Anti-Money Laundering / Counter Terrorism Financing

The Anti-Money Laundering/Counter Terrorism Financing (AML/CTF) Act was passed in 2006 as stage one of the Commonwealth Government’s AML reform agenda and imposed an AML/CTF regime on the financial sector, gambling sector and bullion dealers.

In April 2023, the Commonwealth Attorney-General announced that the Attorney-General’s Department (AGD) would commence consultation on reforms to Australia’s AML/CTF regime with a view to streamlining and expanding the regime to include lawyers.

Specifically, it was announced that a major focus of the consultation process would be to widen the scope of the current AML/CTF regime to include lawyers, accountants, trust and company service providers, real estate agents and dealers in precious metals and stones (collectively known as tranche-two entities).

Since that time, the AGD has released two consultation papers and undertaken targeted consultation with stakeholders across all affected sectors as well as government, academics and individuals.

The Law Society has had input and insight into this consultative process through its membership of the Law Council of Australia (LCA) and has worked collaboratively with the LCA and other law societies across Australia in formulating responses to the proposed regime changes.

The LCA has engaged extensively in the consultation process to ensure that any regime implemented is both balanced and proportionate to the real risk posed by money-laundering and counter-terrorism funding within the legal profession. This has included two detailed written submissions to the AGD in response to its consultation papers.

Of major concern and focus of this consultation has been the need to ensure any regime does not impose unnecessary and/or onerous compliance obligations and costs on legal practices and to ensure that vital foundations of our legal system including access to justice and client legal privilege are not weakened.

Copies of the two AGD Consultation Papers and related material on the consultation process can be accessed at the AGD website via this link here.

Copies of the LCA Submissions, reports and other information can be accessed below or at the LCA website via this link here.

The LCA has also recently published detailed Guidance Notes to assist legal practitioners in mitigating the risk of exposure to money laundering or terrorism financing and to raise the level of awareness in the profession. The Guidance Notes are located below.

Everyone should be aware that the legal profession is a target group for money laundering and terrorism financing and that given the prospect of the introduction of an AML/CTF regime that includes legal practitioners is a real possibility, now is the time to start thinking about how the introduction of such a regime will affect your practice.

Resources

• Guidance Note No 1 - Why Should I Care About Money Laundering and Terrorism Financing?
• Guidance Note No 2 - What Does the Criminal Law Currently Provide, and What Are My Cash Reporting Obligations?
• Guidance Note No 3 - What Are My Professional Obligations?
• Guidance Note No 4 - What Does Money Laundering Look Like?
• Guidance Note No 5 - What Does Terrorism Financing Look Like?
• Guidance Note No 6 - How Do I Identify and Assess My Risk?
• Guidance Note No 7 - How Do I Mitigate and Manage My Risk?
• Guidance Note No 8 - How Do I Undertake Client Due Diligence?
• Guidance Note No 9 - How Do I Ascertain Source of Funds?
• Guidance Note No 10 - How Do I Check Whether Someone is a PEP?
• Guidance Note No 11 - Ceasing or Declining to Act
• AML/CFT Red Flags List for Legal Practitioners

 

Regulatory Reform Consultations

• LCA National Legal Profession Anti-Money Laundering and Counter-Terrorism Financing Guidance (June 2024)
• LCA Anti-money laundering vulnerabilities analysis (October 2023)
• Consultation paper on reforms to simplify and modernise the regime and address risks in certain professions (April 2023)
• LCA submission on Reforming Australia's anti-money laundering and counter-terrism financing regime (5 July 2024)
• LIV raises concerns about including legal professionals in phase 2 reforms to Australia's anti-money laundering and counter-terrorism financing regime (27 May 2024)