06 May Anti-money laundering: more obligations for solicitors?

Can solicitors expect their compliance burden to increase yet further with the extension to the profession of anti-money laundering (AML) regulations?

Last week, the Attorney-General’s Department released its ‘Report on the Statutory Review of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 and Associated Rules and Regulations’ which included a recommendation (4.6) that the Attorney General’s Department and AUSTRAC, in consultation with the industry should:

a) develop options for regulating lawyers, conveyancers, accountants, high-value dealers, real estate agents and trust and company service providers under the AML/CTF Act, and

b) conduct a cost-benefit analysis of the regulatory options for regulating lawyers, accountants, high-value dealers, real estate agents and trust and company service providers under the AML/CTF Act.

Currently, solicitors in Australia are exempted from the full force of the AML/CTF Act as it applies to the financial services industry. Whilst there are some obligations for solicitors in relation to cash transactions and the provision of designated services, the current compliance burden is minimal compared to that faced by either the financial services industry in Australia, or solicitors in the UK and other jurisdictions.

Whilst working at the Law Society of England & Wales, I saw first-hand the extent of the AML compliance burden faced by solicitors. This is not to be under-estimated, and – if it comes – may include:

• undertaking customer identification checks
• implementation and maintenance of an AML/CTF program
• compliance reporting.

We’ve been here before of course. The legal profession has anticipated more AML regulation for a number of years and in 2009, I was the co-principal author (along with the fragrant Matt Dunn of QLS and of course the LCA) of the LCA Anti-Money Laundering Guide for Legal Practitioners.

We will see what happens now, but it looks like at least some more regulation is heading the legal profession’s way. If I have one lesson for Australia based on my UK experience it is to avoid complacency and not treat any regulations lightly – unless of course you re planning on spending time in prison. Yes, solicitors can spend time in jail for compliance failings – and Australia really should be able to learn from the UKs experience.

Happy lawyering!

See Also:

• LCA Guide to AML (2009) – co-authored by Giles Watson, Matt Dunn (QLS) and the LCA
• AUSTRAC Guide to money-laundering through legal practitioners.
• Report on the Statutory review of the AML/CTF Act 2006. (April 2016)
• AIC: Compliance costs of AML/CTF Act
• Solicitor jailed for AML compliance failings