‘Designated Services’ of Professional Service Providers under the AML/CTF Act
With the AML/CTF regime for Tranche 2 entities coming into effect on 1 July 2026 under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) (AML Act), many professional service providers are still considering whether the services they provide, or will provide, are captured as “designated services”.
We have previously discussed the various categories of designated services that apply to Tranche 2 entities including professional service providers: Getting ready to enrol with AUSTRAC: Anti-Money Laundering Tranche 2 Entities Guide. However, some of the terminology is still somewhat unclear in the categories. In this article we discuss some of the terminology used and the guidance to date on how it may apply.
Designated Services – 5B - Table 6, AML Act -
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Item No |
Description |
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1 |
assisting a person in the planning or execution of a transaction, or otherwise acting for or on behalf of a person in a transaction, to sell, buy or otherwise transfer real estate, where: (a) the service is provided in the course of carrying on a business; and (b) the sale, purchase or other transfer is not pursuant to, or resulting from, an order of a court or tribunal |
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2 |
assisting a person in the planning or execution of a transaction, or otherwise acting for or on behalf of a person in a transaction, to sell, buy or otherwise transfer a body corporate or legal arrangement, where: (a) the service is provided in the course of carrying on a business; and (b) the sale, purchase or other transfer is not pursuant to, or resulting from, an order of a court or tribunal |
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3 |
receiving, holding and controlling (including disbursing) or managing a person’s: (a) money; or (b) accounts; or (c) securities and securities accounts; or (d) virtual assets; or (e) other property; as part of assisting the person in the planning or execution of a transaction, or otherwise acting for or on behalf of a person in a transaction, in the course of carrying on a business (other than in a circumstance covered by subsection (5C)) |
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4 |
assisting a person in organising, planning or executing a transaction, or otherwise acting for or on behalf of a person in a transaction, for equity or debt financing relating to: (a) a body corporate (or proposed body corporate); or (b) a legal arrangement (or proposed legal arrangement); in the course of carrying on a business |
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5 |
selling or transferring a shelf company, in the course of carrying on a business |
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6 |
assisting a person to plan or execute, or otherwise acting on behalf of a person in, the creation or restructuring of: (a) a body corporate (other than a corporation under the Corporations (Aboriginal and Torres Strait Islander) Act 2006); or (b) a legal arrangement; in the course of carrying on a business |
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7 |
acting as, or arranging for another person to act as, any of the following, on behalf of a person (the nominator), in the course of carrying on a business: (a) a director or secretary of a company; (b) a power of attorney of a body corporate or legal arrangement; (c) a partner in a partnership; (d) a trustee of an express trust; (e) a position in any other legal arrangement that is functionally equivalent to a position mentioned in any of the above paragraphs; other than in a circumstance covered by subsection (5E) |
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8 |
acting as, or arranging for another person to act as, a nominee shareholder of a body corporate or legal arrangement, on behalf of a person (the nominator), in the course of carrying on a business |
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9 |
providing a registered office address or principal place of business address of a body corporate or legal arrangement, in the course of carrying on a business |
There are exceptions that apply to some of the above categories that are set out in section 6(5B), with those exceptions being set out in subclauses, (5C) (5D), (5E), (6), (6A), (6B) and (7).
Key wording
We have highlighted in bold in the table, some wording that causes confusion.
‘Assisting’: This is not defined in either the AML Act or the Anti-Money Laundering and Counter-Terrorism Financing Rules 2025 (the Rules). You would adopt its ordinary meaning which is capable of capturing a wide range of conduct.
‘Otherwise acting for or on behalf of’: This is also not defined but again given its ordinary meaning, would capture a wide range of conduct.
‘Planning’: This term is not defined but AUSTRAC Guidance interprets this term to mean the ‘preliminary and preparatory steps that directly advance the outcome specified in the designated service’.[1] This would require a direct relationship between the service and an outcome or transaction. This view makes sense having regard to the purpose of the legislation.
Meaning of ‘in the course of carrying on a business’
The term ‘business’ is defined in section 5 of the AML Act as ‘including a venture or concern in trade or commerce, whether or not conducted on a regular, repetitive or continuous basis’. The Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2024, Explanatory Memorandum (Explanatory Memorandum) at p. 27 states that the term is intended to have a broad interpretation. This is consistent with AUSTRAC Guidance that a service can be provided in the course of business even if the service is not the only services provided by the business or is only provided once.
Relevant nexus
In order for a specific activity to fall within a designated services category in Table 6, there should be a direct connection between the activity and the relevant transaction or outcome. The AUSTRAC Guidance takes the view that merely influencing how a customer proceeds or just providing general advice or ancillary services is not sufficient to establish that direct relationship. [2]
For example, the AUSTRAC Guidance lists the following activities that are typically captured by item 1 of Table 6:
· preparing, reviewing or lodging the contract of sale and transfer of land instrument
· researching property titles, strata documents, or land use specifications
· coordinating with financial institutions regarding payments and discharge of mortgage for the real estate transfer
· holding funds on behalf of a buyer and disbursing trust funds at settlement, or organising for release of deposit to the seller
· preparing for financial settlement
· preparing documents to be provided to a registry authority for transfer of real estate on behalf of a client.
The concept of a link between the service and a transaction can be seen also in the Explanatory Memorandum at paragraph 361:
The requirement for an activity to be related to a transaction to sell, buy or transfer ‘real estate’ in item 1 of table 6 means that where activities listed above can, and are being, carried out for another purpose, they will not trigger the designated service. For example, conducting land title searches unrelated to an actual transaction for sale, purchase or transfer of the real estate would not be captured under this designated service.
Key takeaways
· On and from 1 July 2026 professional service providers will need to assess the service they are being asked to provide and determine whether that service may be a ‘designated service’ in the circumstances.
· Some services will very clearly be covered and some are not. It’s the ones in between that will require some thought against what is being requested.
· If you haven’t already, and you are a Tranche 2 entity that will provide designated services, don’t forget to enrol with AUSTRAC by 29 July 2026 at the latest.
Should you require advice on any aspect of your obligations under the AML/CTF Act, please contact our AML/CTF team.
Author: Rebecca Hegarty
See also: Anti-Money Laundering and Counter Terrorism Financing (AML/CTF).
This publication is intended as a source of information only. No reader should act on any matter without first obtaining professional advice.