If you have worked with a lawyer, accountant, or real estate agent in recent years, you may have noticed they ask for identification documents before taking on your matter. From 1 July 2026, those requirements expanded significantly. Australia’s anti-money laundering laws have changed the way that will affect how your legal work is handled – and what we will need from you.
This article explains what is changing, why it matters, and what it means in practical terms for Chidiac Legal’s clients.
First, what is money laundering?
Money laundering is the process of making illegally obtained funds appear legitimate. It typically involves moving money through a series of transactions – often via property purchases, corporate structures, or professional services – to conceal its source.
Terrorism financing works similarly, except the funds are used to support criminal or terrorist activity rather than conceal past crime. Both are serious criminal offences in Australia.
Australia has had laws targeting financial institutions for over two decades. Banks, credit unions, and financial services businesses have long been required to verify their customers’ identities, monitor transactions, and report suspicious activity to AUSTRAC – the Australian Transaction Reports and Analysis Centre, which is the government’s financial intelligence regulator.
The problem is that professional services – lawyers, accountants, and real estate agents – have not been subject to the same obligations, despite being commonly used to move or conceal criminal funds. Australia has been on international watch lists as a result.
What is changing and why?
In late 2024, Parliament passed the Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024. This is the most significant reform to Australia’s AML framework in nearly 20 years.
The reform brings a new category of businesses – referred to as ‘Tranche 2’ entities – into the AML/CTF framework for the first time. These include:
- Law firms and barristers
- Accounting and bookkeeping firms
- Real estate agents and property developers
- Trust and company service providers
- Dealers in precious metals and stones
The reform was driven by pressure from the Financial Action Task Force (FATF), the international body that sets global standards for combating money laundering. Australia had repeatedly failed FATF evaluations for failing to cover these professional sectors. Without reform, Australia risked being placed on a formal international watch list, which would have had serious consequences for trade, investment, and our financial system.
| Why July 2026?
The legislation was passed in 2024, but the government has given professional services businesses an 18-month transition period to prepare. The obligations for Tranche 2 entities – including law firms – which took effect on 1 July 2026. From that date, these businesses must be enrolled with AUSTRAC and operating under a compliant AML/CTF program. |
What this means for law firms specifically
As a law firm, Chidiac Legal has become a reporting entity under the new framework. This is not a choice – it is a legal requirement. It means the firm must comply with a range of new obligations when providing certain types of legal services.
Which legal services are covered?
Not every legal service triggers the new obligations. The AML/CTF framework applies when a law firm provides what is called a ‘designated service’ – broadly, services that involve the handling or management of money, property, or business structures. For law firms, this includes:
- Conveyancing and property transactions (buying, selling, or transferring real estate)
- Managing client funds, bank accounts, or assets
- Setting up companies, trusts, or other legal entities
- Managing or transferring shares or ownership interests in a business
- Facilitating the flow of funds in a commercial transaction
General legal advice, litigation, family law, criminal defence, and immigration work are generally not designated services under the current framework, though this may evolve.
What are the new obligations for law firms?
Once a designated service is being provided, Chidiac Legal is required to:
1. Enrol with AUSTRAC
The firm must register as a reporting entity with AUSTRAC before 1 July 2026.
2. Develop and maintain an AML/CTF Program
This is a written risk management program that describes how the firm identifies and manages risks of money laundering and terrorism financing. It must be tailored to the firm’s client base, services, and transaction types – a generic template will not suffice.
3. Conduct Customer Due Diligence (CDD)
Before providing a designated service, the firm must verify the client’s identity. For individuals, this means checking identity documents. For companies or trusts, it means understanding the ownership and control structure – including identifying the real people who ultimately own or benefit from the entity (known as ‘beneficial owners’).
In higher-risk situations, enhanced due diligence may be required – for example, when acting for a politically exposed person, a foreign client, or in a high-value or unusual transaction.
4. Ongoing monitoring
The firm must monitor ongoing client relationships and flag transactions or patterns that seem inconsistent with what is known about the client, or that appear unusual.
5. Suspicious Matter Reports (SMRs)
If the firm suspects that a transaction may involve money laundering or terrorism financing, it is legally required to report it to AUSTRAC – regardless of whether the transaction proceeds. This obligation exists even if the firm is not certain that the activity is criminal.
