What exactly counts as a “designated service” for law firms (and what doesn’t)?
It is important for law firms to obtain clarity on what services are captured by the anti-money laundering (AML) and counter-terrorism financing (CTF) regime.
The Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024 (Cth) (Act), specifically captures legal services that are vulnerable to misuse:
Creating companies, partnerships or trusts.
Acting as or arranging for someone to act as a director, partner, trustee or similar.
Providing a registered office, business address or correspondence address
Handling client money for a transaction (for example, conveyancing).
These are the core activities, and most small to medium firms will touch at least one.
Some common scenarios for the legal profession:
Conveyancing: every settlement involving client funds is a “designated service”.
Estate planning: setting up family trusts will be caught.
Commercial transactions: managing corporate structures, share transfers or cross-border dealings will all be captured.
What’s is outside the scope of “designated services”?
The Act does not capture everything lawyers do. Important carve-outs include:
Barristers: a barrister acting on a solicitor’s instructions is not providing a “designated service” themselves.
Court-ordered roles: acting as a bankruptcy trustee or in a court-appointed fiduciary role is excluded.
Certain payments: transfers to or from government bodies, courts or licensed insurers are exempt.
Why does this matter?
Knowing exactly what is “in” versus “out” determines when your firm must:
Carry out customer due diligence (CDD).
Keep AML/CTF records.
Submit suspicious matter reports (SMRs).
The best starting point is a service mapping of your firm’s existing service lines against the “designated services” in the Act to enable your firm to understand the breadth of services provided to your firm’s client base.
See also our article regarding the establishment and maintenance of an AML/CTF program.
We are well placed to assist you with all of these requirements – register for a webinar or 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
