Conveyancers must use “reasonable efforts” in AML/CTF
Risk expert says AUSTRAC unlikely to probe any business if they are "doing the right thing".
AUSTRALIA’S financial crime regulator will likely wait until 2027 to seriously probe any compliance issues by conveyancers regarding the new AML/CTF laws.
Neil Jeans, AML/CTF expert and partner at Grant Thornton, said the federal tranche 2 regimen, which applies to conveyancers, takes effect from July, representing the biggest regulatory revamp to hit the industry in decades.
Under the overhaul, conveyancers need to register with AUSTRAC, conduct due diligence on clients, note large cash transactions, keep records and report suspicious activity.
The reforms bring Australia into line with standards adopted by around 200 nations globally.
Asked at the Australian Conveyancer’s What’s Next? summit whether conveyancers who were not ready in time could expect to face penalties, Jeans said “that’s unlikely”.
“AUSTRAC have made it very, very clear that they’re looking for reasonable efforts,” Jeans said.
“It’s not in their interest to penalise a firm in the short term unless they’re really sort of thumbing their nose at them, not interested, not completely engaging or involved in criminal conduct”.
He added that AUSTRAC resources would be stretched this year given the heavy agency workload rolling out the reforms.
“You’ve got to bear in mind that AUSTRAC are going to be really busy. They’ve got 17,000 businesses going through these reforms from the major banks down to casinos and everybody else by March 31,” the risk expert said.
“Then they’ve got a three-month window when they’ve got to get conveyancers, all the lawyers, the real estate agents and the dealers in precious metals, and the accountants – 90,000 businesses – ready for this change”.
Post enrolment, it was unlikely that AUSTRAC would look closely at conveyancers until September 2027 when initial annual compliance reports were due, Jeans said.
He described that point in time as “really the first opportunity they’re going to have to look at what you’re doing and how you’re doing it”.
“AUSTRAC never really goes hard on people so long as you’re making an effort,” he added.
The regulator last month released anti-money laundering program starter kits designed to help small businesses navigate the new rules.
The kits are designed to meet the compliance obligations of business and manage AML/CTF risks, while also cutting the time and cost of compliance.
Jeans urged conveyancers to use the kits to get compliant “one bite at a time”.
“The way that these packs have been designed is modular, so start with one fortnight and do the risk assessment because that’s the foundation. Next opportunity you’ve got a bit of spare time look at the policy,” he said.
“And then comes the most important part which is training. Training is going to be vital for you and your staff.”
