Background of the Act
Why are these changes happening?
Solicitors may, whether knowingly or unknowingly, be used to assist in money laundering activities. The new Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Act aims to close the regulatory gap between Australia and other countries, aligning Australia with international standards and fulfilling its obligations under the Financial Action Task Force (FATF) — the global authority on combating money laundering and terrorist financing. These reforms will enhance Australia’s AML/CTF framework and help protect the community from serious and organised crime. Australia is one of the very few countries that have not yet brought lawyers into its anti-money laundering and counter terrorism financing regime despite the profession being a target for such activity.
What criminal activities is the Act trying to capture?
The reforms are intended to capture money laundering, terrorism financing and proliferation financing. Money laundering facilitates a large number of serious crimes, including drug and human trafficking and terrorist activities. Terrorism financing refers to the financing of either terrorist acts, terrorists or terrorist operations. Proliferation financing refers to the financing of illegal activities intended to facilitate the creation and supply of weapons of mass destruction.
Source: NSW Law Society Preparing your practice for Australia’s AMLCTF regime
Overview of the Act
What are the key changes?
From 31 March 2026, solicitors who provide designated services (and other tranche II entities) will become reporting entities under the AML CTF Act. From 1 July 2026, these new reporting entities will have to start complying with additional obligations (new AML CTF obligations for tranche II entities).
Australia’s AML CTF regime requires entities captured by the regime to:
- Identify, assess and understand money laundering and terrorism financing risks unique and specific to their business and to which they are exposed; and
- Take appropriate mitigation measures in accordance with the level of risk identified.
Source – NSW Law Society Preparing your practice course –
What will lawyers need to do to comply with the new AML CTF requirements?
If you are a solicitor providing a designated service, you will need to enrol with AUSTRAC and comply with the new AML CTF obligations, which include:
- Enrol with AUSTRAC
- Undertake risk assessments
- Have, and comply with, an AML CTF program that outlines your approach to complying with anti-money laundering and counter-terrorism financing legislation and is supported by AML policies, procedures, systems and controls that manage risks and ensure their practice complies with its obligations under the AML Act and Rules. Policies must be externally facing risk mitigation and management policies and internal policies that outline compliance management.
- Provide certain reports to AUSTRAC (i.e., reporting specific transactions and suspicious activities to the relevant authorities as required by law)
- Comply with record-keeping obligations (to ensure ongoing compliance with AML/CTF regulatory obligations)
- Appoint an AML CTF Compliance Officer (senior person at management level who is an Australian resident, a fit and proper person and who has sufficient authority, independence and access to resources and information to perform their AML CTF compliance functions effectively)
- Carry out customer due diligence (i.e. implement and maintain procedures for customer identification and verification to ensure compliance with due diligence obligations (customer due diligence (CDD) and know your client (KYC) obligations))
Source – NSW Law Society, Preparing your practice course.
What are the key provisions of the Act?
- Section 6 –definition of designated services (what services are captured by the regime)
- Sections 26C and 26D – requirements for AML CTF risk assessments (what must be considered)
- Section 26F – requirements of AML CTF policies (what must your policies cover, and related requirements, e.g. review and training)
- Section 26B – What is an AML CTF compliance program and what must it include
Resources - Legislation
- AUSTRAC’s Future Compilation of the AML CTF Act
Please note that the link shows the text of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) as it is expected to read at 1 July 2026, including the amendments made by the AML/CTF Amendment Act 2024 (Cth). While this is a useful compilation created by AUSTRAC, please be aware that it is not an authorised version, and further changes may be proposed and made to the law before the expected amendments commence.) - Anti-Money Laundering and Counter-Terrorism Financing (AMLCTF) Amendment Act 2024
- Federal Register of Legislation (AMLCTF Amendment) Act 2024
- Anti-Money Laundering and Counter-Terrorism Financing Act 2006
- Financial Transactions Reports Act 1988
Risk and Vulnerabilities of the Legal Profession
In late 2023, the Law Council of Australia commissioned an independent expert to analyse the vulnerabilities of the Australian legal profession. The report of the analysis is available to read here.
On 9 July 2024, AUSTRAC released a National Risk Assessment that provides information on Australia’s threat environment and the methods that criminals use to launder the proceeds of crime or fund extremist violence.
