Conveyancers urged to get on the front foot

AUSTRAC has started a clampdown on conveyancers that have failed to sign up to federal AML/CTF laws, with the regulator issuing demands for information from practitioners.

In one notice, seen by Australian Conveyancer, an AUSTRAC enforcement manager demands production of documents related to non-enrolment under threat of potential fines or imprisonment.

The 11-page notice also requests information on business services, staff and whether the entity has dealt with cash in excess of $10,000 on property transactions.

Brendan Thomas, AUSTRAC chief executive, flagged the crackdown in August, saying the agency was preparing to come down hard on those who missed the July 29 enrolment deadline.

Asked about the action, AUSTRAC said it had identified businesses that had failed to enrol in the Tranche 2 reforms through “regulatory, intelligence and data holdings”.

“We are not providing operational details about the number of notices issued, the businesses involved or sector breakdowns while this work is underway,” deputy CEO of regulation Katie Miller said in a statement.

“Our focus is on ensuring businesses understand their obligations and take the necessary steps to comply with the AML/CTF Act.

“We will assess the information provided in response to these notices and determine any appropriate next steps.”

AIC Victoria president Shakila Maclean backed the sign-up rate of conveyancers.

“The response from conveyancers has been strong, with more than 80 per cent of conveyancing businesses now enrolled,” Maclean said.

“For those that haven’t enrolled, there may be genuine reasons – they may have retired, merged, closed or be in the process of leaving the industry.”

Her message to conveyancers who had received the AUSTRAC notice was “don’t panic”.

“Read it carefully, check your circumstances and, if you do need to enroll, get the process underway,” she said.

“We also have to remember this is completely new territory for conveyancers.

“We haven’t lived through this regime before, so we’re all still learning what compliance and enforcement will look like in practice.”

Maclean urged AUSTRAC to “keep the approach practical and reasonable and to continue working with the profession as businesses adjust to these new obligations”.

John Nguyen, an AML/CTF expert at Sydney-based AML Partners, said a smart move for conveyancers caught up in the clampdown was to see a lawyer.

“Seek legal advice immediately,” Nguyen said.

“The letter only gives you two weeks to respond as well, it’s quite an in-depth information and document request.”

He said it was likely the letter had gone out to thousands of businesses as AUSTRAC came good on warnings it would blitz the property sector on Tranche 2 non-compliance.

“Since the last budget announcement, basically AUSTRAC has had the green light to double their headcount and also has had an additional $100 million added to their budget,” he said.

“They’ve been preparing for this – and this is it.”

He said the stakes were especially high for businesses given “every single day that you don’t register as a designated service, you’re up for a $19,500 a day fine”.

The laws, bringing Australia into line with global AML/CTF standards, were prompted after authorities restrained more than $790 million worth of real estate linked to criminal gangs.