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The Government has introduced into Parliament the AML/CTF Bill.

On 11 September 2024, the Commonwealth Attorney-General introduced the Anti-Money Laundering and Counter-Terrorism Financing Amendments Bill 2024 (Bill) into Parliament. The Bill will expand the AML/CTF regime to ‘tranche two’ entities, including solicitors who provide certain services.

Lawyers and other gatekeeper professions, such as accountants and those providing trust and company services, are not currently regulated under the Australian AML/CTF regime.

Certain legal services captured

The Bill makes clear that new anti-money laundering obligations will apply to some legal services (known as designated services). These appear to 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 Bill 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 Bill aims to close the regulatory gap and bring Australia in line with international standards set by the Financial Action Task Force. The reforms will strengthen Australia’s AML/CTF regime and aim to protect the community from serious and organised crime.

When will the obligations for solicitors commence?

Once enacted, 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, there will be some transitional provisions for solicitors captured under the Financial Transaction Reports Act, and considerable preparatory compliance work will need to be undertaken prior to the formal obligations commencing.

Further consultation

Over the coming months, AUSTRAC will consult with industry to develop further some of the rules that will apply to entities who provide designated services.

The NSW Law Society will continue to work closely with the Law Council of Australia 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 Bill, 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, and
• comply with record keeping obligations.

While the rules are yet to be drafted, solicitors should start to familiarise themselves with the obligations under the Bill now. Separately, the NSW Law Society has made available an 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.

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.

Upcoming event: ACAMS webinar – AML Reform – The future of AML/CTF in Australia

Date: October 2 2024 | 5.00 - 6.00 pm
This live webinar is free and hosted by the ACAMS, the largest international membership organisation for Anti-Financial Crime professionals. The session will support those impacted by the AML reforms to start to prepare for what is to come. Register here.

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