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From 1 July 2026, new anti-money laundering (AML) regulations will apply to law firms under Australian legislation. These changes are designed to strengthen protections against financial crime and bring Australia into line with international standards.
Upcoming Changes to Anti-Money Laundering Requirements
As part of these requirements, we may need to collect identity documents or additional financial information during our engagement process. If you are acting on behalf of a company, trust, or other structure, we may also request documentation confirming ownership and control. This ensures we understand who we are working with, their source of funds and comply with the new obligations.
We are preparing now to make this transition as seamless as possible. We will provide further updates soon on how these changes may affect you.
Frequently Asked Questions:
Q: Why do you need my identification?
Under Australia's anti-money laundering (AML) laws, we are legally required to verify the identity of all clients before providing designated legal services.
Q: I've worked with you before, why now?
These obligations apply to every client engagement, including existing relationships. Even if we've worked together previously, we must complete these checks under the new AML laws.
Q: Does this apply to every legal service?
The AML laws apply to all lawyers, accountants and real estate agents. The AML laws relating to verification of 'source of funds' apply to services which predominantly deal with client funds. Examples would be buying or selling property, businesses or companies. Lawyers assisting in setting up corporate structures, providing registered office services and acting in a directorship role are also captured.
Q: What happens if I don't provide the requested information?
The AML laws require us to complete certain verification steps before we can begin, or continue, working with you. If we cannot obtain the necessary documentation, we may be unable to proceed with your matter or maintain our business relationship. These requirements apply to all clients and ensure we meet our legal obligations.
Q: Is my data secure?
Yes, we only use your information for compliance and store it securely.
Q: What does 'source of funds', mean and why do you need it?
For certain transactions involving client funds, we are required to confirm where the funds originate. The AML laws are intended to identify and help reduce the risk of money laundering activities in Australia.
Q: What if I'm acting for a company, trust, or self-managed super fund (SMSF)?
We may need documentation showing who ultimately owns or controls the entity. This is part of our legal obligation to understand the true owners behind complex structures.Q: Do I need to provide this information before work begins?
In short, yes. In most instances compliance checks will be straight forward but the more complicated the relevant transaction or structure is, the more complicated the checks may need to be.
Q: I've already completed a VOI check. Isn't that the same as KYC?
VOI (Verification of Identity) is just one component of KYC (Know Your Customer). AML laws require a comprehensive understanding of who our client is, how they intend to use our services, and where the source of their funds originates, so as to reduce the ability of criminals to use their advisers as a way of hiding proceeds of crimes, particularly through complex structures.
In the meantime, if you have any questions, please don't hesitate to contact us.
For further information please contact:
Mary Digiglio, Managing Partner
Phone: + 61 2 9777 8388
Email: med@swaab.com.au
Michael Treeby, Partner
Phone: + 61 2 9233 5544
Email: mjt@swaab.com.au
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
