Designated services under the AML/CTF Act: section 6 explained for accountants, real estate agents, lawyers and dealers

How section 6 works

Section 6 of the Act contains tables of services. Each item describes a service and, usually, who the customer is for that service. If your business provides an item to a customer in the course of carrying on a business, and there is a geographical link to Australia, you are a reporting entity for that service. You can be covered for one part of your business and not another: the obligations attach to the designated services, but the program has to cover the whole business.

Professional services (accountants, bookkeepers, lawyers, conveyancers, TCSPs)

• Receiving, holding, controlling or managing a customer's money, accounts, securities or property as part of assisting them to plan or carry out a transaction (other than a tax or payroll function).
• Assisting a customer to buy, sell or transfer real estate or a body corporate, legal arrangement or business.
• Assisting with equity or debt financing of an entity, or with the organisation of contributions to create or manage one.
• Creating, restructuring, operating or managing a body corporate, trust, partnership or similar arrangement.
• Acting as, or arranging for someone to act as, a director, secretary, partner, trustee, nominee shareholder or registered office.
• Selling or transferring a shelf company.

Real estate services

• Brokering the sale, purchase or transfer of real estate on behalf of a buyer or seller. Both the seller and the buyer are the agent's customers, which is why the Rules allow the buyer's verification to be delayed until 28 days after exchange or 3 days before settlement.
• Selling or transferring real estate as the owner, in the course of a business, directly to a buyer (developers and other direct sellers).
• Not covered: residential property management and leasing, including rent collected through a trust account, on their own.

Dealers in precious metals and stones

• Buying or selling precious metals, stones or products for AU$10,000 or more in physical currency or virtual assets, in one transaction or in transactions that appear linked.
• The threshold is what triggers coverage; card and transfer payments are outside it.

Services that are not designated

• Preparing tax returns, financial statements, BAS and payroll.
• Property management, leasing and rent collection.
• Litigation, dispute resolution, legal advice, wills and estate planning, family and criminal law, employment law.
• Auditing and insolvency work in most cases; AUSTRAC has specific guidance for insolvency practitioners.
• Being a customer of a bank or using a payment service: that makes the bank the reporting entity, not you.

The geographical link

A service is captured when it is provided at or through a permanent establishment in Australia, or by an Australian resident or company from overseas in certain cases. An Australian firm serving an overseas client is covered; the overseas client's own country is then a risk factor in your assessment.

If you provide one designated service occasionally

Coverage does not depend on volume. A conveyancer who acts in two settlements a year is a reporting entity for those two. The program can be short and the risk assessment can say the exposure is small, but enrolment, due diligence, reporting and records still apply.