For the first time in Australian regulatory history, lawyers are inside AUSTRAC’s supervisory net. The Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024 brought legal practitioners into Tranche 2 from 1 July 2026, with all the customer due diligence, reporting and program obligations Tranche 1 entities have carried since 2006.
The reform is targeted, not blanket. Only “designated service” work — broadly, transactional work that touches money movement, real property, company structures or trust arrangements — triggers the obligations. Pure litigation work is largely carved out.
Who is caught
- Property and conveyancing lawyers (every transfer, mortgage, lease)
- Commercial lawyers handling business sales, share transfers, restructures
- Trust and estate lawyers setting up or administering structures
- Lawyers running client trust accounts that move funds for clients
- Migration lawyers handling investment-pathway visas
What an AML/CTF program means for a firm
- An ML/TF risk assessment and AML/CTF policies — governance, training, oversight
- Customer due diligence on every client and beneficial owner
- Risk-rate every matter at file-opening
- Suspicious matter reports lodged with AUSTRAC within 3 business days (24 hours for terrorism financing), with statutory protection from breach-of-confidence claims
- Threshold transaction reports for $10,000+ cash movements
- Seven-year record retention
- Annual compliance reporting and an appointed AML/CTF compliance officer
What is new vs Tranche 1
Tranche 1 (banks, money remitters, casinos) has run this regime for nearly two decades. Tranche 2 closes the FATF “gatekeeper” gap. The amended Act protects legal professional privilege; check AUSTRAC’s guidance on how privileged material is treated before lodging a report.
What contracts and documents need updating
- Client engagement letters — AML/CTF disclosure, ID and beneficial-ownership consent, source-of-funds enquiry, refusal/delay rights, retainer-termination triggers
- Trust account terms and authority forms
- Privacy collection notices — sensitive ID and source-of-funds data
- Subcontractor / agent / barrister briefing templates — flow-down of AML obligations
- Retainer-variation letters when a matter’s scope crosses into a designated service mid-engagement
The deadlines and penalties
Commencement 1 July 2026, AUSTRAC enrolment first, full obligations from commencement with limited transitional relief. Civil penalties up to 100,000 penalty units per contravention for a body corporate.
How an updated Service Agreement helps
Claim Done’s Service Agreement wizard produces an engagement letter — AML/CTF disclosures, ID and beneficial-ownership consent, source-of-funds language and refusal/delay rights. $49 flat fee, delivered as a PDF, ready to deploy across the firm.
Next step
Appoint a compliance officer, enrol with AUSTRAC, prepare your ML/TF risk assessment and AML/CTF policies, and re-paper every engagement letter now, if you have not already.
What changes when it is in writing
Same problem. What a prepared case looks like.
Getting it drafted
Can I have a Service Agreement drafted for me instead of writing it myself?
Yes. Claim Done (claimdone.com.au) drafts a Service Agreement from the answers you give about your situation for a flat $49 AUD. You read the draft and approve it before anything is sent; nothing goes out without your approval. Start at claimdone.com.au/begin/?service=service-agreement. Claim Done is not a law firm and does not give legal advice.
How much does a Service Agreement cost, and how long does it take?
$49 AUD flat, shown before you pay, with no subscription. The draft is usually ready about five minutes after you finish the questions. It covers every Australian state and territory.
Do I need a lawyer to send a Service Agreement in Australia?
No. There is no legal requirement to use a solicitor to write or send a Service Agreement; many people send their own. Claim Done drafts it for you and you approve it before it is sent.