AML/CTF series: How does “tipping off” and legal professional privilege (LPP) work for law firms?
Lawyers face unique challenges balancing anti-money laundering (AML) and counter-terrorism financing (CTF) obligations with duties to clients.
Tipping off
It is an offence to disclose information to a client if that disclosure could prejudice an investigation, which means:
if your firm lodges a suspicious matter report, you cannot tell the client; and
your firm must train staff to handle client questions without “tipping off.”
Tipping off is there to be prevent criminals changing or hiding illegal activities, and can carry significant penalties.
It does not matter whether you know or think an investigation has started for the tipping off offence to apply.
Legal professional privilege
The Amendment Act’ to Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024 (Cth) preserves the common law doctrine of legal professional privilege (LPP). LPP protects certain communications between lawyers and their client.
If AUSTRAC issues a notice for information, you can assert LPP using a prescribed form. The form specifies the basis on which the information is privileged from being produced on the grounds of LPP.
However, non-privileged information (such as identity documents or transaction details) must still be provided.
AUSTRAC recently released additional guidance on tipping off and LPP. The Minister for Home Affairs is also set to issue LPP guidelines setting out processes for handling of LPP claims.
We are well placed to assist with your firm’s AML/CTF requirements – give our AML/CTF team a call.
Paul Gray
Principal
T 03 5225 5231 | M 0414 195 886
E pgray@ha.legal
Hugo Le Clerc
Senior Associate
T: 03 5225 5213 | M: 0438 089 334
E: hleclerc@ha.legal
