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New anti-money laundering and counter-terrorism financing legislation is in force 

On 10 December 2024, the Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024 (Cth) (the new AML/CTF Act) received Royal Assent.

The new AML/CTF Act brings about significant reform to the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) and the Australian AML/CTF regime. 

The three main objectives of the new AML/CTF Act are to: 

• extend the AML/CTF regime to certain higher-risk services provided by real estate professionals, professional service providers including lawyers, accountants and trust and company service providers, and dealers in precious stones and metals—also known as ‘tranche two’ entities, 
• improve the effectiveness of the AML/CTF regime by making it simpler and clearer for businesses to comply with their obligations, and
• modernise the regime to reflect changing business structures, technologies and illicit financing methodologies.

Practitioners (as well as other gatekeeper professions) that provide a designated service (defined in the new AML/CTF Act) will be  regulated under the new AML/CTF Act from 2026.

The new Act also repeals the Financial Transaction Reports Act 1988 (FTR Act) on 7 January 2025, at which stage solicitors will no longer be regulated under the FTR Act. 

Certain legal services captured

The new AML/CTF Act makes clear that new anti-money laundering obligations will apply to some legal services (known as designated services). These  include services assisting clients to:

• buy, sell or transfer real estate,
• buy, sell or transfer legal entities,
• receive, hold, control or manage their funds and/or property, for example, money, accounts, securities or assets,
• sell or transfer a shelf company,
• carry out some transactional work, including equity and debt financing, and
• create or restructure a legal entity or legal arrangement.

The new AML/CTF Act also captures services where the solicitor:

• acts (or arranges for another person to act) as a director, partner, trustee, or pursuant to a power of attorney, etc,
• acts (or arranges for another person to act) as a nominee shareholder, and
• provides a registered office address or principal place of business.

Why are the changes happening?

Solicitors can sometimes either wittingly or unwittingly be used to facilitate money laundering. The new AML/CTF Act closes the regulatory gap and brings Australia in line with international standards set by the Financial Action Task Force. The reforms will strengthen Australia’s AML/CTF regime and protect the community from serious and organised crime.

When will the obligations for solicitors commence?

There will be staged commencement for solicitors who provide designated services. Solicitors will be required to assess the services they provide and any associated money laundering and terrorism risks and enrol with the regulator (AUSTRAC).

The obligations for solicitors providing a designated service will broadly commence in July 2026. However, captured solicitors should be aware that considerable preparatory compliance work will need to be undertaken prior to the formal obligations commencing.

Public consultation on new AML/CTF Rule 

On 11 December 2024, AUSTRAC released the first Exposure Draft AML/CTF Rules and is seeking feedback by 14 February 2025.  This will be followed by the release of the second Exposure Draft. The draft AML/CTF Rules set out the specific requirements for reporting entities as well as exemptions.  

In addition, in 2025, AUSTRAC will be consulting with industry on guidance material, which will contain information about how reporting entities can meet their obligations.  It will also set out the tools available to captured entities. 

The NSW Law Society continues to work closely with the Law Council of Australia and AUSTRAC to try and ensure the regulatory impact to the profession is minimised as much as is practicable, and provide further guidance for solicitors.

What can solicitors providing a designated service do now?

Under the new AML/CTF Act, solicitors providing a designated service will be required to put in place a comprehensive set of measures including:

• enrol with AUSTRAC,
• develop, and comply with, an AML/CTF compliance program,
• carry out customer due diligence,
• provide certain reports to AUSTRAC, 
• comply with record keeping obligations, and 
• appoint an AML/CTF Compliance Officer

While the AML/CTF Rules and Guidance are yet to be finalised, solicitors should start to familiarise themselves with the obligations under the new AML/CTF Act now. 

To assist solicitors, the Law Society of NSW has made available a complimentary on-demand interactive course that informs practitioners on how they can strengthen their practice against money laundering and terrorism financing based on their existing legal and ethical obligations.

The Law Society has also released two webinars featuring AML/CTF experts discussing the effect of AML/CTF reforms on solicitors and what the experience has been in other jurisdictions. Solicitors can register for this complimentary webinar here. 

Dedicated hotline for AML/CTF inquiries

The Law Society’s Professional Support Unit has been expanded to include a new dedicated hotline specifically to assist practitioners with AML/CTF related inquiries. Practitioners with AML/CTF inquiries can call (02) 9926 0249 or email amlctf@lawsociety.com.au for information.

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