For Lawyers

AML/CTF program for Australian law firms — AUSTRAC Tranche 2 from July 2026

Tranche 2 captures specified legal services — not all of legal practice. Your program needs to identify which matters are in scope, preserve legal professional privilege under s 242 of the Act, and still satisfy AUSTRAC supervision.

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Compliance Challenges for Lawyers

Conveyancing, trust formation, company set-up and managing client money all become AUSTRAC-regulated services from 1 July 2026. Generate a privilege-aware AML/CTF program in minutes.

Legal professional privilege is preserved — but narrowly

Section 242 keeps privileged communications outside the SMR regime, but the privilege does not extend to your underlying CDD records or to information given for the purpose of facilitating a crime. Drafting these boundaries clearly is the hardest part.

Only specific legal services are in scope

Conveyancing, formation of legal entities, acting as trustee, managing client money or assets, and instructing on financial transactions are the captured 'designated services'. Pure litigation and advice work generally aren't — but multi-disciplinary firms need a per-matter triage.

Trust accounts already attract regulator attention

Law society trust-account audits and AUSTRAC TTR obligations overlap but aren't identical. Cash deposits to a law-firm trust account of $10,000 or more must be reported under s 43 within 10 business days, separately from your law-society reporting.

Multi-practice firms need a single coordinated program

A litigation partner and a property partner have wildly different risk profiles. Your Part A program has to define a firm-wide ML/TF risk assessment while letting each practice group apply proportionate Part B procedures.

What Lawyers Need for Compliance

The AML/CTF Act 2006 (Cth) and the AML/CTF Rules require all reporting entities to maintain these documents and procedures.

AML/CTF Program with Part A and Part B sections — s 81 of the Act

ML/TF Risk Assessment per practice group, rolled into a firm-wide view

Matter-intake CDD procedures covering individuals, trusts and corporate clients

SMR workflow that respects legal professional privilege under s 242

TTR procedure for $10,000+ trust-account cash transactions

Beneficial-ownership identification at the 25 % threshold

Sanctions and PEP screening at matter opening and at trigger events

7-year record retention aligned with both AUSTRAC (s 107) and your law-society rules

Deadline & Applicability

Law firms providing one or more designated legal services become reporting entities on 1 July 2026 under the AML/CTF Amendment Act 2024. The Law Council of Australia has issued transition guidance; AUSTRAC's draft sector-specific guidance for legal practitioners is expected progressively from 2025.

Last reviewed: 18 April 2026 · Information is general guidance, not legal advice.

How AutoAML Helps Lawyers

AI-Generated Documents

All 13 compliance documents drafted from your service mix and risk profile — Part A, Part B, risk assessment, CDD scripts, the lot.

Team & Audit Trail

Invite your team, assign Compliance Officer roles, and keep a tamper-evident audit log AUSTRAC supervisors can read.

SMR & TTR Built-in

Reporting workflows, training tracking, annual review reminders and document version control — so the program stays alive after day one.

Frequently Asked Questions

Lawyers & AUSTRAC: common questions

Does AML/CTF override legal professional privilege?

No. Section 242 of the AML/CTF Act expressly preserves LPP. But the privilege does not protect CDD records, transaction records or communications made for the purpose of facilitating a crime. A well-drafted program identifies the line clearly so staff aren't forced to make it under pressure.

Which areas of practice are actually in scope?

Conveyancing and property settlements, formation and management of companies and trusts, acting as nominee director or trustee, managing client money or assets, and instructing on financial transactions. Pure dispute resolution, family law and criminal defence work generally aren't 'designated services'.

Do barristers need an AML/CTF program?

Generally no — barristers acting on instructions from a solicitor in litigation or advisory work are not providing a designated service. A barrister directly retained by a client to manage funds or form an entity could be in scope, which is uncommon but not impossible.

How do we handle CDD when a client refuses to provide ID?

You cannot proceed with the designated service. The Act treats failure to complete CDD as a bar to the engagement, separately from any SMR consideration. Your Part B procedures should script the staff response so it isn't ad hoc.

Can we outsource CDD to a third-party identity service?

Yes, with conditions under s 36A and the related Rules. The reliance arrangement must be documented, the third party must agree to provide the underlying records on request, and ultimate responsibility stays with the firm.

What's the penalty for missing an SMR?

Failing to lodge a required SMR is a civil penalty contravention. Maximum penalties for body corporates run into the tens of millions per contravention, and AUSTRAC has recently pursued failure-to-report breaches aggressively (see Entain $123M, 2025).

Related industries under AUSTRAC Tranche 2

Many firms work across more than one designated-service category. Check the related sectors below.

For Conveyancers

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