Law Council of Australia, and your state Law Society for updates on AML reforms, including any new consultations, guidance materials, and rules ². Consider registering directly with AUSTRAC to receive updates ⁵.
• Familiarize Yourself with Key Obligations: Gain a comprehensive understanding of the core AML/CTF obligations, including enrolment, developing an AML/CTF program, conducting customer due diligence, meeting reporting requirements, and adhering to record-keeping standards ². Explore existing training resources offered by AUSTRAC ⁵.
• Consider Risk Assessment: Begin the process of thinking about how to assess the specific risks of money laundering and terrorism financing that your firm might face, taking into account your client base, the types of services you offer, your service delivery methods, and the jurisdictions you deal with ². Start gathering relevant data about your firm’s operations ³.
• Familiarize Yourself with CDD Principles: Research and understand the best practices for conducting customer due diligence, including the procedures for verifying client identities and understanding the structures of your client entities ².
• Nominate a Compliance Leader: Identify a senior-level individual within your firm who will be responsible for leading the development and implementation of your AML/CTF program ¹.
• Training and Education: Explore available training programs and resources on AML/CTF compliance for your staff ². Be aware of resources offered by your Law Society, such as courses and webinars ⁴.
• Review and Update Practice Management Systems: Evaluate your current practice management systems to determine how AML/CTF requirements can be effectively integrated, particularly in areas such as client onboarding, matter management, and record-keeping ¹⁹.
• Consider Technological Solutions: Investigate potential technological solutions, such as AML software, that can assist with various aspects of compliance, including client verification, risk assessment, and ongoing monitoring ¹⁹.
• Engage with Professional Bodies: Utilize the resources and support provided by the Law Council of Australia and your state Law Society, including any dedicated hotlines or online hubs for AML/CTF inquiries ².
• Prepare for a Risk Assessment: Start considering the four key elements that AUSTRAC advises firms to think about when assessing their risk: the types of customers you have, the designated services you will provide, how you will provide those services, and the jurisdictions you will be dealing with ⁵.

Taking these preparatory steps well in advance of the July 1, 2026, commencement date is crucial for ensuring a smooth and effective implementation of the new AML obligations ². Delaying these preparations could lead to significant challenges, increased pressure, and a higher risk of non-compliance.

10. Conclusion:

The Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024 will introduce significant new obligations for Australian lawyers providing designated services, commencing on July 1, 2026. These obligations encompass enrolling with AUSTRAC, developing and implementing a tailored AML/CTF compliance program, conducting thorough customer due diligence, adhering to reporting requirements for suspicious matters and certain transactions, and maintaining comprehensive records. While the amended Act provides clarity on the treatment of Legal Professional Privilege, law firms must also be mindful of their responsibilities under the Privacy Act. The regulatory framework is still under development, with AUSTRAC actively consulting on and preparing detailed Rules and Guidance to assist the legal profession in meeting these new requirements. It is imperative that Australian law firms begin preparing now to ensure they are ready to meet these obligations by the commencement date, thereby contributing to the strengthening of Australia’s AML/CTF regime and protecting the community from the serious threat of financial crime.

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