AML/CTF Rules 2025: Reporting for law firms

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Understanding AML/CTF Rules 2025 Part 9: Reporting, and what it means for the law sector

From 1 July 2026, Australian law firms will need to lodge reports with AUSTRAC in certain situations. These reports are a core part of the AML/CTF framework as they help regulators spot money laundering and terrorism financing risks at an aggregate level across legal services.

For firms, the three most common reports will be:

• Suspicious Matter Reports (SMRs) – when something about a customer or matter doesn’t feel right.
• Threshold Transaction Reports (TTRs) – whenever someone pays $10,000 or more in cash or equivalents, even if nothing looks suspicious.
• Annual AML/CTF compliance report - shows how your firm is meeting obligations

Suspicious Matter Reports (SMRs)

When to lodge

You must lodge an SMR if you suspect something about a client or matter may be linked to:

• Money laundering or terrorism financing
• Sanctions breaches
• Fraud, bribery, corruption, or other serious offences
• Identity concerns (customer or agent not who they say they are)
• Unusual matters (no clear business/legal purpose, unusually complex, or inconsistent with the client’s profile)

The suspicion can arise:

• When you’re asked to provide a service,
• While you’re providing it, or
• After the service is complete.

What to include

An SMR requires:

• Your firm's details - name, AUSTRAC ID, submission date.
• Staff details - name, role, contact info of person lodging the report + another contact who can explain the suspicion.
• Customer details –
  • individuals (full name, DOB, citizenship, addresses, occupation, ID docs)
  • non-individuals (company/trust names, registration details, directors, beneficial owners).
• Why you’re suspicious – e.g. funds don’t match profile, beneficial owner hidden, unusual payment pattern.
• Matter details – e.g. property address, business premises, offshore location matter value, accounts involved.
• Links to other parties – anyone acting on behalf of the customer, related businesses, signatories, intermediaries.
• Supporting evidence – documents, images, online records, or anything that supports your suspicion.

Examples

•  An overseas contact approaches your firm, offering to pay well above normal legal fees if you will act as an escrow agent for a third-party business sale — even though this is not part of your usual service offering.
• A family law client insists you direct settlement funds through a cryptocurrency platform rather than a standard bank account, claiming it will “save time”
• A client in their late teens instructs your firm to purchase a multi-million-dollar property. When asked about the source of funds, they say the money “came from dad” but can’t provide documentation or a clear explanation. The funds are transferred from an offshore account held in the father’s name, and the client insists the purchase must be completed quickly with minimal questions.

Threshold Transaction Reports (TTRs)

When to lodge

You must submit a TTR whenever your firm receives cash or equivalent of AUD $10,000 or more in a single transaction or matter - even if it seems legitimate.

Relevant examples for law firms include:

• Cash deposits into your trust account
• Payment for legal services made in cash
• Cash received for settlement funds in a conveyancing matter

You must lodge a report regardless of suspicion.

What to include

• Your firm's details (name, AUSTRAC ID, submission date).
• Staff details (who completed the report).
• Customer details (same level as SMRs – names, DOBs, addresses, business details, beneficial owners).
• Matter details – date, time, location, amount, foreign currency info if relevant and the kind of designated service involved e.g. establishing a family trust
• Accounts/products if involved – trust account number, opening dates, signatories, instruments (e.g. cheques).
• Purpose of the matter (if known).
• If property related - unique reference number, value of the property, details of all involved, details of the property and any unique identifiers e.g. lot number

Exceptions

If cash is deposited via ATM/express deposit with no personal contact, or by a professional courier service, you don’t need to report the depositor’s details — but you must note the circumstances (e.g. “cash deposited via ATM, no personal contact”).

Law firm examples

• A client pays $15,000 in cash into your firm’s trust account as part of a property settlement.
• A client pays $12,000 in cash upfront to cover legal fees for a commercial litigation matter.
• A client brings $20,000 in cash to establish a trust and asks for it to be held pending investment instructions.
• A company director delivers $18,000 in cash to fund a share purchase agreement your firm is handling.

Annual AML/CTF compliance reports

Each year, every reporting entity must submit a compliance report to AUSTRAC.

• Period covered: 1 January – 31 December.
• Due date: 31 March the following year (e.g. 2026 report due by 31 March 2027).
• Content: Shows how your firm is meeting obligations — AML/CTF Program in place, staff training, record-keeping, reporting, and independent reviews.
• Format: Online