From 31 March 2026, law firms providing designated services are subject to AML/CTF regulation.

By 1 July 2026, regulated law firms must:

• have an AML/CTF program;

• have an AML/CTF compliance officer;

• train staff on their program, internal processes, and ML/TF risks; and

• be ready to comply with the Act's requirements and report suspicious matters.

Key aspects of compliance include client identification and record-keeping, which law firms already systematise as part of their existing procedures. Integrating those procedures into an AML/CTF plan means law firms can ease the burden of compliance.

For LEAP users, LEAP's partner InfoTrack is leading the development of a complete AML/CTF Compliance Centre designed specifically for the Australian regime. This solution will integrate seamlessly into LEAP, ensuring that compliance becomes a natural part of the firm's existing workflow.

The Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024 (Cth) (the amending Act) expands the categories of reporting entities under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (the Act) to include:

• real estate professionals; 

• dealers in precious metals and precious stones; and 

• professional service providers, including lawyers, conveyancers, accountants, and trust and company service providers. 

These new participants are referred to as tranche 2 entities.

The main provisions of the amending Act commenced on 31 March 2026.

The new Anti Money Laundering and Counter Terrorism Financing Rules 2025 (the Rules) also commenced on 31 March 2026.

Tranche 2 entities must enrol as reporting entities with the regulator, the Australian Transaction Reports and Analysis Centre (AUSTRAC) by 1 July 2026.

Enrolment is open now.

AUSTRAC has a dual role as Australia’s AML/CTF regulator and financial intelligence unit. Its mandate is to disrupt money laundering, terrorism financing, and other serious crimes.

AUSTRAC ensures regulated businesses comply with their obligations under the Act, including the obligation to have systems and controls that manage ML/TF risks.

Only law firms providing designated services are regulated.

Designated services include:

• assisting clients to buy, sell, or transfer real estate;

• assisting clients to create, buy, sell, transfer, or restructure a legal arrangement;

• receiving, holding, controlling, or managing client funds or property;

• appointing a person, or acting as, a director or secretary of a company, power of attorney for a legal arrangement or body corporate, partner in a partnership, trustee of an express trust or any equivalent position;

• appointing a person, or acting as, a nominee shareholder of a legal arrangement or body corporate;

• providing a registered office address or principal place of business for a legal arrangement or body corporate;

• handling a person’s money, accounts, securities, virtual assets or other property to help a person plan or execute a transaction.

A legal arrangement includes an express trust, partnership, joint venture, unincorporated association, or other legal arrangement.

Law firms can determine if they are a tranche 2 entity by using AUSTRAC's online tool: Check if you’ll be regulated.

If regulated, firms need to prepare their AML/CTF program by:

• conducting a risk assessment;

• thinking about how to monitor transactions;

• preparing policies;

• subscribing to receive updates from AUSTRAC; and

• Enrolling as a reporting entity with AUSTRAC.

See AML/CTF Reform on the AUSTRAC website for more information, including toolkits specifically designed for small/medium firms. 

AUSTRAC expects tranche 2 entities by 1 July 2026 to:

• be enrolled as a reporting entity;

• have an AML/CTF program either of their own design or using an AUSTRAC starter program;

• designate at least 1 senior manager to be responsible for approving their AML/CTF program;

• appoint an AML/CTF compliance officer, being an appropriate person in management;

• train their staff on the program and their internal policies and processes; and

• be ready to comply with their obligations under the Act.

From 1 July 2026 regulated firms are required to:

• undertake an ML/TF risk assessment on their firm and keep it up to date;

• keep their AML/CTF policies and procedures up to date;

• conduct customer due diligence (CDD) on every client and for every new matter;

• comply with reporting requirements; and

• maintain appropriate records.

Initial customer due diligence requirements include:

• if the customer is an individual, taking reasonable steps to establish they are who they claim to be, including if they are a politically exposed person as defined in the Act;
• identifying the customer's ML/TF risk;
• collecting information about the customer appropriate to ML/TF risk; and
• verifying the customer information using independent and reliable data that is appropriate to ML/TF risk.

Ongoing CDD requires regulated firms to monitor their clients to appropriately identify, assess, manage, and mitigate the ML/TF risks they may reasonably face in providing services. This includes reviewing and updating client information, and monitoring for unusual transactions and behaviours that may trigger a requirement to lodge a report.

Simplified CDD is permissible in certain circumstances if the client's ML/TF risk is low and other requirements are met. 

Enhanced CDD must be applied in certain prescribed, high-risk circumstances. Regulated firms need to collect and verify additional information relevant to mitigating the identified higher risk and be reasonably satisfied that they know and understand their client's identity.

See Enhanced customer due diligence (ECDD) program on the AUSTRAC website.

Regulated firms must have internal policies for AML/CTF that cover:

• how the firm will identify and report on the ML/CT risks it faces;

• designating an AML/CTF compliance officer;

• designating a senior manager responsible for approving any changes to the ML/TF risk assessment or AML/CTF policies;

• how the firm will undertake due diligence on staff whose role may allow them to facilitate serious financial crimes or whose role is relevant to AML/CTF compliance;

• how the firm will provide risk awareness and management training to staff;

• how, and when, to conduct an independent review of its AML/CTF program; and

• any other matters provided for in the Rules.

Regulated firms are required to report certain transactions and suspicious activities to AUSTRAC. Reports that may be required include:

• Suspicious matter reports, if the firms suspects on reasonable grounds that a person is not who they claim to be, or that a matter is linked to criminal activity or the proceeds of crime. See Suspicious matter reports on the AUSTRAC website for more information.

• Threshold transaction reports for individual physical currency transactions of $10,000 or more.

• International value transfer service reports for certain international transfers.

• Cross-border movement reports if carrying physical currency or bearer negotiable instruments valued at A$10,000 or higher into or out of Australia.

• Annual compliance reports.

Section 242 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 already provides that it does not affect the law relating to legal professional privilege. The amending Act provides stronger protections for the disclosure of information or documents that are subject to legal professional privilege, reflecting the fact that lawyers are now included in the regime.

See Schedule 4 and Clear protections for legal professional privilege on the AUSTRAC website.

Offence

The amending Act creates a new offence of 'tipping off', intended to prevent a reporting entity from disclosing information to their client, such as the fact that they have made a suspicious matter report, if it could reasonably prejudice an investigation.

See Schedule 5 of the amending Act and Tipping off on the AUSTRAC website.

After 1 July 2026, AUSTRAC will conduct enforcement operations against tranche 2 entities that:

• wilfully ignore the obligation to enrol; or
• are complicit with, or wilfully blind to, money laundering activities.

See the following pages on the AUSTRAC website:

• Legal profession guidance | AUSTRAC

• Summary of AML/CTF obligations for tranche 2 entities.

• Education about reforms – a series of webinars.

• Future Law Compilation of the AML/CTF Act.

By Lawyers publications will be amended as required to account for these changes. Specific amendments will include First steps in all commentaries, the Conveyancing guides in each jurisdiction, and the Practice Management guide.