Australia is introducing expanded anti‑money laundering and counter‑terrorism financing obligations that will apply to legal service providers from 1 July 2026. These reforms are designed to reduce financial crime and align Australian requirements with international standards.

As a result, the way certain legal services are delivered will change. Additional verification and due diligence steps will be required before some types of work can commence. This email outlines what is changing and what to expect.

1. These changes form part of Australia’s anti‑money laundering and counter‑terrorism financing regime (AML/CTF Regime), which will apply from 1 July 2026.
2. The reforms extend obligations to legal service providers, including PGC Legal, when carrying out certain types of work.
3. For most clients, this will involve a small number of additional steps. The process will be managed to ensure it is clear and efficient.
4. The key matters to understand are set out below.

What is changing

5. The new requirements do not apply to all legal services. General advice and ongoing legal work will continue as usual.
6. The obligations apply where certain regulated services (Designated Services) are provided, including:

• • establishing companies, trusts or other entities;
  • restructuring entities or ownership arrangements;
  • assisting with property or transaction structuring;
  • handling or directing funds; and
  • assisting with financing or transaction arrangements.

7. These reforms are commonly referred to as Tranche 2 and extend across legal, accounting, real estate and related professional services.
8. Where a Designated Service applies, identity verification and client due diligence must be completed before work can begin.

What this means

9. Where a Designated Service is required, the following information may need to be collected and confirmed:

• • identity (for example, a current passport or driver’s licence);
  • date of birth and residential address;
  • details of any company, trust or other entity involved;
  • information about individuals who own or control an entity;
  • trust information, where applicable;
  • the source of funds for certain transactions; and
  • whether any person involved holds a prominent public position.

10. These checks are standard legal requirements. They ensure services are not used for unlawful purposes and do not reflect any concern about an individual or transaction.
11. Where relevant information is already held on file, it will be used and only updated or additional information will be requested.

Timing and process

12. A key change is timing. Certain work cannot commence until verification and due diligence steps are completed.
13. This applies regardless of any existing client relationship and must be satisfied for each relevant matter.
14. Prompt responses to requests for information will assist in avoiding delays.
15. Secure electronic verification systems may be used to complete checks efficiently and reduce administrative burden.

When this will apply

16. These requirements will arise where a Designated Service is requested on or after 1 July 2026.
17. For example, if there is a request to establish a new entity, restructure arrangements or assist with a transaction, verification steps must be completed before proceeding.

Existing clients

18. No immediate action is required.
19. The new requirements will apply as relevant matters arise. Client information may also be reviewed periodically to ensure records remain current.

How information will be used

20. Information collected will only be used to meet AML/CTF legal requirements, including:

• • verifying identity;
  • conducting client due diligence; and
  • supporting ongoing compliance and monitoring obligations.

21. Information will not be used for marketing, sold, or disclosed beyond what is required by law.

Storage and security of information

22. Under AML/CTF legislation, identification and verification records must be retained for seven years.
23. Secure third‑party platforms, including InfoTrack, may be used to assist with identity verification and compliance processes. These systems:

• • store information securely for the required retention period;
  • are ISO 27001 certified and meet recognised international standards for information security; and
  • include secure data handling, monitoring and risk management controls.

24. Information is deleted in accordance with regulatory requirements once the retention period ends.
25. Further details are available in the applicable privacy policy.

Next steps

26. No action is required at this stage. This information is provided in advance of the commencement date.
27. Further updates will be provided before 1 July 2026.

28. Where a Designated Service is required after commencement, the process will be explained and managed at that time.

29. It may assist to ensure identification documents and contact details are current.

30. Any enquiries regarding these changes can be directed to the office.

AML/CTF Infographic by Claire Hunt