Since 1 July 2026, Australian lawyers, conveyancers, real estate agents, accountants and trust and company service providers have had to meet anti-money laundering obligations when they help clients buy or sell property, manage client money, or set up companies and trusts. This is why families from mainland China and Taiwan are now being asked to prove who they are, who ultimately owns their companies and trusts, and where the money for a transaction, and sometimes their wealth overall, came from. These questions are a legal requirement, not a sign of suspicion, and a well-prepared family usually moves through them without delay.
What changed: the “tranche 2” reforms
Australia’s Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (the AML/CTF Act) has applied to banks, remitters, casinos and other financial businesses for many years. The Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024, which passed Parliament in late November 2024 and received Royal Assent on 10 December 2024, extended the regime to a second group of businesses, commonly called “tranche 2”. The detailed obligations are set out in the Anti-Money Laundering and Counter-Terrorism Financing Rules 2025, made by AUSTRAC (the Australian Transaction Reports and Analysis Centre) in 2025, and in AUSTRAC’s guidance.
The key dates were:
- 31 March 2026: most of the amended Act and the new Rules commenced, and businesses providing tranche 2 services could begin enrolling with AUSTRAC.
- 1 July 2026: the obligations started to apply to real estate professionals, lawyers, conveyancers, accountants, trust and company service providers, and dealers in precious stones and metals.
- 29 July 2026: the general deadline for those businesses to enrol with AUSTRAC (enrolment is required within 28 days of first providing a regulated service).
A firm that did not ask about the origin of funds in 2025 may now ask detailed questions. It is not being unhelpful; it is complying with a law that now applies to it.
Which services are covered
The professions are not regulated for everything they do, only for “designated services” listed in the Act. The ones most relevant to Chinese and Taiwanese families are:
| Service | Typical examples |
|---|
| Brokering the sale, purchase or transfer of real estate | Selling agents and buyers’ agents acting on a residential or commercial purchase |
| Developers selling real estate without an independent agent | Off-the-plan apartments, house-and-land packages, lots in new subdivisions |
| Assisting in planning or carrying out a transfer of real estate | Conveyancing and legal work on a property purchase or sale |
| Receiving, holding, controlling or managing a client’s money or property in a transaction | Holding deposits or settlement funds in trust, or acting under authority over a client’s account |
| Buying, selling or transferring a business, or a company or trust interest (where there is a 25% or greater stake or control) | Sale of a family company, share or unit transfers |
| Creating or restructuring a company, trust or other legal arrangement | Drafting a family trust deed, incorporating a company, a restructure |
| Acting as, or arranging for someone to act as, a director, secretary, trustee, partner or nominee shareholder | A professional trustee or corporate trustee, nominee arrangements |
| Providing a registered office or business address | Address services for a company with no operating office in Australia |
There are exclusions. For example, leases of 30 years or less and routine property management are not covered, and transfers of real estate that result from a court or tribunal order are excluded. Whether particular work is a designated service depends on the facts.
What the checks involve
Customer due diligence
Before providing a designated service, the firm must carry out initial customer due diligence (CDD). Broadly, it must establish on a reasonable basis who the customer is, who the customer’s beneficial owners are, and who is acting on the customer’s behalf; whether any of them is a politically exposed person or subject to targeted financial sanctions; the nature and purpose of the business relationship; and the money laundering and terrorism financing risk the customer presents. If CDD cannot be completed, the firm generally cannot go ahead with the service.
Where a real estate agent acts for both sides, AUSTRAC treats both the seller and the buyer as customers. A buyer may therefore be checked by the agent, by their own lawyer or conveyancer, and, if borrowing, by the bank. Firms can sometimes rely on another firm’s identification checks, but clients should expect some repetition.
Beneficial ownership
If the buyer or client is a company or a trust, the firm must look through it to the individuals who ultimately own or control it. For a company, that usually means anyone holding 25% or more, directly or through other entities, and anyone who controls it in other ways. For a trust, it means the trustee, the appointor or other person with power to remove the trustee, and the beneficiaries or classes of beneficiaries. Holding structures in Hong Kong SAR or elsewhere are not a problem in themselves, but each layer must be documented.
