AML Compliance for Conveyancers | Settlement Agents

Why Conveyancers Are Now Regulated

Property transfers, settlement accounts, and title management make conveyancing a high-risk channel for money laundering.

AUSTRAC and FATF assessments have consistently identified conveyancing as a vulnerability in Australia's AML/CTF regime. Conveyancers handle large settlement funds, manage title transfers, identify purchasing entities, and process multiple transactions with limited historical oversight. These activities create multiple pathways for criminals to legitimize illicit funds through property.

The Risk Profile: Property settlement is a critical point where beneficial ownership can be obscured through nominees, complex structures, or rapid entity changes. Conveyancers sit at the front line of detecting and preventing these schemes.

This is precisely why Tranche 2 of the AML/CTF Act now extends AML/CTF obligations to property conveyancers. Affected professionals include:

Conveyancers conducting property transfers
Settlement agents processing transactions
Licensed conveyancing practices
In-house conveyancers
Anyone preparing property transfer documents and handling settlement funds

The impact? You must now verify the true owner of purchasing entities, detect suspicious transaction patterns, monitor settlement accounts, and report to AUSTRAC. Non-compliance can result in criminal charges, loss of your licence, and penalties up to $6.26 million.

What You Need to Do

Follow these 5 critical steps before 1 July 2026.

1
Enrol with AUSTRAC

Enrolment opens 31 March 2026. You'll need to apply as an AML/CTF reporting entity. Visit austrac.gov.au to register. This is mandatory for all conveyancing professionals.
2
Build Your AML/CTF Program

Establish written policies and procedures covering customer due diligence, beneficial ownership identification, settlement account monitoring, transaction reporting, and suspicious activity procedures. Document everything clearly.
3
Verify Identities & Beneficial Ownership (CDD)

Conduct Customer Due Diligence on all parties: buyers, sellers, and mortgagees. For corporate purchases, identify the beneficial owner. Collect government-issued ID and verify it. Keep records for 7 years. This is critical for detecting nominee arrangements.
4
Monitor Settlement Accounts & Transactions

Implement transaction monitoring. Flag unusual activity: large cash deposits, rapid fund movements, deposits from unknown sources, or last-minute changes to purchasing entities. Document all reviews and your assessment of whether transactions are suspicious.
5
Report Suspicious Activity

If you suspect money laundering or terrorist financing, file a Suspicious Matter Report (SMR) directly to AUSTRAC. You must report within 3 business days. Common red flags in conveyancing include nominees, unexplained price variations, and last-minute changes.

Conveyancing-Specific Scenarios

Here's what to do when you encounter these common situations.

Scenario 1: Nominee Arrangements — The contract names one person as purchaser, but at settlement someone else appears with power of attorney, or the registered proprietor is different from the purchaser. This suggests a nominee arrangement designed to hide beneficial ownership. Ask for clarification. Identify the true beneficial owner. If the explanation is vague or the person refuses to disclose, file a Suspicious Matter Report.
Scenario 2: Last-Minute Purchasing Entity Changes — The contract is in one name, then shortly before settlement the purchaser changes to a company or trust. Last-minute changes to avoid scrutiny are a red flag. Ask why the change. Conduct full CDD on the new entity. Identify its beneficial owner. If the client becomes evasive, report it.
Scenario 3: Significant Price Variations — A property is purchased at a price significantly above or below recent market value with no clear justification. Price anomalies can indicate value-washing schemes. Make a note. Ask the parties to explain. If the justification is vague or inconsistent, consider whether this is a suspicious transaction requiring reporting to AUSTRAC.
Scenario 4: Cash Deposits to Trust Account — Large cash deposits appear in your settlement account from unknown sources or without clear explanation of where the funds originated. Cash deposits are inherently riskier than bank transfers. Ask the client to explain the source. Request statutory declarations if needed. If the source is unclear or suspicious, file an SMR.

Conveyancer AML/CTF Compliance Checklist

Use this checklist to ensure you're ready before 1 July 2026. Click each item as you complete it.

