The Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) is Australia’s primary legislation for preventing money laundering, terrorism financing, proliferation financing, and other serious financial crime.
In simple terms, the Act requires certain businesses — known as reporting entities — to know who their customers/ clients are (customer identification and verification), assess and manage the risk those customers/clients pose, monitor transactions and services for suspicious activity, report certain matters to the regulator and keep records demonstrating compliance. The Act is administered and enforced by the Australian Transaction Reports and Analysis Centre (AUSTRAC), Australia’s financial intelligence agency and AML/CTF regulator.
Purpose of the AML/CTF Act
The AML/CTF Act exists to protect: Australia’s financial system, The broader economy and the community/citizens. It does this by making it harder for criminals to hide or move illicit funds, use legitimate businesses to launder money and finance terrorism or organised crime. The regime does not turn businesses into law enforcement agencies. Rather, it positions them as gatekeepers — identifying risk early and reporting concerns where required.
Why It Matters More Now: Tranche 2 Reforms
When introduced in 2006, the AML/CTF regime applied mainly to financial institutions, casinos and other high-transaction businesses (often referred to as Tranche 1 entities).
From 1 July 2026, under the Tranche 2 reforms, the Act will extend to a broader range of professional services, including: Lawyers/ Solicitors, Real estate agents, Conveyancers, Accountants and tax agents, Trust and company service providers, Dealers in precious metals and stones.
What This Means for Family Lawyers
Family law matters frequently involves property transfers, trust and company structures, cross-border assets/ transfer of funds and large financial settlements- international or local. These are precisely the types of transactions that attract AML scrutiny.
The Practical Takeaway
Understanding the AML/CTF Act — and preparing for Tranche 2 — is essential to protect the legal firm from regulatory risk, avoid inadvertent involvement in financial crime, maintain professional integrity, safeguard the reputation of the legal profession. As the regime expands, family lawyers will increasingly play a frontline role in protecting Australia’s financial system — not as investigators, but as informed and vigilant gatekeepers.