Received a Section 167 Notice from AUSTRAC?

If your business has received a section 167 notice from AUSTRAC, you must treat it seriously. The notice requires you to provide information about your business activities. Your response demands careful thought.

A poorly worded response can bring the full weight of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) (AML/CTF Act) onto your business. This can happen even where the AML/CTF Act does not apply to you.

This article explains what a section 167 notice means, how it can affect your business and what steps you should take.

What is a section 167 notice?

Section 167 of the AML/CTF Act gives AUSTRAC the power to compel a person or business to provide information. AUSTRAC now uses this power to identify businesses that appear to provide designated services but have not enrolled.

On 1 July 2026, the AML/CTF regime expanded to cover tens of thousands of new businesses. The expansion (known as Tranche 2) captures sectors that include:

• real estate agents
• lawyers and conveyancers
• accountants
• trust and company service providers
• dealers in precious stones and metals

AUSTRAC is now issuing section 167 notices to businesses in these sectors that have not enrolled.

Consequences of non-compliance

A failure to respond to a section 167 notice can lead to further regulatory scrutiny and enforcement action. Failure to comply can also attract significant civil penalties under the AML/CTF Act. AUSTRAC has stated that businesses which ignore their obligations should expect a regulatory response.

The broader risks include reputational damage and legal exposure. Non-compliance can also affect your relationships with banks and other service providers.

Characterisation of the business

Whether the AML/CTF Act applies to your business turns on one question: does your business provide a “designated service”? The characterisation of your activities is critical. If AUSTRAC incorrectly assumes that you are a reporting entity, you risk ongoing regulatory obligations that do not apply to you.

Many businesses in the newly captured sectors do not provide designated services. For example:

• a builder who constructs homes but does not sell land;
• a law firm that provides advice outside of the AML/CTF regime (such as environmental or employment advice);
• a jeweller who repairs items but does not deal in precious metals.

Your response to the section 167 notice must accurately describe what your business does. It should not concede a status that does not apply.

Carve-outs and exemptions

The legislation contains specific exclusions. For example, a barrister who acts on a solicitor’s instructions does not provide a designated service.

However, whether an exclusion applies is highly fact-specific. There is no de minimis exemption. A single designated service is enough to make your business a reporting entity. Each exclusion requires careful analysis of your activities against the relevant legislative provisions.

How we can help

Our firm advises businesses across the Tranche 2 sectors on their AML/CTF obligations. We can assist you with:

• the scope and response to a section 167 notice
• an assessment of whether your business is a reporting entity
• identification of applicable exemptions and carve-outs
• enrolment and AML/CTF program implementation, if required

If you have received a section 167 notice, contact Amber Crosthwaite at amber.crosthwaite@lavan.com.au or Andreas Geronimos at andreas.geronimos@lavan.com.au before you respond.

We can help you understand what the notice means and what to do next.

Disclaimer

The information contained in this publication does not constitute legal advice and should not be relied upon as such. You should seek legal advice in relation to any particular matter you may have before relying or acting on this information. The Lavan team are here to assist.