Understanding AML/CTF: What the New Laws Mean for You
From 1 July 2026, Australia's Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) laws will expand to include professional service providers such as law firms, accountants and real estate professionals.
While these changes introduce some new requirements for both firms and clients, their purpose is simple: to help prevent criminals from using legitimate businesses and financial systems to launder money or fund illegal activities.
At Terracon Legal, we are committed to making this process as straightforward and seamless as possible for our clients.
Why are these laws changing?
Money laundering is a significant issue in Australia. AUSTRAC estimates that more than $68 billion of crime-related money is laundered through Australia every year.
The expanded AML/CTF legislation is designed to stop illegal funds from entering the financial system and to bring Australia into line with international standards.
From 1 July 2026, law firms will be required to:
- Verify the identity of clients
- Assess the risk of money laundering or terrorism financing
- Monitor certain client activities and transactions
- Report suspicious matters to the relevant authorities
These obligations apply across the legal profession and are intended to protect our communities, our professions and the broader economy.
Why are we asking for identification documents?
As part of these new obligations, we may ask clients to provide information that they have not previously been required to provide.
Depending on the matter, this may include:
- A form of photo identification, such as a passport or driver's licence
- Proof of address, such as a utility bill or bank statement
- Company, trust or SMSF documentation
- Details about the ownership or control of companies, trusts or other entities
- Information about the source of funds or source of wealth for certain transactions
If you are acting on behalf of a company, trust or other structure, we may also need to identify and verify the individuals who ultimately own or control that entity.
Importantly, these requests are not made because we suspect wrongdoing. The legislation requires us to apply consistent checks to all clients and transactions that fall within scope.
I've been a client for years. Why do I need to provide information now?
This is one of the most common questions we receive.
Even if you have been a client of Terracon Legal for many years and your circumstances have not changed, we are still required to verify your identity under the new legislation.
For most clients, this process will only need to be completed once, and the information will generally carry forward to future matters.
However, if your circumstances change — for example, if your business structure changes, ownership changes, or your identification documents expire — we may need to update our records.
What happens if I don't provide the information?
Unfortunately, if we are unable to complete the required identity and verification checks, we may not be able to act for you on matters that fall within the scope of the legislation.
This is not a policy choice made by Terracon Legal. It is a legal requirement that applies to all law firms operating in Australia.
Our team will always explain what is required and work with you to make the process as efficient as possible.
Why are you asking about my source of funds?
For some matters, particularly those involving significant financial transactions, we may be required to understand where the funds involved have come from.
This could include:
- Savings
- The sale of a property or business
- Inheritance
- Investment proceeds
- Other legitimate sources of wealth
These checks help ensure that funds used in transactions are legitimate and comply with Australia's AML/CTF laws.
How will my information be stored?
Protecting your personal information is extremely important to us.
We only collect information that is required by law, and all information is handled securely and in confidence.
To support this process, Terracon Legal uses First AML, a specialist technology platform designed specifically for AML/CTF compliance.
First AML is an automated verification and workflow management tool that helps us securely collect and verify information while making the process as quick and convenient as possible for our clients.
What can you expect from Terracon Legal?
While these new requirements represent a significant change for the legal profession, our commitment to our clients remains the same.
You can expect:
- Clear explanations about what information is required and why
- Secure handling of your personal information
- A streamlined verification process supported by technology
- Practical guidance from our experienced legal team
The introduction of AML/CTF reforms is an important step in protecting Australia's financial system and preventing criminal activity.
At Terracon Legal, we are embracing these changes and are here to guide our clients through the process with clarity, confidence and care.