From 1 July 2026, Australian law firms providing designated services under Table 6 of the AML/CTF Act are reporting entities. Legal professional privilege is protected — but the compliance obligations are real.
The AML/CTF regime does not regulate lawyers as a profession — it regulates specific services. Whether your practice is captured by Tranche II depends entirely on whether you provide one or more designated services set out in Table 6 of the AML/CTF Act 2006. The core test is whether your firm is acting on behalf of a client in a way that directly advances a relevant transaction or the creation or restructuring of a legal arrangement.
Your legal practice is likely in scope if it assists clients with any of the following:
Obligations arise early: AML/CTF obligations can be triggered before a transaction is completed, including during preparatory or organisational steps. The obligation begins when you act on client instructions in relation to a relevant transaction.
Free and pro bono work is not exempt: AUSTRAC has confirmed that even boutique, low-volume, or pro bono work can be captured if it directly advances a designated service in the course of carrying on a business.
In-house counsel are generally excluded: Lawyers advising their own employer (as opposed to external clients) are generally not caught under Table 6 — but the firm structure and service scope should be carefully reviewed.
What is NOT a designated service: A solicitor advising on the legal effect of contract terms without taking steps to execute a transfer is not providing a designated service. General legal advice and litigation work that does not directly advance a transaction of the kind described in Table 6 is excluded.
The AML/CTF Act expressly protects legal professional privilege (LPP) from 1 July 2026. A reporting entity may refuse to disclose information or produce a document where it reasonably believes the information is subject to LPP. A reporting entity may also decline to file a Suspicious Matter Report where the entire grounds for suspicion are composed of LPP-protected information. However, LPP does not provide a blanket exemption from other AML/CTF obligations — the practice must still enrol, maintain an AML/CTF program, conduct CDD, and meet record-keeping requirements.
| Obligation | What It Means for Your Practice |
|---|---|
| Enrol with AUSTRAC | Register via the AUSTRAC Business Portal from 31 March 2026. Deadline: 29 July 2026. |
| ML/TF Risk Assessment | Identify and document your money laundering and terrorism financing risks — tailored to your clients, services, and geographies. |
| AML/CTF Program | A written, risk-based compliance program covering your policies, procedures, controls, and staff training obligations. |
| Customer Due Diligence (CDD) | Identify and verify every client before providing a designated service. Enhanced checks required for high-risk clients and Politically Exposed Persons (PEPs). |
| Ongoing Monitoring | Continuously monitor client relationships and transactions for suspicious activity throughout the engagement. |
| Suspicious Matter Reporting | File Suspicious Matter Reports (SMRs) with AUSTRAC promptly when required. Failure to report is a serious criminal offence. |
| Record Keeping | Retain identity verification and transaction records for a minimum of seven years. |
| Appoint a Compliance Officer | Designate a qualified AML/CTF compliance officer and notify AUSTRAC by 29 July 2026. |
| Date | Milestone |
|---|---|
| 31 March 2026 | AUSTRAC enrolment portal opens for Tranche II entities. |
| 1 July 2026 | All AML/CTF obligations commence. Your program must be fully operational from this date. |
| 29 July 2026 | Final deadline to complete AUSTRAC enrolment and notify your nominated compliance officer. |
FATF has long identified legal professionals as a key vulnerability in the global AML/CTF framework. Criminals exploit legal services for their technical expertise, professional legitimacy, and access to complex transactions. Common methods include:
For two decades, Australia’s legal profession operated outside the AML/CTF regime — making it a target of choice for sophisticated financial criminals. Tranche II closes that gap permanently.
WilliamThomas&Co. offers a no-obligation Tranche II scoping consultation. With less than four months to the 1 July 2026 deadline, early action is the only safe strategy.