Politically exposed persons
A politically exposed person (PEP) includes someone who holds or has held a prominent public position, such as a senior government, military, judicial or party official or a senior executive of a state-owned enterprise, and their immediate family members and close associates. For families from mainland China, where senior managers of state-owned enterprises and party and government officials are common in extended families, this question deserves a careful and honest answer. For a foreign PEP, AUSTRAC requires enhanced due diligence, senior management approval, and reasonable measures to establish the source of wealth and source of funds.
Enhanced due diligence, source of funds and source of wealth
AUSTRAC describes the two concepts this way:
- Source of funds: how and where the customer obtained the money for this particular transaction or service.
- Source of wealth: where the customer’s overall body of wealth and assets came from, for example business ownership, employment, investment or inheritance.
Enhanced due diligence applies where the risk is higher, for example for foreign PEPs, complex structures, large transactions inconsistent with the client’s known profile, funds arriving from several unrelated payers, or links to higher-risk jurisdictions. AUSTRAC’s guidance makes two points worth noting: money coming from a bank is not presumed to be clean, and simply showing that the funds came from an account in the client’s name is not enough. The firm needs a credible account of how the money came to be in that account.
Ongoing monitoring, reporting and confidentiality
The obligations do not end at the first meeting. Firms must monitor the relationship, update information when circumstances change and, where they suspect on reasonable grounds that a matter may be linked to crime or that a person is not who they claim to be, lodge a suspicious matter report with AUSTRAC. They must also report physical cash transactions of A$10,000 or more. The law prohibits a firm from disclosing information about a suspicious matter report where that would, or could reasonably be expected to, prejudice an investigation (the “tipping off” offence). A firm may therefore be unable to explain why it has asked for more or declined to act. Records must be kept for at least seven years.
For law practices, legal professional privilege continues to apply, and the reforms include a process for claiming it. Privilege does not, however, excuse a lawyer from doing CDD.
What documents families are typically asked for
Every firm sets its own risk-based procedures, so the list differs, but a well-prepared file for a significant property purchase or structure usually includes the following.
| Category | Examples |
|---|
| Identity | Passport; mainland China resident identity card or Taiwan national identification card; Australian visa; proof of residential address |
| Companies and trusts | Certificate of incorporation, register of members and directors, organisation chart showing each layer up to the individuals; trust deed and any variations, details of trustee, appointor and beneficiaries |
| Source of funds (this transaction) | Bank statements showing the funds accumulating and their transfer to Australia; remittance records; loan agreements; for a gift from parents, a signed gift letter and the parents’ own bank records |
| Source of wealth (overall) | Business registration and financial statements; share or business sale agreements; property sale contracts and settlement statements; employment contracts and payslips; tax returns or individual income tax records; probate or inheritance documents; investment statements |
| Supporting formalities | Certified copies, and translations into English by a NAATI-certified translator; where required, notarised documents from mainland China or authenticated documents from Taiwan |
A short written explanation tying the documents together (for example, “proceeds of sale of the family’s Shenzhen apartment in 2021, held in a deposit account, transferred to Australia in 2026”) is often as useful as the documents themselves.
The mainland China and Taiwan context
Australian firms do not enforce foreign currency rules, but how money left mainland China or Taiwan is part of the story they must understand.
Mainland China. Individuals may purchase foreign currency up to an annual facilitation quota equivalent to US$50,000 per person, and the declaration made to the bank states that the funds will not be used for overseas property purchases, securities investment or certain insurance products, which remain capital account items. Larger or other transfers must go through channels permitted by the State Administration of Foreign Exchange (SAFE) and supported by documents. SAFE has said that borrowing other people’s quotas undermines its oversight, and false declarations can lead to a person being placed on a watch list and losing the facilitation quota.
From an Australian compliance point of view, the difficulty with informal or “underground” channels, or with money arriving in many small transfers from different relatives and friends, is simple: the firm sees funds it cannot trace to the client’s own legitimate wealth, from payers it has not identified, through routes that may have breached another country’s law. That combination points toward enhanced due diligence, and possibly a report, and may mean the firm cannot act. We do not advise on mainland China’s foreign exchange rules; families should obtain that advice in mainland China before funds are moved, and keep the paperwork.