Enrol with AUSTRAC by 1 July 2026
Document AML/CTF policies covering settlement transactions
Appoint an AML/CTF Compliance Officer
Conduct CDD on all buyers, sellers, and mortgagees
Identify beneficial owners of corporate purchasers
Verify government-issued ID in person or by video
Keep CDD records for at least 7 years
Implement settlement account transaction monitoring
Train all staff on red flags and reporting procedures
File SMRs with AUSTRAC when required

What Happens If You Don't Comply

The stakes are real. Here's what you're facing if you don't comply.

$6.26M

Maximum civil penalty per breach for individuals. Corporations face up to $31.3 million.

Criminal charges — Up to 2 years imprisonment for tipping off, 5 years for structuring offences, life for serious money laundering
Loss of licence — Your conveyancing licence can be suspended or cancelled by the state regulator
Professional liability — Civil lawsuits from clients, professional indemnity claims, or regulatory enforcement
Reputational damage — Public reporting of enforcement action by AUSTRAC and state regulators
Ongoing scrutiny — AUSTRAC audits and inspections of your settlement accounts and transaction records

Recent precedent: AUSTRAC has issued penalties of $1.3 billion to Westpac and $700 million to Crown Resorts for AML/CTF breaches. With conveyancing now under the regime, enforcement will target professionals who fail to implement proper controls over settlement transactions.

How AMLPrep Helps

We make compliance simple. Start getting compliant in under 30 minutes.

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Free Readiness Quiz — 15 questions to assess your current compliance gaps and get a customized action plan.
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Conveyancer-Specific Guides — Guides on beneficial ownership verification, settlement account monitoring, and suspicious transaction reporting for conveyancers.
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Ready-Made Templates — AML/CTF policies, CDD checklists for property purchases, settlement account monitoring templates, and SMR checklists designed for conveyancing.
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Training Course — Comprehensive online course for you and your team. Certificate of completion for AUSTRAC compliance.
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Software & Tools — Automate CDD, settlement transaction monitoring, and suspicious activity reporting with our platform built for conveyancers.
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Expert Consultants — Talk directly with AML/CTF compliance specialists who understand conveyancing-specific risks and procedures.

Frequently Asked Questions

Answers to the most common questions from Australian conveyancers.

Who is considered the "beneficial owner" in a property purchase? +

The beneficial owner is the real person who ultimately owns or controls the property. If a company purchases property, the beneficial owner is the person(s) who own or control that company. If a trust purchases property, the beneficial owner is the beneficiary or settlor. You must identify the beneficial owner even if the registered proprietor is a company or trust. This prevents use of corporate structures to hide real ownership.

What should I do if the buyer refuses to disclose beneficial ownership? +

You cannot proceed with the transaction. CDD and beneficial ownership verification are mandatory. If a client refuses to provide this information, you must decline to act. Do not proceed. Document the refusal in your file. Refusal to cooperate may itself be reportable to AUSTRAC as suspicious activity.

How do I verify identity for an overseas buyer? +

You must still conduct full CDD. Overseas buyers require the same identity verification as Australian buyers. Collect a copy of their passport and verify it through appropriate channels. If the buyer is in Australia, conduct verification in person or by video. If overseas, arrange video verification. Document your process. You may need to conduct Enhanced Due Diligence for international transactions.

What counts as a "last-minute change" that's suspicious? +

Changes to the purchasing entity within days of settlement. For example: the contract is in one person's name, then 3 days before settlement a company is substituted as purchaser. Changes that occur after title is underway, or without clear business justification, are red flags. They suggest an attempt to obscure beneficial ownership. Ask for an explanation. If it's vague or evasive, consider reporting.

Do I need to report a suspicious transaction even if I'm not sure? +

Yes, if you suspect on reasonable grounds. You don't need proof — just a reasonable suspicion based on your professional experience. If something feels wrong — nominee arrangements, price anomalies, vague explanations, or evasive clients — file a Suspicious Matter Report to AUSTRAC. It's better to report and be wrong than to stay silent. Your report is confidential.

How long do I keep CDD records and settlement files? +

You must keep CDD records for at least 7 years. This includes identity documents, beneficial ownership verification, transaction records, and any notes on suspicious activity monitoring. Even if a settlement is completed, keep the full file for 7 years. AUSTRAC may audit your records. Proper record-keeping is essential for demonstrating compliance.

AML Compliance for Conveyancers — Your New Legal Obligation Starts July 1