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Legal Professionals
Source of Funds Verification for Lawyers
How lawyers must verify source of funds under Australia's AML/CTF Act. Covers AUSTRAC obligations, customer due diligence, and legal professional privilege from 1 July 2026.
AUSTRAC Requirements for Legal Practitioners
From 1 July 2026, lawyers and legal professionals providing designated services must verify the source of funds for transactions as part of their Customer Due Diligence (CDD) obligations under the AML/CTF Act.
The Act provides clear protections for legal professional privilege (LPP). Understanding where your obligations begin and where privilege applies is essential for every law firm preparing for Tranche 2.
Key Requirements for Lawyers
AML/CTF Program
Develop and maintain a tailored compliance program approved by your governing body.
Customer Due Diligence
Identify, verify customers and collect source of funds evidence before providing designated services.
Reporting Obligations
Submit required reports including Suspicious Matter Reports (SMRs) and Threshold Transaction Reports (TTRs).
Frequently asked questions
What are lawyers' source of funds obligations?
From 1 July 2026, lawyers must verify the source of funds used in transactions as part of Customer Due Diligence. This means collecting evidence of where client funds originated and assessing whether they are consistent with the client's profile.
When do AML/CTF obligations start for lawyers?
For Tranche 2 entities including lawyers and legal professionals, obligations commence 1 July 2026. Enrolment with AUSTRAC opens 31 March 2026. The Act provides clear protections for legal professional privilege (LPP).
What records must lawyers keep?
Lawyers must maintain accurate records of their AML/CTF program and compliance activities including source of funds verification. Most records must be retained for 7 years under the AML/CTF Act.
Related resources
Simplify Your AML Compliance
ARCaml helps lawyers and legal professionals meet AUSTRAC source of funds and CDD requirements efficiently - co-sourced, not outsourced.