AUSTRAC's money laundering national risk assessment found that services provided by legal professionals pose a high money laundering risk in Australia — one of the more exposed professional sectors in the country. Since the AML/CTF Amendment Act 2024 passed Parliament on 29 November 2024, legal practitioners providing designated services are now operating under AUSTRAC's reporting-entity regime.
Why does AUSTRAC rate legal services as high-risk?
Not because of complicit lawyers specifically, but because of what legal services structurally provide: access to trust accounts capable of holding and moving client funds, the ability to create and manage companies and trusts, and the professional legitimacy that comes with a solicitor's involvement in a transaction. Those same features that make legal services valuable to legitimate clients are exactly what a launderer looking to move or disguise funds is seeking out.
Which legal services actually bring a firm into scope?
Five categories mirror the other Tranche 2 professions, and AUSTRAC sets them out in its professional designated services table: real property transactions conducted on a client's behalf; managing client money, securities, or other assets, including trust account handling; creating, operating, or managing companies, trusts, or similar legal arrangements; facilitating business sales, mergers, or acquisitions; and acting as a nominee director, shareholder, or trustee for a client.
Does this apply to every lawyer, or only some?
Only legal practitioners providing the designated services listed under the Act — not legal practice generally. A firm doing purely litigation, advisory, or non-designated transactional work isn't captured in the same way as one handling property settlements or managing trust structures on a client's behalf. Firms need to assess their own service mix against the designated-services list rather than assume the obligations apply uniformly across the profession.
What does an in-scope firm actually need to build?
The same foundation as every other Tranche 2 sector, and AUSTRAC publishes a legal profession programme starter kit covering it: a documented, firm-specific AML/CTF programme; customer due diligence including beneficial ownership identification for corporate and trust clients; ongoing monitoring of the client relationship, not just a one-off check at onboarding; suspicious matter reporting to AUSTRAC; and seven-year record retention. AUSTRAC enrolment was required by 31 March 2026, with full compliance required from 1 July 2026 — both dates have now passed. See MemberCheck's legal industry page for how due diligence applies to legal practice specifically, and the Tranche 2 impact on lawyers for the sector-specific detail behind the Act.
