Introduction

Australia's anti-money laundering and counter-terrorism financing (AML/CTF) regime entered a new era this week. From 1 July 2026, the long-anticipated "Tranche 2" reforms took effect, bringing lawyers, accountants, conveyancers, real estate professionals and dealers in precious metals and stones under the AML/CTF net for the first time. For a profession that has operated outside direct oversight by AUSTRAC (the Australian Transaction Reports and Analysis Centre) for two decades, the change is significant, and the compliance clock is now running.

The reforms flow from amendments to the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) (AML/CTF Act) passed in December 2024. AUSTRAC estimates that around 80,000 newly regulated businesses must now enrol, build compliance programmes and begin reporting suspicious activity. With civil penalties reaching up to A$31.3 million per contravention for a corporation, the stakes for getting it right are high.

What actually changed on 1 July

The regime does not regulate lawyers as a profession. It regulates a defined subset of what they do — the "designated services" listed in the new professional services table at subsection 6(5B) of the AML/CTF Act (Table 6). If a legal practice provides one or more of these services with a geographical link to Australia, in the course of carrying on a business, it becomes an AUSTRAC reporting entity.

Table 6 captures nine categories, including assisting clients to buy, sell or transfer real estate; receiving, holding or managing client property in connection with a transaction; assisting with equity or debt financing; creating or restructuring companies and trusts; acting as (or arranging) a director, trustee or nominee shareholder; and providing a registered office address. Notably, obligations can attach before a transaction completes — during preparatory steps that directly advance it.

Equally important is what falls outside the net. According to Law Society of NSW guidance published in February 2026, pure litigation, general legal advice, and work that merely "influences a client's thinking" without advancing a transaction will generally not be captured. Operating a trust account alone, or holding funds solely for legal fees, is also typically out of scope.

The immediate deadline: enrol by 29 July

Enrolment with AUSTRAC opened on 31 March 2026. Any practice providing a designated service from 1 July 2026 must enrol by 29 July 2026 — now the most pressing date in the calendar. Enrolment is only the first step. Regulated firms must also appoint an AML/CTF compliance officer, complete a money laundering, terrorism financing and proliferation financing risk assessment, adopt written policies and processes, conduct customer due diligence before providing a designated service, screen for sanctions and politically exposed persons, and keep records for seven years.

AUSTRAC's Starter Kits soften the landing

To ease the transition, AUSTRAC has released sector-specific Program Starter Kits — described as the first of their kind globally. The Legal Profession Program Starter Kit and a separate Conveyancing Starter Kit give small, low-complexity practices a set of customisable building blocks: a risk assessment framework, a policy document, day-to-day processes, and a library of operational forms.

The kits are not one-size-fits-all templates. They are designed chiefly for practices with 15 or fewer personnel that do not regularly handle high-risk clients or complex cross-border work. Larger or higher-risk firms can use them as a foundation but must build further to meet AUSTRAC's expectations. And mixed practices offering both legal and conveyancing services will need to maintain two separate risk assessments — one from each kit.

Technology will play a growing role in meeting these obligations at scale; client due diligence, screening and record-keeping platforms such as Legl are built to help firms operationalise these workflows without adding headcount.

Key Takeaways

• Map your services against Table 6 now, including one-off and low-fee work — even unpaid conveyancing for a family member can be captured.
• If you provide a designated service, enrol with AUSTRAC by 29 July 2026.
• Appoint an AML/CTF compliance officer and complete your risk assessment before rolling out policies and processes.
• Document your reasoning even if you conclude you are not captured — records support future reviews and demonstrate good faith.
• Mixed legal-and-conveyancing practices need two separate risk assessments.

Looking Ahead

The 1 July start date is a milestone, not a finish line. Attention now turns to how AUSTRAC exercises its enforcement discretion in the early months — the regulator has signalled an education-first posture, but that goodwill will not last indefinitely. Firms should watch for further sector guidance, refinements to the Starter Kits, and the first suspicious matter reporting patterns to emerge from the legal sector. The practices that treat compliance as an ongoing programme, rather than a one-off enrolment exercise, will be best placed as the regime matures.

Sources

• Law Society of NSW — Understanding designated services: when legal services trigger Tranche 2 AML/CTF obligations (25 Feb 2026)
• Law Society Journal — AML/CTF Tranche 2 Reforms: introducing AUSTRAC's Program Starter Kits (25 Feb 2026)
• AUSTRAC — Professional designated services
• AUSTRAC — Legal Profession Program Starter Kit
• AUSTRAC — Releases guidance for current and new reporting entities
• Norton Rose Fulbright — Tranche 2 and AML/CTF Reforms Hub

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