Taiwan. Taiwan’s controls are lighter, but banks require foreign exchange declarations, and the Central Bank sets annual limits on individuals’ cumulative foreign exchange settlements above which approval is needed. Remittance records from Taiwanese banks are usually straightforward evidence. Taiwan is not a party to the Apostille Convention, so documents from Taiwan are generally notarised and then authenticated before use in Australia.
Consider a typical situation
A couple in Hangzhou plan to buy a Melbourne apartment for their daughter, who is studying here. Part of the money comes from the sale of an apartment in mainland China several years ago, part from the father’s share of a family manufacturing business, and the funds will be held for the daughter in a trust. That one purchase involves several designated services: the agent’s brokering, the conveyancing, the creation of a trust, and possibly the firm holding funds. Each firm will ask about identities, the trust’s controllers and beneficiaries, and the origin of the money.
A family that arrives with the sale contract and settlement record for the Hangzhou apartment, bank statements showing the proceeds, the company’s records and dividend history, remittance records showing lawful transfers, certified translations, and a short summary letter will usually satisfy every firm quickly. A family whose money arrived from a dozen relatives’ accounts with no explanation may face weeks of questions, a missed settlement date or a firm that declines to act. This is a composite illustration only; each case turns on its own facts. Foreign buyers will also need to consider FIRB approval and state foreign purchaser duty and land tax surcharges, which are separate from AML checks (see Foreign Owners of Australian Property).
Practical points and common mistakes
- Start before you sign. CDD must be completed before the service is provided. Gather documents before signing a buyer’s agency agreement or a contract of sale, not in the days before settlement.
- Keep the chain of funds clean. Where possible, move money in a small number of documented transfers from the client’s own accounts, through permitted channels, with a stated purpose that matches the transaction.
- Document family gifts and loans properly. Parents funding an adult child should record whether it is a gift or a loan and keep their own source-of-wealth evidence, which also matters for later family law and estate questions (see Family Advances: Loan or Gift? and Property in a Child’s Name).
- Be consistent. The story told to the bank, the lawyer, the agent and the tax authorities should match. Inconsistency is itself a risk indicator, and CRS data means tax authorities increasingly see the same accounts (see CRS and Mainland China’s Overseas Income Checks).
- Do not use nominees to avoid scrutiny. Putting property in a relative’s or friend’s name does not avoid the checks, since the firm must identify the person on whose behalf it is acting, and it creates separate legal and tax risks.
- Answer the PEP question carefully. A PEP connection does not prevent a transaction, but a later discovery that it was not disclosed causes far more difficulty.
- Translate early. Certified translation and notarisation of Chinese-language records can take weeks.
Why a well-prepared file protects the family
For wealthy families, a well-prepared source-of-wealth file does more than get one transaction through. It can be updated and reused for the next purchase, structure, bank account or estate administration. It also limits how widely sensitive information spreads, because the family decides what is assembled and how it is explained, rather than answering piecemeal requests. It also shows that the family’s Australian assets were acquired with traceable, lawfully transferred funds, which supports the family’s position if questions are raised later by a bank, a tax authority or, in a family dispute, by another party. Families planning a move to Australia should also consider timing and structures before becoming tax resident (see Before Becoming an Australian Tax Resident).
How we can assist
As a law practice providing designated services, we carry out these checks ourselves, and we also help clients prepare for them. We can review a family’s proposed purchase, trust or company structure before it begins, identify the documents each firm involved is likely to require, organise certification, translation and notarisation, and prepare a clear summary of the source of funds and wealth. We work alongside lawyers and tax advisers in mainland China, Taiwan and Hong Kong on the foreign law and tax aspects, and with families’ private bankers and accountants so that the information provided is consistent.
Related reading
Chua Tan Associates acts for families and their professional advisers on Australian legal matters with a cross-border dimension, working alongside lawyers and tax advisers in mainland China, Taiwan and Hong Kong. To arrange a confidential consultation, please contact our Melbourne office on +61 3 9602 3988 or submit an enquiry. Advice is available in English, Mandarin and Cantonese.
Justin Chua (蔡智勋), lawyer and mediator, Chua Tan Associates, Melbourne. General information only, not legal or tax advice.
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