Leading Australian financial crime risk and compliance experts have spoken out on the need for law firms to act urgently in readiness for Tranche 2 of Australia’s anti-money laundering laws.
They warn failure to do so, may result in adverse outcomes for Australian firms by international agencies and ultimately action by the federal government regulator – AUSTRAC.
Neil Jeans and Richard Storey – partners of Grant Thornton Australia – said the impending deadline has potential impacts for law firms and other legitimate business operators.
Richard said Australia is one of the last countries in the world to move into the more complete AML/CTF regime that includes professional services, such as legal practices and real estate agents.
“Tranche 2 has a very important role in identifying the underlying or predicate crimes of money laundering, because (they) are the advisors to legitimate businesses, and unfortunately that makes them an attractive target for illegitimate business interests,” he said.
“So, a drug dealer or someone who is running a child exploitation ring will need to do something with their illegitimate funds.
“They’ll take advice from a well-meaning accountant, a lawyer, or indeed a property advisor, and unfortunately that role of helping us to identify suspicious matters or potentially illegitimate funds really does need the contribution of those front-line people such as lawyers, accountants, and professional real estate agents.”
Neil said Tranche 2 was not about catching bad or criminal lawyers.
“The whole AML/CTF regime is not about criminalising particular parts of a particular industry,” he said.
“What it is, is encouraging – through legislation – certain people to play their role.
“That includes in this second tranche, what’s known as the ‘gatekeeper professions’, including lawyers.
“This is about getting legitimate lawyers to play a very important role in making it harder for criminals to use their services to then access the financial services.” he said.
Neil said Australia – should it not quickly move to comply with global international AML procedures and protocols – could be in the receiving end international community action and result in detrimental consequences.
In late 2024, the Australian Federal Government enacted significant legislation amending the existing Anti-Money Laundering and Counter-Terrorism and Counter-Terrorism Financing Act of 2006.
The new laws were enacted with the express intention of expanding the scope of laws to include compliance by ‘high-risk’ businesses potentially used by criminals to launder ill-gotten gains – such as real estate, precious metals dealers, and professional services like law firms, accountants and professional real estate agents.
The reforms, scheduled to take effect in July 2026, were implemented to strengthen the country’s ability to fight financial crime.
The expanded regulation – known as Tranche 2 – will compel businesses to report certain ‘designated services’ to AUSTRAC, which uses the information to help law enforcement and revenue agencies.
This includes reporting both suspicious matters and certain transaction types.
Learn more about the AML/CTF regime and how it applies to your practice on QLS’ dedicated resource page.
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