After an 18-year delay, Australia is finally moving to expand its Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML Act). The law, which currently applies to banks, casinos, and financial institutions, was always meant to extend to other professionals like lawyers and accountants—and now, that long-overdue change is happening.
A new amendment is in its first consultation phase, and if passed, it will significantly impact the legal profession.
Here’s what lawyers and law firms need to know.
What’s Changing?
The proposed amendment introduces eight categories of ‘Designated Services’, meaning any lawyer or firm offering these services will be subject to AML obligations.
The Designated Services at a Glance:
- Real property transactions – Conveyancing, real estate contracts, settlement documents.
- Transfer of legal entities (M&A) – Handling transactions for buying, selling, or restructuring legal entities.
- Managing securities, digital assets, and funds – Holding or transferring money, assets, and property for clients (excluding trust account fees).
- Raising capital or debt finance – Setting up companies, structuring transactions.
- Entity formation and management – Creating, operating, or managing legal structures for clients.
- Acting as a director, trustee, or under Power of Attorney.
- Arranging nominee shareholders.
- Providing a business address for clients.
In short, these rules will sweep across contract, property, and commercial law, affecting thousands of lawyers and firms across Australia.
What Does This Mean for Lawyers?
Once covered by the AML Act, law firms will need to adopt new compliance measures, including:
- Registering with AUSTRAC as a reporting entity.
- Conducting risk assessments on every client and matter.
- Developing internal AML policies and staff training programs.
- Performing Know Your Client (KYC) checks, including identifying beneficial owners and sources of funds.
- Reporting suspicious transactions to AUSTRAC.
- Maintaining extensive records of risk assessments and client due diligence.
These obligations are entirely new to the legal industry. Lawyers will now have to ask clients detailed financial questions—such as identifying major donors to charities or assessing whether board members are politically exposed persons (PEPs).
Why Now?
Australia has been lagging behind global standards in anti-money laundering laws. If it doesn’t act soon, it risks being blacklisted, which could cripple financial and commercial relationships with the international community.
However, the new requirements will also come at a cost—even small conveyancing firms may find themselves burdened with significant compliance obligations.
What’s Next?
The proposal is in its first consultation phase, and changes are expected before it becomes a bill. But one thing is clear: lawyers will soon have a new role in the fight against money laundering.
We will keep you updated as developments unfold – stay tuned!
Please get in touch with Warlows Legal today using the contact information below.
