AML/CTF Compliance for
Lawyers and Conveyancers
Is your legal practice prepared for AUSTRAC's AML/CTF requirements and independent evaluation obligations?
In short
From 1 July 2026, lawyers and conveyancers who act in property or business sales, set up or manage companies and trusts, or hold client money in a transaction are AUSTRAC reporting entities under Tranche 2. They must enrol, assess their risk, adopt AML/CTF policies, verify clients, report suspicious matters and keep records for seven years. Legal professional privilege is preserved.
Lawyers and conveyancers play a critical role in high-value property transactions, making the legal profession a key focus area for AUSTRAC's anti-money laundering and counter-terrorism financing supervision.
Since 1 July 2026, lawyers and conveyancers have been reporting entities when they provide designated services under the AML/CTF Act, with legal professional privilege expressly preserved.
Why are lawyers and conveyancers now regulated by AUSTRAC?
AUSTRAC recognises that legal practitioners can be exploited by criminals to facilitate money laundering, particularly through property settlements, trust account management, and the preparation of transaction documents. The legal profession's trust account system makes it particularly vulnerable to abuse.
Without robust AML/CTF controls, your practice could unknowingly facilitate money laundering activities.
Which legal and conveyancing services are designated services?
You are a reporting entity when you provide these designated services:
- Buying or selling real estate - acting for clients in property transactions, including conveyancing services
- Managing client money, securities or other assets - operating trust accounts or managing investments
- Managing bank, savings or securities accounts - handling client bank accounts or authorisations
- Creating, operating or managing legal persons or arrangements - establishing companies, trusts, or partnerships
- Buying or selling a business - facilitating business acquisitions or sales on behalf of clients
From 1 July 2026, a practice providing any of these services must be enrolled with AUSTRAC within 28 days and comply with the Anti-Money Laundering and Counter-Terrorism Financing Act 2006. Litigation and advocacy are not designated services, and a transaction carried out under and in accordance with a court order, such as implementing a family-law property order, is excluded; acting in the underlying property or business transaction, or creating or restructuring a trust or company as part of estate planning, can still be a designated service.
Money Laundering Vulnerabilities in Legal Practice:
- Trust accounts used to layer or integrate illicit funds through legitimate transactions
- Property transactions used to legitimise proceeds of crime or transfer value
- Professional privilege potentially shielding suspicious client activities from scrutiny
- Creation of complex legal structures (trusts, companies) to obscure beneficial ownership
- Receipt of large cash deposits or payments from unknown third parties
- Clients instructing transactions that lack commercial rationale or legitimate purpose
How do you build a legal practice AML/CTF program?
Compliance starts with a thorough ML/TF Risk Assessment tailored to your practice. Whether you're a sole practitioner, conveyancer, or multi-partner firm, your AML/CTF obligations depend on the designated services you provide and your client risk profile.
We help legal practices develop AML/CTF Programs that balance regulatory compliance with client confidentiality, professional privilege, and the practical realities of legal practice.
What must a law firm or conveyancer's AML/CTF program include?
Client Identification
Robust KYC/CDD procedures for all clients receiving designated services, including beneficial owner identification
Trust Account Monitoring
Enhanced monitoring and controls for trust account transactions to detect suspicious patterns
Ongoing Due Diligence
Continuous monitoring of client relationships and transaction patterns throughout the engagement
AUSTRAC Reporting
Timely submission of Threshold Transaction Reports (TTRs) and Suspicious Matter Reports (SMRs)
Record Keeping
Comprehensive documentation of client verification, transaction records, and compliance decisions for 7 years
Independent Evaluation
Mandatory independent evaluation of your AML/CTF policies at least every three years to confirm they work in practice
What are the money-laundering red flags for legal practitioners?
Property Transaction Red Flags
Property purchased well above or below market value, rapid buying and selling of property, use of cash for deposits or settlements, purchaser shows little interest in property details, or transactions involving high-risk jurisdictions.
Trust Account Concerns
Large deposits from unknown sources, frequent transfers in and out inconsistent with normal conveyancing, client requests to hold funds without clear legal purpose, or instructions to transfer funds to unrelated third parties without adequate explanation.
