Striking the balance: anti-money laundering goals and legal privilege in Australia

Abstract

Criminals engage legal professionals for their skills and services to facilitate laundering of proceeds from crime. Despite this risk, Australia remains one of the few countries globally that is non-compliant with international anti-money laundering (‘AML’) standards set by the Financial Action Task Force (‘FATF’) which urge States to impose preventative measures on legal professionals to provide intelligence to assist law enforcement in detecting financial crime. Representatives of the legal community have vehemently opposed regulating legal professionals under Australia’s AML laws since the inception of Australia’s formal AML framework, fearing that it would cause irreconcilable tension with lawyers’ ethical duties to uphold legal professional privilege (‘LPP’). Although Australia is among the last countries to impose AML duties on legal professionals, its lawmakers can benefit from examining best practices in comparable, globally compliant jurisdictions. Through consideration of the regulatory frameworks in the United Kingdom and New Zealand, this article derives practical insights and offers actionable recommendations for Australian lawmakers and international stakeholders on how to preserve LPP to the greatest extent possible while advancing AML goals. While LPP is not a barrier to AML regulation, it is an important consideration for lawmakers.