Anti-Money Laundering and Counter-Terrorism Financing Reform
In November 2024, Parliament passed a bill to amend the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act), which will extend the regime to include certain high-risk services provided by lawyers and other professionals.
From 31 March 2026, new services and entities will begin coming under AUSTRAC regulation following these reforms.
The extension of the AML/CTF regime to lawyers, accountants, real estate agents, and other ‘gatekeepers’ to the financial system (Tranche 2) has been under consideration by the Federal Government since 2007.
During 2023 and 2024, the Federal Government undertook consultations on the reforms, which are intended to align with Australia’s obligations to the Financial Action Taskforce (FATF), the global money laundering and terrorist financing watchdog.
Further information about the reforms is available at the AUSTRAC AML/CTF Reform website.
Law Society of Western Australia and Law Council of Australia advocacy efforts
The Law Society is assisting the Law Council of Australia in representing the interests of the national profession regarding legislative reforms.
The Law Society is engaging with stakeholders and members through the following channels:
- Establishment of an ad hoc advisory committee on AML/CTF;
- Representation on the Law Council of Australia’s dedicated AML/CTF Working Group, and
- Representation on AUSTRAC’s Rules and Guidance Working Group.
The Law Council’s submission to the October 2024 consultation, to which the Society contributed, can be read here.
The Society will continue to support the profession in readiness for the implementation of the reforms by providing access to resources and guidance developed by the Law Council of Australia. The Society is also delivering Continuing Professional Development sessions, to build the understanding and capability of the legal profession to ensure the integrity of their practices.
How to Prepare for the AML/CTF Regime
AUSTRAC Reporting Obligations
Further information about the reforms is available at the AUSTRAC AML/CTF Reform website.
Lawyers and firms should familiarise themselves with their current AUSTRAC reporting obligations.
Law Council of Australia Resources
The Law Council of Australia has released guidance for the legal profession on steps that can be taken now to mitigate the risk of exposure to money laundering and terrorism financing. The primary audience is solicitors whose legal practices involve transactional work, including the holding, investment, and disposal of clients’ funds, as these are the main areas of risk.
It is important to note that the guidance does not reflect practitioners’ obligations under the incoming AML/CTF statutory regime.
The guidance can be accessed below:
- Overview
- Guidance Note No. 1 – Why Should I Care About Money Laundering and Terrorism Financing?
- Guidance Note No. 2 – What Does the Criminal Law Currently Provide, and What Are My Cash Reporting Obligations?
- Guidance Note No. 3 – What Are My Professional Obligations?
- Guidance Note No. 4 – What Does Money Laundering Look Like?
- Guidance Note No. 5 – What Does Terrorism Financing Look Like?
- Guidance Note No. 6 – How Do I Identify and Assess My Risk?
- Guidance Note No. 7 – How Do I Mitigate and Manage My Risk?
- Guidance Note No. 8 – How Do I Undertake Client Due Diligence?
- Guidance Note No. 9 – How Do I Ascertain Source of Funds?
- Guidance Note No. 10 – How Do I Check Whether Someone is a PEP?
- Guidance Note No. 11 – Ceasing or Declining to Act
- Workshop Notes for Identifying and Assessing Risk – Example
- Workshop Notes – Case Studies
- Red Flags List for Legal Practitioners
Law Society CPD Seminars
Introduction to Anti-Money Laundering
Watch the webinar recorded by the Australian Capital Territory Law Society which provides an overview of the AML/CTF regime and the proposed Tranche 2 reforms.
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.