As AML/CTF reforms draw closer, many firms are asking an important question: what happens if compliance obligations are not met, and how might regulators respond? One aspect of the evolving regulatory framework is the introduction of section 172A examination powers, which allow AUSTRAC to require individuals to provide information or documents where they may hold material relevant to AML/CTF laws or certain criminal offences.
For conveyancers and legal practitioners preparing for the reforms, understanding how these powers work provides important context around how regulators may approach compliance and investigations.
The purpose of examination powers
AUSTRAC is responsible for monitoring compliance with Australia’s AML/CTF laws and identifying potential financial crime risks within the financial system. To do this effectively, the regulator needs mechanisms that allow it to obtain reliable information when questions arise about compliance or potential offences.
Section 172A provides AUSTRAC with a formal process for gathering evidence directly from individuals who may hold relevant information or documents. The aim is to assist investigations and ensure regulators can access the facts needed to assess risks, enforce the law where necessary, and support broader efforts to combat money laundering and terrorism financing.
Understanding section 172A examination powers
AUSTRAC can issue a notice requiring a person to attend an examination if the regulator believes the individual may have information or records relevant to compliance with AML/CTF laws or certain criminal offences.
A notice may require the recipient to:
- attend a formal examination conducted by an appointed examiner
- answer questions under oath or affirmation
- provide documents or records related to the matter being examined.
Receiving a section 172A notice does not necessarily mean wrongdoing has occurred. In some cases, AUSTRAC may simply be seeking clarification about events or compliance processes.
What an examination looks like
Examinations are conducted privately and are managed by the examiner overseeing the process. Those present may include the person being examined, their legal representative, authorised AUSTRAC staff, and any support personnel needed to assist with the examination, such as interpreters. Depending on the circumstances, confidentiality restrictions may apply, which can limit who the recipient is permitted to inform about the notice or the examination.
The examinee has the right to have an Australian legal practitioner present. The lawyer may attend the examination, ask questions of the person being examined, and in certain situations obtain a copy of the transcript.
During an examination, the examinee must answer questions relevant to compliance with the AML/CTF Act, rules or regulations, or related criminal offences. This obligation overrides most confidentiality duties, except in limited circumstances such as legal professional privilege, and may include questions about suspicious matter reports submitted to AUSTRAC.
What this means for conveyancers and legal practitioners
For conveyancers and legal practitioners, these powers highlight the increasing focus regulators are placing on transparency and accountability within the AML/CTF framework.
While section 172A examinations are investigative tools rather than everyday compliance requirements, they reinforce the importance of maintaining well-structured compliance processes. Firms should ensure that AML procedures are clearly documented, leadership understands the firm’s obligations, and records relating to client due diligence and risk assessments are properly maintained.
Staff involved in onboarding clients or handling transactions should also have a clear understanding of the firm’s AML processes so that compliance activities can be demonstrated if required.
How triSearch Compliance Centre can help
The triSearch Compliance Centre gives conveyancers and property lawyers a trusted, single workflow to meet all Tranche 2 AML/CTF requirements in one place, fully integrated within triConvey. This solution is designed to support the entire compliance lifecycle, including AUSTRAC enrolment guidance, firm and staff onboarding, customer KYC and risk assessment, AML reporting, staff training records, audit trails and 7-year record keeping.
