Why are these changes happening?
Whether knowingly or unknowingly, solicitors may be used to assist in money laundering activities. The new 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 very few countries that have not yet brought lawyers into an AML CTF regime, despite the profession being a target for such activity.
Background - AML CTF reform in Australia
The AML CTF Act was first introduced in 2006 and phased in over two years. This initial phase (tranche I) was primarily focused on the financial sector, gambling sector, and bullion dealers.
Further reforms (known as tranche 1.5) were introduced in 2021 to expand the AML CTF regime. The most recent amendments aim to strengthen the financial system against criminal threats by expanding the regime to include other high-risk services, including lawyers, accountants, real estate agents and other gatekeepers to the financial system (tranche II reforms). These reforms have 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 on the AUSTRAC AML CTF Reform website.
