Caltury Resource

KYC checklist for AU conveyancers

Use this checklist on every property matter once AML/CTF Tranche 2 commences. Branches by buyer type after the matter intake gateway.

Tip: print one copy per matter and stash it in the file.

Matter intake gateway (run on every matter)

Steps to run on every conveyancing matter at intake
Step	Why	Document or evidence
Confirm the matter is a designated service	AML/CTF Act 2006 sch.1 covers assisting in the buying or selling of real estate; conveyancing falls within that scope once the legislation commences for Tranche 2.	Matter type recorded as 'sale' or 'purchase' in your practice management system, plus a one-line note from the conveyancer.
Identify the buyer type	The KYC flow branches by customer type: individual, Australian company or trust. Mis-classification at intake leads to incomplete records.	Tick box on the intake form: Individual / Company / Trust / Other. If 'Other', escalate to the AML/CTF Compliance Officer.
Confirm whether an agent is acting	Where an agent (for example a power of attorney holder or accountant) acts for the buyer, both the buyer and the agent must be identified.	Authority document on file: power of attorney instrument, letter of engagement, board resolution or equivalent.
Check the matter for an immediate sanctions concern	If a sanctions hit appears on the buyer, agent or beneficial owner at intake, the matter cannot proceed and an SMR is considered.	Screening result recorded with the date, list version and reviewer name.

Branch A — individual buyer

Use this branch for a buyer purchasing in their own name (one or more natural persons, no entity in between).

KYC steps for an individual buyer
Step	Why	Document or evidence
Collect the buyer's full legal name	Name is the primary identifier and is matched against the verification document.	Buyer-provided in writing, captured on the intake form.
Collect the buyer's date of birth	Required by the AML/CTF Rules for individual customer identification.	Buyer-provided, verified against the photo ID below.
Collect the buyer's residential address	Required for individual customer identification. PO box alone is not sufficient.	Buyer-provided, verified against a recent utility bill, bank statement or rental agreement (issued within the last 3 months).
Verify identity from a reliable and independent source	AML/CTF Rules Part 4 requires identity to be verified by reliable and independent documentation or data.	Certified copy of an Australian passport, driver licence or Medicare card; or an electronic verification result from a Document Verification Service participant.
Take and retain a copy of the verification document	The Firm must be able to demonstrate to AUSTRAC how identity was verified.	Copy stored in the matter file, with the verification date and the staff member who performed the check.
Screen the buyer against the DFAT Consolidated List	Sanctions screening is mandatory for every customer at onboarding.	Screening result, list version (date), reviewer name and outcome (no match / cleared after review / hit).
Screen the buyer against a recognised PEP source	Politically exposed persons attract enhanced due diligence and senior management approval.	Screening result with source name (subscription provider or freely available list) and outcome.
Ask the source-of-funds question	Source of funds is required for high-risk customers and is best practice for all real estate matters above the firm's risk threshold.	Conveyancer note recording the buyer's answer (savings, sale of another property, gift, loan, business proceeds, etc.) and any supporting document.
Assess and record the customer's risk rating	Ongoing customer due diligence cadence depends on the rating.	Low / Medium / High rating recorded on the matter file with a one-line rationale.

Branch B — Australian company buyer

Use this branch for a buyer that is an Australian proprietary or public company. Foreign companies require additional steps not covered here.

KYC steps for a company buyer
Step	Why	Document or evidence
Collect the company's full name as registered by ASIC	Exact registered name is the primary identifier for an Australian company.	Buyer-provided in writing, verified against an ASIC search.
Collect the company's ACN and (where registered) ABN	Required by the AML/CTF Rules for company customer identification.	Buyer-provided, verified against an ASIC search and ABN Lookup.
Confirm the company's status as proprietary or public	Different verification standards may apply, particularly for listed public companies.	ASIC search result.
Collect the registered office address and principal place of business	Required for company identification under the AML/CTF Rules.	ASIC search result.
Collect the full name of every director (proprietary companies)	Directors are recorded for customer identification purposes.	ASIC search result.
Identify every beneficial owner (25% threshold)	A beneficial owner is any individual who owns or controls 25% or more of the company, directly or indirectly, or who exercises control by other means.	Beneficial owner declaration signed by an authorised officer of the company, supported by ASIC search and the company's share register if available.
If no individual meets the 25% threshold, identify the senior managing official	The AML/CTF Rules require a fallback identification when no beneficial owner can be established.	Identification of the senior managing official, with rationale on file.
Verify each director and each beneficial owner as an individual (B2 flow)	Each natural person identified above must be verified as if they were an individual customer.	Apply the individual flow above to each named person.
Screen the company, each director and each beneficial owner against the DFAT list	Sanctions screening is mandatory and is applied at entity and individual levels.	Screening results recorded for each name, with list version, reviewer and outcome.
Screen each director and beneficial owner against a PEP source	PEP status is an individual attribute and must be checked for natural persons connected to the customer.	Screening results recorded per individual.
Source-of-funds enquiry directed to the company	Required for high-risk matters and recommended for all corporate purchases.	Conveyancer note recording the answer (retained earnings, capital raise, related-party loan, third-party financing) and any supporting document.
Assess and record the customer risk rating	Drives ongoing CDD cadence.	Risk rating with rationale recorded on the matter file.

