Designated service

What services has AUSTRAC identified as not being a designated service?

A number of services have been identified as not being a designated service. Please note that this is not a definitive list.

Real estate (item 1)

• The buying, selling, or transferring of real estate, body corporate, or a legal arrangement pursuant to a court or tribunal order.
• Transfers by operation of law eg: transfers by survivorship.
• Short term leases of less than 30 years or less.
• Minor interests such as easements, restrictive convenants.
• Mortgagee interests.
• Dwellings not attached to the land eg: mobile homes, caravans, some retirement villages where the resident owns the dwelling but not the land.
• Town agent services.

Advisory or legal dispute resolution services (items 2, 4)

• General advice work that ‘influences’ a client’s decision rather than ‘directly advancing’ a transaction eg: general advice on financing options including equity and debt financing but this advice does not directly advance the organising, planning or executing of a specific financing transaction.
• Historical analysis on whether a past transaction was lawful or valid.
• Dispute resolution services that do not ‘advance’ a transaction and only relate to determining legal questions on matters that have already occurred eg: litigation and mediation services, drafting consent orders to settle litigation, representing clients on criminal charges, personal injury matters.

Trust account payments (item 3)

• Money held in your trust account for the payment of legal fees or disbursements including counsel fees.
• Money being held or managed to be received or payable under an order of a court or tribunal.
• Payments to or from a government body (eg: ATO), insurer, court/tribunal, or public international organisation.
• Money being held as an ancillary payment to support a non-designated service of your practice. For example, if you provide litigation services and receive settlement funds into your trust account under privately negotiated settlement agreements (that are not subject to a court order), and you hold those funds in escrow and release the funds to the client when the settlement conditions are met. This service is likely to fall within the exemption in section 6 (5C)(b) of the AML/CTF Act. However, if the practice also provides other designated services, this exemption will not apply.

Wills and estates

• Drafting of a will and subsequent creation of a testamentary trust.
• Obtaining grants of probate or letters of administration.
• Preparing a power of attorney for a natural person.

Restructuring of a body corporate or legal arrangement unrelated to legal form (item 6):

• Organisational staffing profile changes.
• Restructuring IT systems.
• Advice on restructuring a body corporate’s internal governance or business operations to avoid insolvency.

What should I do if believe I am not providing a designated service?

• Practitioners should go through the definition of professional ‘designated services’ in Table 6 of s6(5B) of the AML/CTF Act and assess why they believe they will not be providing such a service as from 1 July 2026.
• Document this assessment with an explanation as to why you believe that you will fall outside the scope of these services and date this internal record.
• Ensure that you educate and communicate this policy to all your staff (not just the solicitors) to ensure that no one within your practice inadvertently provides a designated service – scope creep is a major issue for those practices that believe that they are out of the AML/CTF regime. If you provide one designated service, you will be required to enrol with AUSTRAC and ensure that you are compliant with the regime. 
• You may wish to consider some process in the onboarding of your clients that flags this issue for your staff. Remember that all new staff will need to be informed of this policy going forward.
• For those practitioners who manage a trust account, please remember that you cannot allow your client to use your trust account as a defacto bank account even if you are not providing a designated service. If you do so, you may find yourself providing a designated service under item 3 of table 6.
• Revisit your position and policy regularly, at least annually if your practice is static in size and services but if you decide to merge or introduce new legal services, you must assess whether you will then fall within the regime at that time. Once again, you should document your review and if necessary, update.
• Subscribe to updates | AUSTRAC – this keeps you up to date of any future AML/CTF changes which could impact your practice at a later date.
• Remember that even if you are not caught by the AML/CTF regime, you will still have ongoing professional, ethical and trust accounting obligations and statutory duties such as the Criminal Code Act 1995 (Cth) eg: dealing with proceeds of crime.