CDD reliance on another reporting entity
Third party CDD reliance does not move the customer off the law firm’s book. Where reliance is allowed, you still own the risk, the record, and the decision to proceed.
Quick answer
Reliance is only a path where the Act, the Rules, and your program allow it, with the other party able to be relied on. A cousin with a scanner is not a reporting entity. An accountant’s email is not an arrangement. You do not outsource the suspicious-matter decision; if your program still requires a check, the firm emails a link and the client pays.
People search “third party CDD reliance” when a law firm has been asked to rely on the accountant’s customer due diligence and close its own file. Checked against AUSTRAC’s glossary entry for a reporting entity on 4 October 2026. This is general information, not legal advice. This page does not reproduce that guidance. Forming a group of related businesses is different, on reporting groups for related entities. The lawyer’s own obligations are on AML checks for lawyers. The sector map is /tranche-2.
What stays with the firm
A reporting entity is the business that provides the designated service. If that is your firm, another firm’s work does not rename you. Third party CDD reliance, in the cases the law and your program allow, lets you use their customer due diligence. It does not let you stop having a program, a risk view, or a record of what you relied on.
The other party has to be someone reliance can actually run against, not a helpful relative or an overseas office with no arrangement. You keep enough to show who you relied on, for which customer, and under which arrangement. The decision that something is suspicious stays with you. This page does not set out the statutory test and does not draft the arrangement.
- Confirm they are a reporting entity. A letterhead is not enrolment. If they are out of the regime, you are not relying. You are hoping.
- Point to the arrangement. The program names it. A single email does not.
- Rate the customer yourself. Their low rating is a fact you may read. It is not your rating.
- Keep the report decision. You do not ask them to decide your suspicious matter, and you do not describe that decision to the client.
Who the other party actually is
Before anyone writes “relied on accountant” in the matter, sort the other party into one row. The row decides whether you still send your own link.
Sorting third party CDD reliance for a law firm. This table does not reproduce AUSTRAC’s reporting-entity glossary or the reliance rules.
| Other party | Reliance | What remains yours |
|---|---|---|
| A reporting entity, arrangement in place | Only if the program and the rules allow it on this file | Risk, records, and whether you proceed |
| An accountant with no arrangement | Not reliance | Your own customer due diligence |
| A relative or a clerk with copies | Not a reporting entity path | Your own check, from the start |
| Another firm, and a suspicious matter arises | Their CDD does not decide it | Your officer’s decision, kept off the client conversation |
Where the reliance page stops
This page is what remains yours if you rely on another reporting entity. It is not how to form a reporting group and it is not the whole lawyer guide. Those are reporting groups for related entities and AML checks for lawyers. FreeAML does not rely on the other firm and does not store their program as yours.
The firm suite is A$0. A check you still run is client-pays.
What the client pays
On FreeAML the firm suite is A$0. The firm emails the client a link. Verification is client-pays. On the public list a personal KYC check is A$20 and a company or trust KYB check is A$40. Use KYB when the customer is a company or a trust. The firm suite does not perform another firm’s customer due diligence, and their file is not included as your check. Confirm the live amounts on FreeAML pricing. FreeAML does not rely on another firm for you or decide that reliance is available.
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Risk Assessment Generator →
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Free AML Training →
Online courses for staff. CPD-certified certificates included.
Frequently Asked Questions
Reliance does not close your program.
The firm suite is A$0. The client pays any check your program still requires. Another firm’s PDF is not that payment.
Open the Tranche 2 guideQuestions: team@freeaml.com.au