AML/CTF Guide for Legal Professionals in Australia

Part 1

When AML/CTF May Apply

For the relevant table 6 items, assistance with transactions and legal structures must directly advance the transaction or creation or restructure; general advice or ancillary work alone is not enough. Legal professional privilege remains important, but it does not remove every AML/CTF duty.

• Assisting with the sale, purchase or transfer of real estate, a body corporate or a legal arrangement.
• Receiving, holding, controlling or managing property for a relevant transaction.
• Helping arrange equity or debt finance for a company or legal arrangement.
• Assisting with the creation or restructuring of a body corporate or legal arrangement.
• Selling or transferring a shelf company.
• Acting, or arranging for another person to act, as a director or secretary, under a power of attorney, as a partner, as trustee of an express trust or in an equivalent role for a nominator.
• Acting, or arranging for another person to act, as a nominee shareholder for a nominator.
• Providing a registered office or principal business address.

Part 2

Main Risks in This Sector

These are starting points, not a ready-made risk rating. The business still needs to assess its own customers, services, countries, channels, transactions and technology.

• A legal transaction or trust account can give criminal funds an appearance of legitimacy.
• Companies, trusts and nominees can hide ownership, control or the real purpose of a deal.
• Property and business transactions can move high value across borders or through third parties.
• Urgency, confidentiality claims or complex instructions can discourage normal questions.
• Privilege can be misunderstood and applied too broadly to CDD or reporting information.

Part 3

A Practical Control Plan

1. Step 1

   Confirm scope

   Map matter types to the exact designated professional services.

2. Step 2

   Build the customer process

   Add a scope and CDD gate before covered work or client-property activity begins.

3. Step 3

   Set the risk controls

   Set a clear process for privilege, suspicious matters and restricted access.

4. Step 4

   Train and connect people

   Train legal and support staff using property, company, trust and client-money examples.

5. Step 5

   Test and improve

   Review sample matters for scope, beneficial ownership, source information and escalation quality.

Part 4

Worked Examples

These examples show how the scope and risk questions can be joined. They do not replace the law or the facts of a real matter.

Part 5

Evidence That Should Be Easy to Find

• The designated-service and geographical-link analysis.
• The current sector risk assessment and the official sources used.
• A matter-type scope map and reasons for covered and excluded work.
• A privilege and suspicious-matter decision process with restricted records.
• Client-account controls linked to CDD, source checks and matter risk.
• File reviews covering transaction, structure and nominee matters.
• Customer, beneficial ownership, risk, monitoring and reporting records.
• Training, internal review, independent assurance and remediation records.

Part 6

Common Mistakes

• Treating every legal matter as a designated service.
• Starting urgent transaction work before required CDD is complete.
• Using privilege as a blanket reason not to collect or report information.
• Identifying the instructing lawyer or director but not the beneficial owner.
• Keeping SMR information in the ordinary client file where access is too broad.