Branch C — trust buyer

Use this branch for any trust buyer (discretionary, unit, hybrid, testamentary). SMSFs are usually trusts and should be run through this branch unless a specific exemption applies.

KYC steps for a trust buyer
Step	Why	Document or evidence
Collect the full name of the trust	Trust name is the primary identifier for a trust customer.	Buyer-provided, verified against the trust deed.
Confirm the type of trust	Discretionary, unit, hybrid, testamentary or other types have different identification requirements.	Trust deed extract.
Confirm the country in which the trust is established	Foreign-law trusts may attract enhanced due diligence.	Trust deed governing-law clause.
Identify the trustee(s)	Trustees control the trust and must be identified as customer-equivalent.	Apply the individual flow to a natural-person trustee; apply the company flow to a corporate trustee.
Identify the settlor (if not deceased and if not nominal)	The settlor is identified unless the settlor was a sham settlor making a nominal initial settlement.	Trust deed, plus the individual flow.
Identify the appointor (if any)	An appointor has the power to remove and appoint trustees and so exercises control.	Trust deed, plus the individual flow.
Identify each beneficiary or describe the class of beneficiaries	Beneficiary identification is required for trust customers. For a class (for example 'the children of John Smith') a description of the class is sufficient.	Named beneficiary list from the trust deed, or class description with the deed reference.
Identify every beneficial owner of the trust	Beneficial owners include any individual who controls the trust or who is entitled to 25% or more of the trust property.	Beneficial owner declaration plus individual identification for each natural person identified.
Verify the trust via a certified copy or extract of the deed	Reliable and independent verification of trust existence and terms.	Certified copy of the trust deed (or extract showing trustee, settlor, appointor and beneficiary clauses).
Sanctions and PEP screening on every named individual	Screening applies to trustees, settlors, appointors and named beneficial owners.	Screening results recorded per individual.
Source-of-funds enquiry directed to the trustee	Trust matters frequently raise source-of-funds questions because the legal buyer is not the economic buyer.	Conveyancer note plus any supporting document.
Assess and record the customer risk rating	Trust matters often warrant a higher initial rating until the source of funds is fully understood.	Risk rating with rationale recorded on the matter file.

Red flags specific to conveyancing

If any of the following appear on a matter, escalate immediately to the AML/CTF Compliance Officer for an SMR decision (see /resources/smr-decision-flowchart).

Buyer wants to settle entirely in cash, or insists on third-party funds being applied at settlement without explanation.
Beneficial owner is reluctant to be named or asks to be substituted by a nominee at the last moment.
Source of funds is described as an overseas loan or gift with no documentation and the lender cannot be identified.
Buyer is in unusual haste to settle and is willing to pay over market value.
Buyer or beneficial owner is connected to a high-risk jurisdiction (FATF call-for-action list).
Buyer asks for the title to be issued in the name of an unrelated party at the last minute.
Buyer wants to cancel the matter and have funds returned to a different account than the one they were paid from.
Buyer's documentation is inconsistent (different spellings of the name, different dates of birth between documents).
Agent acting under power of attorney refuses to identify the principal or provide the instrument.

File closure record-keeping

All KYC documents stored in the matter file under a clearly labelled 'AML/CTF' folder.
Risk rating and screening outcomes captured in the practice management system, not only on paper.
If any SMR was lodged, the matter file references the AUSTRAC reference number but does not disclose the SMR contents to the customer.
File closure note records the date of last KYC review and the next review trigger (renewal of relationship, related transaction, etc.).
All AML records retained for 7 years from end of customer relationship under AML/CTF Act s.107.