Corporate Structure Red Flags
Complex corporate structures with no apparent commercial purpose, use of nominee directors or shareholders, reluctance to disclose beneficial owners, frequent changes in company ownership or control, or entities registered in secrecy jurisdictions.
Client Behaviour Indicators
Client reluctant to provide identification or source of funds information, evasive when asked routine questions, requests unusual levels of confidentiality, wants to settle quickly without normal due diligence, or provides inconsistent information about their circumstances or transaction purpose.
How does SNS Accounting help law firms and conveyancers?
We understand the unique challenges facing legal practitioners in balancing AML/CTF compliance with professional obligations. Our team has extensive experience helping law firms and conveyancers implement practical AML/CTF Programs that protect both the practice and the integrity of the legal profession. We understand the interplay between AML/CTF obligations and legal professional privilege.
We have worked with:
Our services for legal practitioners include:
- ML/TF Risk Assessment tailored to your legal practice area and client base
- Development of practical AML/CTF Programs for law firms and conveyancers
- Client identification and verification procedures that respect privilege
- Trust account monitoring and transaction reporting procedures
- Red flag identification training for legal staff and partners
- Independent Reviews of your AML/CTF Program conducted by qualified reviewers
- AUSTRAC registration and ongoing compliance support
- Response to AUSTRAC inquiries and enforcement actions
- Guidance on balancing AML/CTF obligations with legal professional privilege
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Legal practice AML/CTF questions answered
Designated services, privilege, trust accounts and enrolment for Australian lawyers and conveyancers.
Which legal and conveyancing services are designated services?
Assisting a client to plan or execute the sale, purchase or transfer of real estate or of a business or company; receiving, holding and controlling or managing client money, accounts, securities or other property as part of such a transaction; organising contributions for the creation or management of a company or trust; creating, operating or managing a company, trust or partnership; acting as or arranging a nominee director, shareholder or trustee; and providing a registered office or business address.
Are litigation, family law and wills caught?
Scope follows the service, not the practice area. Court work, advocacy and advice that does not involve carrying out a listed transaction are not designated services, and a transaction carried out under and in accordance with a court order, such as implementing a family-law property order, is excluded. Acting in the underlying property or business transaction, or creating or restructuring a trust or company as part of estate planning, can be a designated service. Drafting a will is not.
How does legal professional privilege interact with AML/CTF reporting?
The Amendment Act expressly preserves privilege. A lawyer is not required to disclose privileged communications in a suspicious matter report or to AUSTRAC, and a prescribed form is used to assert privilege. Privilege does not, however, cover the fact that a transaction occurred or a client's identification documents, and it never protects communications made to further a crime. Conveyancers do not create privilege themselves, but may withhold material they reasonably believe is privileged, after taking legal advice.
When did lawyers and conveyancers have to enrol with AUSTRAC?
Enrolment opened on 31 March 2026, and firms must be enrolled within 28 days of first providing a designated service from 1 July 2026. Enrolment is online and free. The firm enrols, not each practitioner, and must nominate an AML/CTF compliance officer who is a fit and proper person at management level.
Does a law firm trust account change anything?
Yes. Receiving funds into trust for a conveyance or business sale is itself a designated service, so the source of funds must be understood and transactions monitored. Physical cash of $10,000 or more received into trust triggers a threshold transaction report within 10 business days. State trust account rules and external examinations continue to apply alongside the AML/CTF Act; the two regimes overlap but remain separate.
What are the red flags in conveyancing and legal practice?
Buyers who pay large deposits in cash or from unrelated third parties, instructions to route settlement funds through trust without a legal reason, properties bought and resold quickly or at prices far from market, reluctance to provide identification or source of funds, complex structures or nominees with no commercial purpose, clients who want to settle unusually fast, and funds from high-risk jurisdictions. These warrant enhanced due diligence and possibly a report.
How does SNS Accounting help law firms and conveyancers?
We scope which of your services are designated, enrol the practice, write a risk assessment and AML/CTF policies that respect privilege and trust account obligations, build client identification and source-of-funds checks into your matter-opening workflow, train partners and staff, and arrange the independent evaluation; because the evaluator must not have built the program, we evaluate only programs we did not write. Fixed fees, quoted in advance. We are accountants, not lawyers; general information, not legal advice.