AML/CTF Hub

Guidance for NSW solicitors on AML/CTF obligations, compliance requirements and risk management for legal practices.

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Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) regulatory regime is undergoing one of its most significant transformations in decades

With the expansion of obligations to new professional sectors and industries in the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act), legal practitioners are preparing for a new generation of compliance expectations. For the past two decades, Australia’s AML/CTF regime has primarily applied to banks, financial institutions and the gambling sector. Following amendments to the AML/CTF Act in December 2024, a broader range of professional services, including lawyers, providing ‘designated services’ will become ‘reporting entities’ and have compliance obligations from 1 July 2026 (Tranche 2 reforms). 

By 1 July, AUSTRAC has stated that newly captured legal practices are expected to:  

  • Have an AML/CTF program 
  • Have an AML/CTF compliance officer  
  • Have trained their staff on the AML/CTF program and internal processes, 
  • Be ready to engage with clients and report suspicious matters. 

AUSTRAC Program Starter Kits

For most legal practices, the Program Starter Kits (Starter Kits) can be adopted and implemented as a compliant AML/CTF program. The two most relevant Starter Kits for the legal profession are the Legal Profession Starter Kit and the Conveyancing Starter Kit. These are part of a suite of Starter Kits for newly regulated entities, including lawyers, accountants, real estate professionals, and precious metals and stones dealers.

 

Implementation Guides now available

 

Sole practitioners and small practices  

The Law Society of NSW AML/CTF Implementation Guide: for sole practitioners and small practices is designed to complement AUSTRAC’s Starter Kits. It helps legal practices move from theory to implementation by providing: 

  • Practical, sector‑specific guidance, produced by lawyers, for lawyers 
  • Tips, templates and examples to save time  
  • Where relevant, guidance on navigating AML/CTF compliance alongside obligations arising under the Privacy Act and the Legal Profession Uniform Law  
  • Guidance on operating and maintaining an AML/CTF program over time. 
 

Medium and large practices

The Law Society of NSW AML/CTF Implementation Guide: for medium and large practices is intended to help practices design and implement bespoke AML/CTF programs to suit the scope, nature and complexity of their work.

The Guide includes:

  • a suitability assessment tool, to help practices determine the degree to which the Starter Kits can be adapted to suit their practice
  • a risk assessment guide that may be adapted or used as a reference point
  • suggestions on how to demonstrate compliance with the AML/CTF framework.

FAQs

The Anti-Money Laundering and Counter-Terrorism Act 2006 provides the means to deter, detect and disrupt ML, TF and PF.

Money laundering (ML) is the process by which illegally obtained funds are given the appearance of being legitimate. It has 3 layers:

  • Placement – illegal funds or assets are placed in the financial system eg bank account
  • Layering – illegal funds or assets are moved or disguised to distance the proceeds from the original crime eg placing funds into a solicitor's trust account
  • Integration – once the illegal funds are distanced from the origin, they are used to fund further criminal activity or to purchase high-value assets such as real estate and luxury goods making those funds seem legitimate

Terrorism financing (TF) is the funding of acts, individuals and organisations associated with terrorism.

Proliferation financing (PF) is the financing of illegal activities intended to facilitate the creation and supply of weapons of mass destruction, whether the activities occur or are just attempted.

“Tranche 2” reforms refer to the Commonwealth Government’s expansion of Australia’s Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) regime to include gatekeeper professions – certain professional service providers such as lawyers, conveyancers, accountants, real estate agents and precious stone and metal dealers – that provide a “designated service”, as defined by Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) (AML/CTF Act). See FAQ 5 below for more information about designated services.

The Commonwealth Government wants to strengthen Australia’s AML/CTF regime so that it continues to effectively deter, detect and disrupt money laundering, terrorism financing and proliferation financing. The regime is based on international standards set by the global financial crime watchdog, the Financial Action Task Force (FATF). FATF will be conducting an assessment of Australia’s compliance with the international standards in 2026-2027. 

The Program Starter Kits are anticipated to provide significant assistance to practices in relation to:  

  • Conducting the required ML/TF risk assessments
  • Applying appropriate AML/CTF policies. 

A law practice that provides one or more designated services will be considered a “reporting entity” and have obligations under the AML/CTF Act. AUSTRAC has developed a tool to help you determine whether you provide a designated service.  

Designated services are defined under section 6 of the amended AML/CTF Act.  

They include certain services, such as 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.  

AUSTRAC provides further details in its Professional Services Core Guidance on what it considers in and out of scope for professional services. 

AUSTRAC has also created a tool to help users determine if they will be regulated.  

You will become a reporting entity on 31 March 2026. From this date, you can enrol with AUSTRAC (see FAQ 10, below).  

1 July 2026 (a summary of your AML/CTF obligations is at FAQ 9, below).

The Professional Services Core Guidance provides further details on what AUSTRAC considers are ‘in scope’ and  ‘out of scope’. It is also a good idea to refer to AUSTRAC’s website, which has information to help reporting entities navigate the reforms. 

Generally, reporting entities will need to: 

You can find more details on AUSTRAC’s webpage.   

You can enrol with AUSTRAC from 31 March 2026. Once you have enrolled, you will be given an AUSTRAC online account. You must enrol with AUSTRAC within 28 days of providing a designated service. For most solicitors who provide designated services, this means you will need to enrol with AUSTRAC by 29 July 2026.  

