What's changing?
What is changing for Australian legal practitioners?
From 1 July 2026, solicitors providing designated services, along with other tranche II entities, will be classified as reporting entities under the Anti-Money Laundering and Counter-Terrorism Financing (AML CTF) Act.
This means that from 1 July 2026, these newly designated reporting entities will be required to comply with AML CTF obligations, namely:
- To identify, assess, and understand the specific money laundering and terrorism financing risks associated with their business operations; and
- Implement appropriate measures to mitigate those risks, in proportion to their assessed risk level.
What will you 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
- Conduct risk assessments to identify and understand the money laundering and terrorism financing risks specific to your practice
- Carry out customer due diligence (CDD), including procedures for verifying client identity and maintaining compliance with Know Your Customer (KYC) and Know Your Employee (KYE) requirements
- Establish and maintain an AML CTF program, which outlines your approach to compliance. This program must be supported by internal policies, procedures, systems, and controls that manage risk and ensure compliance with the AML CTF Act and Rules and should include both internal compliance management policies as well as externally focused policies for mitigating and managing risk
- Provide certain reports to AUSTRAC i.e. reporting specific transactions and suspicious activities to the relevant authorities as required by law
- Meet record-keeping obligations to demonstrate ongoing compliance with AML CTF requirements
- Appoint an AML CTF Compliance Officer — a senior, Australian-based individual who is a fit and proper person, and who has sufficient authority, independence, and access to resources to effectively carry out compliance responsibilities
The Act
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 be required to start complying with additional obligations (the new AML CTF obligations).
Australia’s new AML CTF regime requires entities by the regime to:
- Identify, assess and understand money laundering (ML), terrorism financing (TL) and proliferation financing (PF) risk unique to their practice; and
- Take appropriate measures to mitigate such risks (according to the level of risk identified).
What will be the key legislative provisions?
AUSTRAC has prepared a Future Compilation of the AML CTF Act as a resource. That resource shows the text of the Act as it is expected to read as at 1 July 2026, including the amendments made by the AML CTF Amendment Act 2024 (Cth). It is not an authorised version and further changes may be proposed and made to the law before the expected amendments commence.
The key legislative provisions are expected to be:
- 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
- AML CTF Rules Chapter 1, Part 12 – Politically exposed person (PEP)
Relevant legislation and resources
- 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
- AUSTRAC’s Future Compilation of the AML CTF Act Resource
- Commonwealth Attorney-General’s Second Reading Speech
