Written by: David Rule, Solicitor
The Australian legal landscape is undergoing significant changes with the introduction of this new Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2024.
Earlier this year, Attorney-General, Mark Dreyfus announced a crackdown on money laundering in Australia. Professional service providers including lawyers, accountants and real estate agents will soon be required to ask more detailed questions about your financial affairs.
In this article, we will look at current money laundering laws and the changes you can expect when dealing with your legal service provider.
Australia’s Anti Money Laundering Laws
Money laundering disguises the origin of illicit funds to make these funds appear legitimate. Anti money laundering (AML) laws are regulations designed to prevent and detect the conversion of these illegally obtained funds into seemingly legitimate assets.
In Australia, these laws are primarily governed by the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act).
Why AML Laws Need to Be Revised
The current anti-money laundering law doesn’t include lawyers, accountants, and real estate professionals. Because of this, we see recurring cases of prominent solicitors charged with money laundering and fraud.
Transparency International Australia’s chief executive, Serena Lillywhite noted Australia as the “destination of choice” for shuttling money into illicit funds. The current law isn’t strong enough to prevent this from happening.
Potential Negative Effects on Australians
Money laundering has a broader impact on Australian communities. It may be part of the reason so many Australians are struggling to get into the property market.
Lillywhite said: “It can reasonably be argued that it [money laundering] is driving up property prices in Australia and locking many Australians out of owning their own home.”
The Sydney Morning Herald confirmed this in a report stating, “alleged Chinese-Australian money laundering organisation that moved an estimated $10 billion offshore while amassing a blue-chip Sydney mansion property portfolio.”
The New Anti Money Laundering Amendment in Australia
The new anti money laundering legislation will expand the AML/CTF regime to include lawyers and accountants, who were previously excluded as “professional service providers”.
The amendment is set to take effect from March 31, 2026, with full compliance required by July 2026. These reforms will bring Australia in line with international standards. For example, New Zealand has had this system in place for some time.
What to Expect Working with Lawyers Under the New Amendment
The new amendment to anti money laundering laws may affect how you interact with your legal representatives.
As a client, you may notice changes in how law firms handle your matters, particularly regarding financial transactions.
You may experience:
- More detailed questioning about your financial affairs
- Requests for additional documentation to verify the source of funds
- Potential delays in transactions as law firms conduct necessary checks
- Increased transparency in financial matters related to legal services
While these changes might seem intrusive, they’re designed to protect the integrity of Australia’s financial system and prevent criminal activities.
How to Prepare for AML Changes to Legal Services
As the anti-money laundering amendment rolls out, you can expect your law firm to communicate any new requirements well in advance.
They may ask you to provide more information upfront or to update your existing client details.
Being prepared and understanding the reasons behind these requests will help streamline your interactions with your legal representatives.
Keep reading for more detailed tips on how to prepare for these changes.
Anticipate More Questions from Lawyers
Here are the key aspects of the anti money laundering reform that may affect your legal transactions.
Know Your Client (KYC)
Your lawyer may ask more detailed questions about the source of your funds for transactions. This is a standard practice in many countries and helps prevent financial crimes.
These questions may delay the transaction commencing which might cause frustrations if your relevant documents are not easily available.
Real Estate Transactions
If you’re buying or selling property, expect more thorough checks, even for no-consideration transactions (where no money is changing hands, like intra-family gifts) or when dealing directly with developers.
Business and Share Transfers
The sale of businesses or company shares will fall under the new regime, requiring additional due diligence.
Suspicious Matter Reporting
Lawyers may be obligated to report suspicious transactions. However, legal professional privilege will still protect your confidential communications in most cases.
It is important to note that confidentiality and privilege are different, and, while privilege may be protected, confidentiality may not. If you are not certain on the difference, contact us to find out.
Gather Identity Documents in Advance
If you are considering entering into a transaction that might be high-risk, get all of your “ducks in a row” ahead of time.
Before meeting with a legal professional, consider taking the following steps to prepare.
- Collate your identity documents
- Order new copies of identity documents if you have misplaced your existing copies
- Cancel lost cards
- Take steps to ensure your identity is easily verified and not easily compromised
Ask your legal representative for further updates
Remember, these new obligations apply to law firms, not to you as a client.
Your lawyer’s goal remains the same: to provide you with the best legal service while also complying with these new regulatory requirements.
By staying informed and cooperating with these new processes, you’ll be supporting Australia’s efforts to combat financial crime while ensuring your legal matters are handled efficiently and in compliance with the law.
Want to Know More About the Anti-Money Laundering Amendment?
If you have further questions or concerns about the AML amendment, chat with one of our expert legal professionals. (07) 5444 1022
Disclaimer:
The information contained in this article is for general informational purposes only and is not intended to provide legal advice or substitute for the advice of a professional. This information does not consider your personal circumstances and may not reflect the most current legal developments. Should you need advice, please contact our firm for targeted information relating to personal your situation.
Greenhalgh Pickard’s Conveyancing Team
