Tranche 2 AML Compliance: Impact on Lawyers
#AML #Tranche2 #Lawyers #Australia
September 10, 2024
5 Minutes
English
Australia is increasing its defences against financial crime by making major changes to its Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) regime. These reforms will bring more businesses under the umbrella of AML/CTF rules, often called ‘Tranche 2 entities’.
Tranche 2 entities that will be affected by the new AML/CTF reforms include lawyers, accountants, trust and company service providers, real estate professionals, and dealers in precious stones and metals.
The services provided by lawyers are vulnerable to exploitation by criminal actors to:
Lawyers that provide ‘designated services’ under the current law, are regulated regardless of how they brand their business, and are considered ‘reporting entities’.
The AML/CTF reforms will impact lawyers by bringing them under the supervision of the regime. This means that they will be required to:
These reforms are intended to address the fact that criminals exploit the services of lawyers and other professionals to launder money and finance terrorism. The reforms aim to make it more difficult for criminals to misuse the services of lawyers and other professionals and make the Australian financial system less vulnerable to financial crime.
As Tranche 2 takes effect, lawyers must adapt swiftly. Vigilance and adherence to AML/CTF obligations will help maintain integrity in the industry. By complying with these reforms, Australia aims to protect Tranche 2 entities from exploitation by criminals to launder money or fund terrorism, comply with the most recent FATF standards, and contribute to the global fight against financial crime.
The Tranche 2 Reforms are a set of proposed legislative reforms aiming at broadening the scope of Australia's Anti-Money Laundering and Counter-Terrorism Financing laws to include more businesses and professions.
The Tranche 2 Reforms will affect real estate agents, precious metals dealers, lawyers, trust and company service providers, and accountants.
The exact timing for the implementation of the Tranche 2 Reforms is dependent on the legislative procedure. Stakeholders should keep an eye on statements from appropriate government authorities, such as the Australian Transaction Reports and Analysis Centre (AUSTRAC), for specific dates and transitional periods after the Act is passed.
The Tranche 2 Reforms are required to align with global standards established by the Financial Action Task Force (FATF), which recommends that countries regulate DNFBPs within their AML/CTF frameworks and to strengthen Australia's ability to detect, prevent, and combat money laundering and terrorism financing activities.
Regulated entities must conduct detailed risk assessments, develop and implement strong AML/CTF programs, ensure that employees receive adequate training on AML/CTF obligations and the entity's compliance program, establish systems for reporting suspicious activities and keeping records in accordance with regulatory requirements.
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