AML/CTF Reform: What is it?
In November 2024, the Federal parliament passed legislation to expand Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) scope to include property transactions, in response to the challenges serious and organised crime places on the economy.
The updated AML/CTF framework is designed to better prevent, detect and disrupt money laundering and terrorism financing, while aligning to global standards.
What does it mean for lawyers and conveyancers?
From 1 July 2026, the reform will require lawyers and conveyancers who facilitate the sale and purchase of a property to have an AML/CTF program that specifies how they will carry out due diligence for buyers and sellers during their transaction.
Any risk of money laundering must be reported to AUSTRAC, Australia’s financial intelligence unit and AML/CTF regulator.
The way the requirements are designed mean you will need to verify the identity of your clients and ensure that the money they are using in the in the transaction comes from legitimate sources.
Understand your obligations
We recommend you start to develop internal policies and procedures to ensure full compliance when the obligations begin.
AUSTRAC has developed a series of e-learning modules that can help you understand your obligations and what you will need to do.
There are eight modules that apply to you. Each one takes about 25 minutes to complete and can be done at your own pace
Part of the obligations are to ensure all employees who work in roles that you have identified pose a ML/TF risk must complete risk awareness training. The AUSTRAC e-learning modules aren’t a replacement for this training.
Who else is affected?
The AML/CTF regime will extend to services identified by the Financial Action Task Force as high-risk for money laundering and terrorism financing.
With property transactions identified as high-risk, real estate agents, buyers’ agents and property developers must also adhere to the AML/CTF regulation from 1 July 2026.
Their obligations will be like yours, meaning there’s multiple checkpoints to ensure suspicious activity is picked up.
Key Obligations Development Process
Registration with AUSTRAC
All conveyancers must register with AUSTRAC under the expanded AML/CTF law. This is expected to be required by 31 March 2026 and you’ll need to provide basic information about your business (structure, key personnel, contact information etc.)
Develop and Maintenance of an AML/CTF program
Firms must develop and maintain a comprehensive AML/CTF program tailored to their specific practices.
This program needs to include:
- A thorough risk assessment of the money laundering, terrorism financing, and proliferation financing risks associated with the services you offer and your clients.
- Establishing, documenting and implementing policies to mitigate and manage these risks and ensure compliance with AML/CTF obligations.
- The appointing of a dedicated AML/CTF compliance officer.
Enhance Due Diligence
The reform imposes stricter due diligence requirements, through more comprehensive identity checks, risk assessments and verifying source of funds as well as scrutinizing and large and unusual transactions. This enhanced due diligence is part of a risk-based approach critical for complying with AML regulations.
Reporting to AUSTRAC
Firms will be obligated to report certain transactions and suspicious activities to AUSTRAC. This includes reporting any transaction or activity that appears suspicious, such as unusual payment methods, complex or large transactions with no clear legitimate purpose, or clients avoiding verification. Suspicious transactions must be reported within three business days, and suspected terrorism financing must be reported immediately.
Record Keeping
For a minimum of seven years, you must keep records of:
- Identity verification documents.
- Client due diligence assessments.
- Transaction details.
- Communications related to client due diligence and transactions.
- Records of submitted reports to AUSTRAC.
- AML/CTF program documentation and training records.
- Results of independent reviews of the AML/CTF program.
Legal Professional Privilege
The Amendment Act clarifies the treatment of LPP. Lawyers claiming LPP over certain client information must submit a dedicated LPP form to AUSTRAC instead of the privileged information.
PEXA is sharing this information to help spread the awareness of these big changes facing the conveyancing industry and it should be treated as informational.
We encourage you to visit the AUSTRAC website to find out more about your obligations.
PEXA evaluating ways to help
The Federal Government has included in the legislation provisions to allow Australia’s e-conveyancing network (which is classified as critical national infrastructure) to be leveraged to support the new laws. PEXA recognises that the anti-money laundering and counter terrorism financing regime is important in safeguarding the integrity of our financial system.
With collaboration and guidance from industry bodies and AUSTRAC, we intend to determine the best way to leverage the PEXA Exchange to support our customers.
More information will be shared over the coming months.
