AUSTRAC regulation of law practices
In October AUSTRAC published for comment proposed changes to Chapter 23 of the Anti-Money Laundering and Counter-Terrorism Financing Rules in relation to law and accounting practices.

Background
When the Anti-Money Laundering and Counter-Terrorism Financing Act (Cth) (AML/CTF Act) was passed in 2006 there was concern that certain legal services and in particular ordinary trust account activities, might fall within the definition of a "designated remittance arrangement." The AML/CTF Act s10 excluded banks, building societys and credit unions from the obligations in the AML/CTF Act. Section 10 also provided for the exclusion of specified persons under the AML/CTF Rules. After sustained lobbying by the LCA AUSTRAC issued Rule 23 which excluded law practices from the operation of the AML/CTF Act.

A subsequent amendment by the Crimes Legislation (Serious and Organised Crime) Act (No 2) 2010 inserted a new definition in section 5 of "non-financier" thus altering section in the AML/CTF Act which provided for the exclusion of law practices rendering Rule 23 ineffective. The transitional provisions of the Crimes Legislation (Serious and Organised Crime) Act (No 2) 2010 had the effect however of continuing the exemption of legal practices.

Proposed amendment
Rather than rely on the transitional provision indefinitely, AUSTRAC now proposes to "tidy up" Chapter 23 of the AML/CTF Rules to bring the Chapter into line with the changed wording of the AML/CTF Act. Specifically, it is proposed to specify that persons who carry out a "law practice" are "non-financiers" as defined under section 5 of the AML/CTF Act.

The proposed new rule 23 provides that a person carrying on an accounting practice; or a person carrying on a law practice are "non-financiers"

The definition of law practice in 23.3 remains unchanged.