From today, many professional services firms – including legal, accounting and advice firms – will be subject to new obligations under the AML/CTF regime, which aims to prevent the misuse of services for money laundering, terrorism financing, fraud, sanctions evasion and other financial crimes.
The SMSFA said the tranche 2 reforms introduce new professional designated services, including services commonly provided by accountants, financial advisers and professional firms.
These include (but are not limited to) establishing an SMSF for a client, lodging application forms with ASIC to register a company or business name, assisting a client to buy or sell a business, including providing documents to ASIC for the transfer of a body corporate and providing a registered office address for a business client.
If you provide even one of the new designated services, you must enrol with AUSTRAC as a reporting entity and be ready to comply with your statutory obligations from 1 July 2026. This is not optional. Financial penalties may apply for each day your business remains unenrolled.
The association said those captured under the regime should, if they have not done so already:
- immediately confirm whether their practice provides any designated services
- appoint an AML/CTF compliance officer who meets the ‘fit and proper’ requirements and notify AUSTRAC of this person as part of their enrolment
- document and implement their AML/CTF program
- complete due diligence and training for all personnel involved in their AML/CTF program
From 1 July 2026, captured practices will also have ongoing obligations, including completing customer due diligence before providing a designated service to a client and meeting reporting obligations, such as reporting suspicious activity to AUSTRAC.
Sole practitioners or small businesses with 15 staff or fewer may be eligible to use the AUSTRAC Program Starter Kit, which will be the most efficient way to get their practice ready now.
AFS licensees should also act now and should review the new designated services and assess whether you can continue to rely on the exemption for businesses that only provide item 54 designated services.
SMSF trustees should also be aware of how the AML/CTF regime will affect them going forward.
From today, before most professional services can continue with their clients they are required to conduct customer due diligence (CDD) on individuals connected to the entities involved in a matter.
This is expected to involve providing documents for an SMSF, trust or company and any other information required to verify the identity of individuals involved.
Depending on the type of client and matter, this may include verifying the identity of individuals, trustees of SMSFs and other trusts, directors and shareholders of companies, SMSF members and beneficiaries of trusts, and appointors of trusts.
There may also be additional information required as to whether individuals such as family members or associates are a politically exposed person (PEP), or if they are subject to financial sanctions.
