Anti-Money Laundering and Counter-Terrorism Financing
Resource Knowledge Centre

Last Updated: 28 February 2025

Why are changes being implemented?

Anti-money laundering and counter-terrorism financing (AML/CTF) legislation is designed to protect Australia's financial system and national security. It aims to prevent criminals from using the legal profession and other sectors to launder the proceeds of crime or finance terrorist activities. These laws are also crucial for meeting Australia's international obligations and maintaining its reputation in the global financial system. The legislation recognises that certain professions, including legal practitioners, can be vulnerable to exploitation by those seeking to conceal illicit funds.

The Federal Attorney-General’s Department (AGD) is responsible for the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 which currently regulates the financial, gambling, and bullion sectors.

The AGD is implementing reforms to strengthen the AML/CTF regime, ensuring it is fit-for-purpose, responds to the evolving threat environment, and meets international standards set by the Financial Action Task Force (FATF), the global financial crime watchdog and standard-setter. If Australia falls behind global standards, it risks being "grey listed" by the FATF, resulting in increased monitoring and economic repercussions.

The Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2024 passed Parliament on 29 November 2024. This will have the effect of extending the regime to the legal profession. It is intended that these laws will commence in 2026.

The Federal Register of Legislation has prepared and published a current AML/CTF Act Compilation that is current as of 7 January 2025. Please note that the Schedule 9 powers are now operational. Importantly, the investigation and (amended) notice provisions in sections 49, 49B and 172A. Those provisions can be applied to any person, not just a ‘reporting entity’.

This below video, presented by Diana Newcombe on 22 October 2024, Chief Executive of the Law Society, provides a clear understanding of the key changes, their impact on existing reporting entities, and the new obligations for businesses entering the AML/CTF regime.

How will this impact legal practitioners?

The AML/CTF regime will impact legal practitioners whose work involves designated services. The 2024 amendments to the AML/CTF legislation by way of the Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Amendment Act 2024 which specifies nine new designated services that are relevant to legal practice. If your work involves any of the following, you will likely be subject to the legislation's requirements:

• Real Estate Transactions: Planning, execution, or acting in a transaction to buy, sell, or transfer real estate.
• Business and Corporate Transactions: Planning, execution, or acting in a transaction to buy, sell, or transfer a body corporate or legal arrangement.
• Management of Funds and Assets: Receiving, holding, and controlling/managing a person’s money, accounts, securities, or virtual assets.
• Corporate Finance: Assisting in organising, planning, execution, or acting in a transaction for equity or debt financing relating to a body corporate or legal arrangement.
• Shelf Companies: Selling or transferring a shelf company.
• Corporate Structuring: Assisting in planning, execution, or acting in the creation or restructuring of a body corporate or a legal arrangement.
• Acting in Key Corporate Roles: Acting as or arranging another person to act as a director, secretary, Power of Attorney of a body corporate, a partner, or a trustee of an express trust.
• Nominee Shareholders: Acting as or arranging another person to act as a nominee shareholder.
• Registered Office Services: Providing a registered office address or principal place of business of a body corporate or legal arrangement.

All practitioners should be aware of the legislation, even if they don't believe their work currently involves designated services. The scope of these services can be broad, and it's crucial to assess your practice carefully.

The key impacts for practitioners providing designated services include:

• Enrolling and registering with AUSTRAC: If you provide designated services, you must enrol with AUSTRAC, and virtual asset service providers must also register.
• Developing and maintaining an AML/CTF program: Creating a tailored AML/CTF program to protect your practice from criminal exploitation and meet your compliance obligations.
• Conducting due diligence: Verifying client identities and assess risks to understand your customers and their transactions. This includes ongoing monitoring of client activity and updating risk profiles as needed.
• Reporting suspicious activities: Reporting certain suspicious transactions and activities to AUSTRAC
• Keeping records: Maintaining comprehensive records for at least 7 years to demonstrate compliance with AML/CTF obligations.

How is the Law Society responding to the changes?

Through representatives on the Law Council of Australia’s dedicated AML/CTF Working Group and law reform submissions to the Law Council of Australia, the Law Society is involved in assisting the Law Council to represent the interests of the national profession in relation to the proposed changes. This includes the maintenance of legal professional privilege, compliance measures which are proportionate and balanced, and ensuring adequate preparation time once legislation is passed.

The Federal Government has taken on board much of the profession’s feedback and the Society expects the proposed reforms to be less burdensome than initially anticipated. The Law Council’s submission to the most recent round of consultation, to which the Society contributed, can be read here. All Law Council submissions can be found here.

The Society is committed to supporting the profession in readiness for the reforms. The AML/CTF Homepage will be continually updated with resources and guidance to assist the profession to familiarise itself with, navigate and respond to the new obligations. Once there is certainty as to the nature and extent of the reforms and their impacts on the profession, CPD sessions will be delivered to ensure firms and practitioners are confident in safeguarding the integrity of their practice.

What steps should legal practitioners be taking now?

AUSTRAC is expected to release further guidance in 2025, providing detailed information on core obligations and practical implementation. While this guidance is still in development, there are steps that practitioners can undertake to prepare for the AML/CTF regime, these include:

• Review Your Practice: Carefully assess the services you provide against the list of designated services above. This is the most critical step in determining your obligations. If you do provide designated services, you will be required to enrol with AUSTRAC.
• Enrol with AUSTRAC: If you determine that you provide designated services, you will need to enrol with AUSTRAC. Monitor the AUSTRAC website and Law Society communications for updates on the enrolment process. This is a mandatory step for those providing designated services.
• Familiarise Yourself with Customer Due Diligence (CDD) Principles: Research best practices for customer due diligence, including verifying identities and understanding client structures.
• Consider Risk Assessment: Begin thinking about how you might assess the risk of money laundering and terrorism financing within your practice.
• Training and Education: Explore available resources and training programs on AML/CTF compliance.
• Stay Informed: Keep up to date with the latest developments regarding the AML/CTF regime. Monitor the Law Society's website and publications for updates, as well as the AUSTRAC website directly.

What can I do now to mitigate my risk of exposure?

Lawyers and firms should familiarise themselves with their current AUSTRAC reporting obligations.

The Law Council of Australia has released Guidance for the legal profession on what it can do now to mitigate risk of exposure to money laundering and terrorism financing. The primary audience is solicitors whose legal practices are associated with transactional work, including the holding, investment, and disposal of clients’ funds because these are the main areas of risk.

It is important to note that the Guidance does not reflect practitioners’ obligations under any anti-money laundering and counter-terrorism financing (AML/CTF) statutory regime.

The Guidance can be accessed under the heading, Law Council of Australia Guidance on the right of this page, or on the Law Council’s website.

What risks should I be aware of?

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 which provides information on Australia’s threat environment and the methods that criminals use to launder proceeds of crime or fund extremist violence.

Have your say

The Law Society of South Australia is committed to representing the interests of legal practitioners in the development of the AML/CTF regime. We encourage all practitioners to share their feedback and concerns regarding the implementation of these changes. Your input is valuable as we work to ensure the legislation is practical and effective for the legal profession in South Australia.

For any questions or to provide feedback about AML/CTF, please contact us at amlctf@lawsocietysa.asn.au.

Law Council of Australia Guidance

• 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

Other Law Societies Resources on AML/CTF

• The Law Institute of Victoria - AML and CTF Hub
• The Law Society of New South Wales - AML/CTF Hub
• Queensland Law Society - Anti-Money Laundering/Counter Terrorism Financing