From 1 July 2026, if you engage a lawyer, real estate professional, or accountant, you may need to provide detailed personal and corporate information that is not currently required.  

What detailed information will you be required to provide?

By way of example, if you engage a firm of lawyers (and/or other prescribed entities - see list of reporting entities below) on specific types of matters (see list of designated services below), you will be required to provide extensive and detailed documentation to prove:

1. your identity;

2. if a company:

   1. details of the entity;

   2. the identity of company directors;

   3. the identity of company shareholders and unit holders in trusts, and if they hold the shares via trust, details of the trustee and the nominated beneficiaries;

3. If a trust or if a shareholder in an entity is a trustee of trust:

   1. the terms that govern the trust; and

   2. the beneficiaries of trust.

You will be required to provide the above documentation to comply with the strict obligations imposed on reporting entities, which obligations include:

1. Enrolling the reporting entity with Australia’s AML/CTF regulator, the Australian Transaction Reports and Analysis Centre (AUSTRAC);

2. Conducting client due diligence (CDD) to understand the client and potential risks.  Reporting entities have an obligation to undertake initial CDD, ongoing CDD, enhanced CDD and simplified CDD;

3. Reporting certain transactions and suspicious activities including suspicious matter reports, threshold transaction reports, international value transfer service reports, cross border movement reports and submit an annual compliance report.

What is the impact of these changes for clients?

Our experience with similar existing regimes internationally (for example, the UK) is that complying with these requirements is cumbersome and time-consuming for reporting entities and their clients, requiring not only documentation but also formal certifications.

Why are these changes being introduced?

On 10 December 2024, the Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024 (Cth) (Act) received assent, which amends the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth).  These reforms are aimed at closing the regulatory gap and bringing Australia in line with international standards set by the Financial Action Task Force, a global money laundering and terrorist financing watchdog.

The reforms affecting lawyers (and other reporting entities) will apply from 1 July 2026.  

Reporting entities - What entities do the reforms apply to?

These reforms aim to regulate services that are recognised as being high-risk for money laundering exploitation.  Reporting entities include:

1. lawyers;

2. conveyancers;

3. accountants;

4. trust and company service providers (which, according to the Financial Action Task Force, is a business that provides services including company formation, trust administration, providing registered office addresses, acting as director, secretary or partner, nominee shareholder);

5. real estate professionals; and

6. dealers in precious metals and stones.

Designated services – What services do the reforms apply to?

The new requirements apply when reporting entities provide the following services:

1. Real estate and conveyancing services

   1. brokering the sale, purchase or transfer of real estate; 

   2. selling or transferring real estate without an independent real estate agent; or

   3. assisting you with planning or transacting to buy, sell or transfer real estate.

2. Legal arrangements, trust and company services

   1. acting on your behalf or assisting you on the purchase, sale or transfer of ownership of a legal entity where you have or will have a beneficial ownership of at least 25% or control over the legal entity; 

   2. receiving or holding money, accounts, securities or security accounts, digital assets (including private keys), other assets or property as part of acting on behalf or assisting you in executing a transaction;

   3. acting on your behalf or assisting you with organising, planning or executing a transaction for equity or debt financing relating to a legal entity;

   4. selling or transferring a shelf company;

   5. acting on your behalf or assisting you with planning or executing creating or restructuring a legal entity; or

   6. drafting documents or performing tasks to appoint a director or shareholder of a company.

3. Precious metals, stones, and product services

   1. accepting or paying $10,000 or more in physical currency or digital assets for precious metals, precious stones or precious products – this includes jewellery or accessories made of, or having precious metals or precious metals attached, to you, in the course of carrying on a business.

Next steps for the regime

AUSTRAC will provide further guidance in 2025, including by:

1. providing guidance on the scope of the new designated services, the core obligations and how they can be practically implemented by reporting entities; and

2. developing AML/CTF starter kits for reporting entities.  

AUSTRAC is expected to release a second exposure draft of the Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (No. 1) (the Rules) in early 2025.  The Rules are subsidiary legislative instruments made under the Act and provide detail for the reporting entities’ broader obligations under the Act.

Article current as at 2 April 2025.