6. Threshold Transaction Reports (TTRs)
Cash transactions of $10,000 or more must be reported to AUSTRAC. In practice, this is rarely relevant in legal matters, but the obligation exists.
7. Record keeping
All CDD records, transaction records, and AML/CTF program documentation must be kept for a minimum of seven years.
What does this mean for you as a client?
There is nothing you need to do now, and nothing to prepare in advance. The transaction triggers the new requirements – they only apply when you engage us for a designated service. You will not notice any change until that point.
When you engage us for a property purchase or sale, a business transaction, a company or trust setup, or any other matter involving the management of funds or assets, here is what to expect.
We will need to verify your identity before we can begin
The law requires us to confirm your identity before we can open your file and commence work. This is standard identity verification which you have already undertaken with us as part of our service – similar to what a bank asks for when you open an account.
For individuals, we will typically ask you to provide two forms of identification, which may include:
- A current Australian passport or driver’s licence
- A Medicare card or other government-issued document
- Proof of your residential address — for example, a utility bill or bank statement no more than three months old
In many cases, we can verify documents electronically. If we need originals, we will let you know in advance so you can bring them to your appointment.
If you are acting through a company or trust, we will need more details
Where a company or trust is a party to a transaction – buying property, entering into a contract, or setting up a new structure, we are required to look through the entity to identify the real people behind it. The law calls these ‘beneficial owners.’
Depending on your structure, we may ask for:
- The company’s ACN or ABN and ASIC registration certificate
- Names and ID documents for directors
- Details of shareholders holding 25% or more of the company
- For trusts: the trust deed, trustee details, and information about beneficiaries
For straightforward structures, this is usually quick. If your entity has layers of ownership or multiple parties, allow a little extra time at the start of your matter to get this information together when we ask for it.
We are not questioning your integrity.
These requirements apply to every client, for every designated service, regardless of how long we have worked together or how routine the matter appears. The law makes no exceptions for existing relationships or low-value transactions.
If we ask for more documentation than you have needed to provide before, it is because the law now requires it, not because anything about you or your matter has raised a concern.
Timing matters — especially for property settlements.
We cannot open your file or begin work on a designated service until identity verification is complete. For most matters, this happens quickly. For time-sensitive transactions, particularly property settlements where dates are locked in, any delay in providing documents can create real difficulties.
We will ask for what we need as early as possible in the process. If you respond promptly, it will not slow down your matter.
You may notice similar requests from your accountant or real estate agent
From 1 July 2026, this same framework applies to accountants and real estate agents when they provide certain services. If you are buying or selling a property, your agent will be required to verify your identity. If your accountant is setting up a trust or managing assets on your behalf, they will have obligations similar to ours.
This means that for transactions involving multiple professionals, which is common in property and business matters, you may be asked for the same documents more than once. Each firm is required to conduct its own verification independently.
It is worth knowing this in advance, so it does not come as a surprise. If you receive an identity request from your accountant or agent around the same time as one from us, that is not unusual, it is simply the new normal for how professional services operate in Australia from July 2026.
What happens if a business does not comply?
AUSTRAC has significant enforcement powers. Penalties for non-compliance range from formal warnings and remediation orders through to substantial financial penalties and, in serious cases, criminal prosecution.
AUSTRAC has already demonstrated its willingness to act. In recent years, major Australian banks have faced penalties in the hundreds of millions of dollars for AML/CTF failures. Professional services firms that fail to meet their new obligations from July 2026 should expect similar scrutiny.
The reforms also include a new offence of ‘tipping off’ i.e. it is illegal to tell a client that a suspicious matter report has been made about them, or that one is being considered. This is designed to prevent suspects from being alerted before AUSTRAC can act.
What happens next
Chidiac Legal has implemented these changes as part of the Tranche 2 requirements. Our AML/CTF program has been developed in accordance with AUSTRAC’s requirements, and our team has been trained on the new obligations.
You do not need to do anything at this stage. When you next engage us for a property transaction, business matter, or other designated service, we will walk you through what we need from you and why.
If you have questions about how these changes might affect your specific circumstances, please contact our office.
This article is intended as general information only and does not constitute legal advice. The law in this area continues to evolve as AUSTRAC releases further guidance for Tranche 2 entities. If you have questions about your specific situation, please contact Chidiac Legal directly.
