The legal profession in Australia may face major challenges once the counter-terrorism financing laws are in effect. The anti-money laundering (AML) and counter-terrorism financing (CTF) rules could have a significant impact on lawyer-client privilege and revenue. According to the Law Council of Australia, the regulations could cost the legal profession 10 % of revenue.
The federal government seeks to extend Australia’s AML/CTF laws to various industry groups. The sectors will be subject to suspicious matter reports, observing due diligence requirements and verifying identification as exhibited in certain financial institutions. The changes may affect a range of industry players including lawyers, real estate agents, car dealers and accountants.
A collection of submissions from several industry bodies has been published by the Attorney Generals Department. Some of the submissions voice concerns on the effects of the new proposition. The Law Council of Australia was more vocal and warned of adverse effects if the changes were extended to the legal profession such as client privilege erosion and impeded confidentiality. According to the council, subjecting the legal profession to AML/CTF laws would impede the administration of justice and result in increased cost on the client end.
Transparency International Australia backed the changes stating that the laws will help tackle money laundering. Their submission focused on the obstacles facing intelligence gathering due to the lack of AML/CTF obligations in the legal profession. Sharing these sentiments was the Victorian Legal Services Board and Commission. However, it touched on the cost of increased oversight.
The Australian Bankers Association (ABA) also had no problems with any of the recommendations. The organization stated that it fully supports the implementation of the new AML/CTF laws. For the ABA, the reform should be considered a priority in order to combat money laundering and terrorism financing in Australia.
The Australian Small Business and Family Enterprise Ombudsman voiced concerns regarding the impact of increased regulations on small businesses. The changes would definitely increase the regulatory burden on small businesses.
The Australian Automotive Dealers Association was not open to the notion of additional AML/CTF obligations. The association noted that this would place an unnecessary burden to motor vehicle dealers in light of the money laundering and terrorist funding risk. For AADA, restrictions on cash transactions for car purchases would suffice.
The Real Estate Institute of Australia while not directly opposing the changes, expressed cause about the report levels that the changes would necessitate. According to the organization, the majority of real estate agencies in the country lack the capacity to undertake demanding regulatory oversight operations. The cost related to these exacting functions could prove too much for the real estate possibly leading to closures.