AML/CTF for Conveyancers: Your Complete Compliance Guide

Licensed conveyancers are squarely within the scope of Australia's Tranche 2 AML/CTF reforms. From 1 July 2026, conveyancers handling property transfers must enrol with AUSTRAC, implement an AML/CTF program, and conduct customer due diligence on every transaction. This guide covers the specific risks and obligations that apply to conveyancing practices.

Why Conveyancers Are Targeted

Property is one of the most common vehicles for money laundering in Australia. AUSTRAC and the FATF have repeatedly identified real property transactions as a primary channel through which criminal proceeds are integrated into the legitimate economy. Conveyancers sit at the centre of these transactions — they facilitate the legal transfer of title, manage settlement funds, and interact with electronic settlement platforms like PEXA.

Criminals exploit conveyancing in several ways:

• Purchasing property with illicit funds to convert cash into a legitimate asset
• Using nominee buyers or shell companies to obscure who actually owns the property
• Cycling funds through trust accounts during the settlement process
• Manipulating property values through under- or over-valuation to move money across borders

Australia's real estate sector is estimated to be exposed to billions of dollars in laundered funds each year. Conveyancers who fail to identify suspicious activity face both legal liability and reputational damage.

Your Core Obligations

As a reporting entity under Tranche 2, conveyancers must meet the following requirements:

1. Enrol with AUSTRAC

Register your practice as a reporting entity before the compliance deadline. Enrolment is free and can be completed through AUSTRAC's online portal. You will need your ABN, business details, and the name of your designated AML/CTF compliance officer.

2. Develop an AML/CTF Program

Your program must include Part A (risk-based systems and controls) and Part B (customer identification procedures). For conveyancers, the program should specifically address the risks inherent in property transactions, including the use of trust accounts, third-party payments, and electronic settlement.

3. Conduct Customer Due Diligence

Before acting on a property transfer, you must verify the identity of your client. For individual clients, this means collecting and verifying government-issued photo ID. For corporate or trust clients, you must identify the beneficial owners — anyone who ultimately owns or controls 25% or more of the entity.

4. Report Suspicious Matters

If you form a suspicion that a transaction may involve money laundering or terrorism financing, you must lodge a Suspicious Matter Report (SMR) with AUSTRAC. You must not tell your client that a report has been made — this is the tipping off offence and carries criminal penalties.

PEXA and Electronic Settlement

Most property settlements in Australia now occur through PEXA (Property Exchange Australia), the electronic conveyancing platform. PEXA introduces both opportunities and challenges for AML/CTF compliance.

Opportunities: PEXA's digital verification processes provide an additional layer of identity checks. The platform requires workspace participants to be verified, and settlement funds flow through monitored channels rather than physical cheques.

Challenges: The speed and automation of electronic settlement can reduce the time available for thorough due diligence. Conveyancers must ensure their CDD processes are completed before entering the PEXA workspace, not as an afterthought during settlement.

Key points for PEXA compliance:

• Verify client identity before creating or joining a PEXA workspace
• Confirm the source of funds for the purchase, particularly for cash-heavy transactions
• Watch for last-minute changes to settlement details, especially changes to the receiving bank account
• Document all verification steps in your AML/CTF records

Settlement-Specific CDD Considerations

Property settlements present unique CDD challenges that conveyancers must address:

Source of Funds: You should understand where the purchase funds are coming from. A first-home buyer using a bank loan presents a different risk profile from a foreign purchaser settling in cash. Ask questions and document the answers.

Third-Party Payments: Be alert when settlement funds come from a party other than the named purchaser. Third-party payments are a significant red flag and require additional scrutiny.

Trusts and Nominee Structures: If the purchaser is a trust or company, drill down to identify the ultimate beneficial owner. Do not accept nominee arrangements at face value — understand who truly controls the entity.

Foreign Purchasers: Transactions involving overseas buyers, foreign funds, or cross-border transfers carry elevated risk. Apply enhanced due diligence in these situations, including verifying the source of overseas funds and checking against sanctions lists.

Red Flags for Conveyancers

Watch for these warning signs during property transactions:

• Client is reluctant to provide identification or provides inconsistent documents
• Purchase price significantly above or below market value without clear explanation
• Funds arriving from multiple unrelated sources or from offshore accounts
• Client wants to settle urgently without a clear commercial reason
• Last-minute change of purchaser name or settlement account details
• Use of complex corporate or trust structures for a straightforward residential purchase
• Client pays a large deposit in cash or through a third party

Record Keeping

All CDD records, transaction documents, and correspondence related to AML/CTF compliance must be retained for seven years after the transaction is completed or the client relationship ends. This includes identity verification documents, risk assessments, file notes, and any SMRs lodged.

Getting Started

The compliance deadline is approaching, and conveyancing practices should be preparing now. Building an AML/CTF program from scratch can be time-consuming, but it does not need to be expensive or complicated.

ComplyReady provides purpose-built AML/CTF compliance software designed for Tranche 2 businesses, including conveyancers. Our platform generates your AML/CTF program, guides you through customer due diligence, and helps you manage your record-keeping obligations — all in one place.

Get started with ComplyReady today and be compliant before the deadline.