The federal Government is currently engaged in reforming Australia's Anti-Money Laundering/Counter Terrorism Financing (AML/CTF) regime. The purported aim of the reforms is to bring Australia into compliance with the standards published by the Financial Action Task Force (FATF), an international, inter-governmental body that develops and monitors policies to combat money laundering and terrorist financing.
The main thrust of the reforms, which the Government has opted to pursue in two stages, is to impose customer due diligence, reporting, record keeping and training obligations on entities that provide services which may facilitate money laundering.
Tranche one of the reforms aims to target the financial sector and has already been largely implemented through the Anti-Money Laundering and Counter-Terrorism Financing Act 2006. The final set of obligations under that Act commenced on 12 December 2008.
Tranche two of the reforms aims to target a range of other sectors, including the legal services sector. Tranche two legislation is currently under development by the Government, which has committed to consultation with the Law Council in relation to the imposition of any new obligations on lawyers.
From the outset of these reforms the Law Council has been proactively engage in lobbying the Government to ensure that any obligations imposed on legal practitioners are consistent with existing professional obligations and not unduly onerous.
The Law Council has submitted that the reforms should be precisely targeted so that they only capture the provision of services which are preparatory to or give effect to transactions through which money may be laundered. The reforms should not target legal services in general, nor low risk services or customers.
The Law Council has also consistently submitted that legal practitioners must not be subject to a suspicious matter reporting obligation that would require them to inform on their clients to regulatory agencies. The Law Council has argued that a suspicious matter reporting obligation would infringe upon client confidentiality and damage the important relationship of trust between lawyer and client.
The Law Council is committed to providing updates and information to the profession as consultations progress, particularly in relation to any new obligations which legal practitioners may be required to meet.