What Australian Lawyers Need to Know About the New AML/CTF Laws
From 1 July 2026, lawyers providing certain legal services will be subject to Australia's Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) regime. If you’re advising on or acting in transactions involving real estate, creating or restructuring companies, trusts or other legal arrangements, or holding client funds, this will likely apply to you.
This article outlines the key changes, what they mean for legal practitioners, and how to prepare.
Why the Change?
Australia’s AML/CTF laws are being expanded to bring lawyers into the regulatory net. International standards, particularly from the Financial Action Task Force (FATF), require countries to include “designated non-financial businesses and professions” like lawyers, accountants, and real estate agents.
Lawyers are often involved in high-value financial transactions—settlements, corporate restructuring, or trust establishment. These can be misused to hide or move illicit funds. The reforms aim to plug that gap.
What’s the Legislative Status?
The new provisions—commonly referred to as “Tranche 2”—have been passed by Parliament but don’t take effect for lawyers until 31 March or 1 July 2026, depending on the activity. For convenience, we refer to them here as “the New Act.”
The detailed rules (subsidiary legislation) are still in draft. They’ll set out critical definitions and carve-outs, so watch this space.
What Services Are Covered?
The Act applies to “designated services”. For lawyers, these include:
Assisting or acting for someone buying or selling real estate
Assisting or acting for someone creating or restructuring companies or legal arrangements
Providing a registered office or principal place of business address for someone else
Managing client money, property, or virtual assets
Assisting or acting for someone raising equity or debt finance
Acting as (or arranging) a nominee director, shareholder, trustee or attorney for someone else
But a service is only “designated” if it’s provided in the course of business, and not pursuant to a court or tribunal order (with some exceptions).
In broad terms, if you provide any of these services on or after 1 July 2026, you’ll be a reporting entity and subject to AML/CTF obligations.
The detail as to “designated services” is set out in Table 6 in Section 6 of the New Act. It’s so important that we’ve put Table 6 on our website. However, the wording is confusing and what precisely is meant by “assisting” and “acting for” is still being debated. AUSTRAC will be providing further guidance about the meaning of the wording around designated services by the end of 2025.
What Will Lawyers Need to Do?
By 1 July 2026, lawyers who provide designated services will need to:
Enrol with AUSTRAC – the financial intelligence agency
Appoint a Compliance Officer – someone in management, like a partner or senior employee
Create an AML/CTF Program – explaining how your firm will manage risk
Perform Client Due Diligence (CDD) – verify client identity and assess risk
Report suspicious matters to AUSTRAC – even if no transaction occurs
Maintain records – including identity checks, risk assessments, and reports
These are not one-off obligations. Your program must be reviewed and updated regularly to reflect new risks and services. Periodic compliance reports will likely be required as well.
Will This Apply to Litigators?
We don’t know how far the new rules will apply to litigators. There are carve-outs for some transactions if it is pursuant to, or resulting from, an order of a court or tribunal.
There are also carve-outs for barristers if they are briefed by solicitors who are reporting entities.
What About Barristers?
Barristers won’t be required to enrol with AUSTRAC if they’re acting on a solicitor’s instructions. However, the rules may still apply to them in rare cases where they provide services independently.
What About Legal Professional Privilege?
The Government has indicated it intends to protect legal professional privilege. Exactly how that will work under the New Act remains to be seen once the rules and guidance are released.
What Are the Penalties?
AML/CTF breaches can carry serious penalties. Recent examples include:
Westpac – $1.3 billion
Crown Melbourne & Crown Perth – $450 million
TAB – $45 million
Those penalties are clearly significant. Penalties for smaller firms are much smaller – often they seem to be in the range of $3,000 to $20,000.
For small or mid-size firms, even a civil penalty of $20,000 can have significant consequences. A potentially greater problem for lawyers might be the professional consequences of failing to comply with the New Act.
What Should You Do Now?
Although we feel it’s too early to implement detailed compliance systems—because the final rules aren’t yet in place—now is a good time to:
Understand how lawyers might be unknowingly involved in money laundering, and the red flags
Understand which of your services are likely to be captured
Allocate resources and consider who you might appoint as a compliance officer (even informally)
Start thinking about how AML/CTF obligations could be integrated into your workflows
We recommend that firms begin practical planning by September 2025.
What are AUSTRAC’s expectations?
On 3 July 2025, AUSTRAC set out its expectations – https://www.austrac.gov.au/austrac-regulatory-expectations-implementation-amlctf-reforms
AUSTRAC said that “For those businesses who will come under regulation next July, AUSTRAC expects that by 1 July 2026, you will:
be enrolled as a reporting entity. You will be able to access the online enrolment system from 31 March 2026
have an AML program, either because you have adopted the starter program provided by AUSTRAC or have developed your own. The starter program will be available in December 2025
have an AML/CTF Compliance Officer
have trained your staff on your AML/CTF program and processes
be ready to ask clients questions and report suspicious activity.”
We’re Here to Help
We’re a law firm with deep experience in financial services and AML/CTF regulation—we’ve been working in this space since 2010. We’ll continue to provide updates as more information becomes available. We’re a small firm, and we understand the realities of small firm practice.
If you'd like to receive our AML/CTF updates, please email us at amlctf@halseys.com.au and we’ll add you to our mailing list. We’ll be covering lots of practical issues for law firms.
Other Resources
You can connect with Fiona Halsey on LinkedIn, or join the LinkedIn AMLCTF Group for Australian Lawyers. You might enjoy watching some of our short videos, which are the Essentials for Lawyers series (you can access these through LinkedIn from Fiona Halsey’s profile). If you have questions, you can send those to us at amlctf@halseys.com.au – if they have broad application we will consider covering those in a video (we won’t identify you).
Summary Only
This article is a summary only and you should not make decisions on the basis of this article – you should obtain legal advice.