Who will be captured by the Act?
Whether a legal practice will be captured by the tranche II reforms (and therefore required to comply with the new AML CTF reporting requirements) depends on whether they deliver a designated service.
Designated services
Designated services are specific activities identified as having higher money laundering and terrorism financing risks. For lawyers, these include services related to:
- Buying, selling, or transferring real estate
- Buying, selling, or transferring legal entities (like companies or trusts)
- Managing client funds, accounts, securities, or other assets (excluding funds held in trust for professional fees or disbursements)
- Creating, operating, or managing legal persons or arrangements
- Acting as or arranging for another person to act as a director, secretary, partner, trustee, or nominee shareholder, or providing a registered office
- Certain corporate finance activities, including equity and debt financing
In some cases, it may be straightforward to identify a designated service. In other situations, further investigation may be needed to determine whether a particular transaction or set of transactions ultimately changes the beneficial owner of property. AUSTRAC has indicated there will be further guidance and examples provided in the guidance material (anticipated to be published in late 2025). In the meantime, AUSTRAC has an online tool you can use to check if you will be regulated.
Further information about this is detailed in Table 6 in section 6 of the new Act (see AUSTRAC’s Future Law Compilation). We have also included additional information about designated services in our FAQs in the Hub.
