AML/CTF series: What should law firms do with existing clients and matters on 1 July 2026?
With the passing of the Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024 (Cth) (Act), law firms will soon be subject to the expanded anti-money laundering (AML) and counter-terrorism financing (CTF) regime. The Act captures firms of all sizes, from sole practitioners handling conveyancing to large commercial practices with trust accounts, with core obligations for law firms and conveyancers commencing on 1 July 2026.
A major concern for law firms is the treatment of existing clients.
If your firm already provides a newly captured designated service to a client as at 1 July 2026, that client becomes a “pre-commencement customer.” Your firm will not be required to conduct initial customer due diligence (see article 4 (When does our law firm need to do customer due diligence for AML/CTF?) unless:
your firm is required to file a suspicious matter report in relation to the client; or
circumstances change such that the client’s AML/CTF risk becomes medium or high.
For pre commencement customers, reporting entities also need to:
monitor any unusual transactions and client behaviours that may give rise to a suspicious matter report;
monitor for significant changes that may result in the AML/CTF risk of the client moving from low to medium or high; and
update KYC information about the client where necessary.
It is important firms do not ignore existing clients.
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
