Changes are afoot for Australia’s laws for combatting money laundering and terrorism financing. From 1 July 2026, real estate professionals and professional service providers, including accountants and lawyers, will be subject to new requirements when carrying out high-risk services. To minimise the inevitable regulatory burden, affected professionals are encouraged to engage in public consultation relating to the yet to be finalised rules that will support these laws. Consultation is open until 14 February 2025.
What is the AML/CTF regime and its objectives?
The Anti-Money Laundering and Counter-Terrorism Financing Act 2006 and its related legislation (AML/CTF regime) is part of government and industry efforts to combat financial crime, terrorism financing and money laundering.
The AML-CTF regime obliges ‘reporting entities’ to detect, mitigate and prevent financial crime. Examples of ‘reporting entities’ include those providing financial services (including but not limited to banks and insurers), and the bullion and gambling sectors. Under the regime, the entities report to AUSTRAC and must perform initial and ongoing customer due diligence, monitor and report suspicious financial actions, have an AML/CTF program and retain accurate records.
Extending the reach of the AML-CTF regime
The AML-CTF regime already applies to accountants and lawyers who provide financial services. However from 1 July 2026 the AML-CTF regime will extend to further services that these and other professionals carry on in their businesses under changes introduced by the Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024. Examples of services affected include:
- real estate transactions
- sales of businesses and shares
- creating and restructuring companies
- acting as a nominee
- providing a registered office address
- holding monies on trust for clients.
The obvious consequence of these amendments is that a much larger number of professionals will need to comply with the AML-CTF regime. These include legal practitioners, real estate agents, conveyancers, accountants, insolvency and restructuring practitioners, consultants, financial planners, wealth advisors, business brokers, company secretarial service providers, and trust and company service providers.
Minimising the regulatory burden
The changes inevitably mean greater regulatory burden for these professional service providers. However, the full extent of this burden is unclear as details are yet to be finalised.
The Australian Government has opened a public consultation seeking feedback about the proposed content of the Rules. Submissions are due by 14 February 2025 and are encouraged with a view to minimising the regulatory burden.
To find out more the potential impact of changes to the AML/CTF regime, please contact our Commercial Services lawyers.