If you know you provide a designated service, we recommend you enrol early, so you can receive relevant information from AUSTRAC.   

No, you do not. Registration is an additional step, only relevant for entities who are a remittance network provider, independent remitter or virtual asset service provider.    

The AML Compliance Officer (AMLCO) has to: 

  • Be an Australian resident  
  • Be a fit and proper person  
  • Be employed or engaged at management level 
  • Have sufficient authority, independence and access to information and resources to undertake their role effectively.  

The AMLCO must, among other things, oversee and coordinate:  

  • The practice’s day-to-day compliance with the AML/CTF legislative scheme 
  • The effective operation of, and compliance with the practice’s AML/CTF policies.  

The AMLCO can be employed internally, or be otherwise engaged by the law practice. They can also have other roles.  

Yes, if you provide a designated service, you will need to designate an AMLCO. If you are a sole practitioner, or in a senior management position at your practice, it can be you. See FAQ 12, above, for more information on what is required of an AMLCO.  

There are several places we recommend you go to get up to date on the reforms.  

  • AUSTRAC’s website, which has information about the AML/CTF reforms
  • Explore our complimentary courses on AML/CTF. We particularly recommend our most recent offering, ‘Preparing your practice for Australia’s AML/ CTF regime’. You can claim CPD points on all of our LawInform courses
  • Explore resources, links to background papers, current legislation and complimentary AML/CTF CPD courses across the Hub.  

We have also prepared a resource, Getting Ready for AML/CTF: Suggested steps to prepare for compliance .

To support small businesses, AUSTRAC is currently developing a Program Starter Kit  (Starter Kit) for small businesses. According to AUSTRAC, the Starter Kit will provide an AML/CTF program for a typical low complexity small business. Larger firms can use the Starter Kit as a baseline for their own AML/CTF compliance.   

The Starter Kit should provide significant assistance to practices in relation to:  

  • Conducting the required ML/TF risk assessments 
  • Applying appropriate AML/CTF policies to its legal practice. 

We anticipate that, for many firms, particularly smaller practices, the Starter Kit will provide a compliant AML/CTF program, with minimal adjustment required.  

To be effective, legal practices will still need to make sure the Starter Kit is  appropriate for their practice, and that it is properly implemented.  

Use of the Starter Kit is not mandatory, but it is recommended.  

The Starter Kit is expected to be released and available to download from AUSTRAC’s website in early 2026.   

We will continue to update this AML/CTF Hub with information as it becomes available to us. 

No. The AML/CTF reforms do not require you to engage an external entity. While you can outsource your compliance obligations, you cannot outsource your liability under the AML/CTF Act. 

There are private entities that provide services to assist reporting entities to comply with their AML/CTF obligations. These are usually referred to as ‘AML solution providers’ or ‘RegTechs’. Often, these providers use technology to assist with compliance.  

If you do engage, or intend on engaging, an AML solution or other provider to assist you with compliance, you may wish to refer to the following AUSTRAC resources: 

Please also see FAQ 18.  

Yes, you can. The AML/CTF regime allows you to outsource your functions under the AML/CTF either on a one-off or on-going basis.  

However, AUSTRAC has made clear that outsourcing to a third party is not a substitute for understanding the money laundering (ML) or terrorism financing (TF) risks of your practice. AUSTRAC has also warned that reporting entities may incur ML/TF risk as well as AML/CTF compliance risk if the outsourced service provider:  

  • Does not tailor its services to your practice’s unique ML/TF risks 
  • Lacks the expertise or resources to conduct the relevant AML/CTF functions on your behalf 
  • Is unaware of the legal restrictions on information sharing under the AML/CTF Act 
  • Is not subject to adequate oversight and monitoring during the arrangement. 

This means, for example, that while you can outsource certain functions relating to your compliance with the AML/CTF Act, such as client due diligence or employee due diligence, you will remain liable to AUSTRAC if that work is not undertaken properly.  

Before engaging with an AML solutions provider, you may wish to review the following AUSTRAC resources: 

The AML/CTF Act contains protections for client legal privilege (CLP). AUSTRAC’s guidance states that the AML/CTF Act ‘doesn’t affect the right of a person to refuse to give information where that information would be privileged from being given or produced on the grounds of [legal professional privilege] LPP’.   

If some of the information you are required to give to AUSTRAC is subject to LPP, and you withhold information on this basis, you will be required to submit an LPP form.  

You will not be required to submit an LPP form if all the information that make up the grounds of suspicious in a suspicious matter report is subject to LPP.  

You can review AUSTRAC’s guidance on LPP for more information.  

Please also see our guidance on CLP, Protecting your clients’ claim to client legal privilege.

The Australian Solicitors’ Conduct Rules, in particular rule 9.22, allow a solicitor to disclose information which is confidential to a client, if the solicitor is compelled by law to disclose it.  

We strongly recommend that you start preparing now. The following resources may be particularly helpful:  

You may also wish to review our resource, ‘Getting ready for AML/CTF: Suggested steps to prepare for compliance’. 

Yes! Please contact the Law Society’s Professional Support Unit for guidance either at amlctf@lawsociety.com.au or on (02) 9926 0249.  

In addition, you may wish to contact AUSTRAC on 1300 021 037, or submit a query online to AUSTRAC’s Contact Centre. 

Contact the AML/CTF Hotline

Professional Support Unit
(02) 9926 0249
amlctf@lawsociety.com.au
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