When someone instructs you on another person’s behalf, the person they represent is your customer, not the person in front of you. That is how AUSTRAC’s guidance puts it, and it follows from section 28 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth). Before you start providing a designated service, you must establish on reasonable grounds the identity of your customer and, separately, the identity of anyone acting on the customer’s behalf and their authority to act. So in a power of attorney property sale, the AML checks concern both the owner selling and the attorney.
For a selling agent this comes up every week: an attorney selling a parent’s property, an executor selling a deceased estate’s home, a director signing for a company, a relative “helping” an older owner. Each needs the same two-part answer: who is the customer, and what proves this person can act for them.
TL;DR
- The customer is the person represented (the owner, estate, trust or company), not the representative, who is a “person acting on behalf of the customer”. In a brokered sale, the seller and the buyer are both your customers.
- For a person acting on behalf of the customer, section 28(2)(c) requires you to establish their identity and their authority to act, and section 28(2)(e) extends PEP and sanctions checks to them.
- Power of attorney: the owner is the customer; the attorney acts on their behalf. AUSTRAC gives “a document granting the person power of attorney” as an example of reliable evidence of authority.
- Deceased estate: AUSTRAC’s trust guidance lists a deceased estate as a kind of trust. Identify the estate and its representatives under that framework, but confirm with the conveyancer or lawyer acting on the sale who has authority to instruct you and to transfer the property, especially before a grant of probate or letters of administration.
- We recommend a simple rule: no authority, no instructions. AUSTRAC’s examples of evidence of authority include an authorisation from the customer; without any authority, do not treat a relative or friend as instructing for the owner.
- If you suspect on reasonable grounds that a person acting for the customer is not who they claim to be, section 41(1)(e) gives rise to a suspicious matter reporting obligation; section 41(1)(d) does the same for a suspicion about the customer. The report is generally due within 3 business days, with a 5-business-day case and a 24-hour case explained below.
Table of contents
- The rule: customer, and anyone acting on their behalf
- Power of attorney sales
- Deceased estates: executors and administrators
- Joint owners, companies and trusts
- When a relative or friend is “helping”
- Buyers who use an agent or representative
- Red flags when someone else is instructing
- A workflow for third-party instructions
- Our perspective
- How AML Guard helps
- FAQ
- Sources
The rule: customer, and anyone acting on their behalf
Section 28(1) of the Act says a reporting entity must not commence to provide a designated service to a customer until it has established, on reasonable grounds, each of the matters in section 28(2), unless a delay permitted under section 29 applies. They include the identity of the customer (28(2)(a)), of any person on whose behalf the customer receives the service (28(2)(b)), and of any person acting on behalf of the customer and their authority to act (28(2)(c)); for a customer that is not an individual, its beneficial owners (28(2)(d)); and whether any of them is a politically exposed person or designated for targeted financial sanctions (28(2)(e)).
AUSTRAC’s guidance on initial customer due diligence for individuals is direct: if an individual is interacting with you on behalf of another person, the person they’re representing is the customer. You do this for representatives who engage with you in relation to your designated services, collecting information about the nature of their authority, such as an agency agreement, a power of attorney or employment with appropriate authority.
On verification, AUSTRAC’s guidance says the representative’s identity and authority can be taken as established without verifying the information collected where the customer’s risk is low, enhanced due diligence does not apply, you have collected appropriate information about the representative and their authority, and you have no reasonable grounds to doubt it, among other conditions. The legal basis is simplified due diligence: section 31 of the Act and section 6-17 of the Rules. Otherwise, verify the representative’s identity as you would any person, and their authority with reliable and independent data, as appropriate to the risk.
In real estate the risk picture usually pushes towards verifying: AUSTRAC’s risk insights for the sector list “people who buy or sell for others” as a customer risk factor, because this can hide the buyer’s identity.
Power of attorney sales
Who is the customer? The owner who granted the power of attorney: the seller.
Who acts on their behalf? The attorney.
What to establish:
- The owner’s identity, as your customer, under section 28(2)(a).
- The attorney’s identity, under section 28(2)(c).
- The attorney’s authority. AUSTRAC’s guidance gives a document granting the person power of attorney as an example of reliable and independent data establishing authority to act. Read the document: who granted it, who it appoints, and whether its terms extend to selling this property. The conveyancer or lawyer acting on the sale can confirm whether the instrument can be used for the transfer.
- PEP and sanctions checks on both the owner and the attorney (section 28(2)(e)).
- The nature and purpose of the transaction. AUSTRAC suggests collecting the reason for granting the authority to act, as a baseline for spotting unusual behaviour later.
Keep the instrument’s details on file with what you checked. AUSTRAC says you need not keep copies of identification documents and can record their details instead.
Deceased estates: executors and administrators
AUSTRAC’s guidance on initial customer due diligence for trusts lists “a deceased estate” among the kinds of trust, gives “The Estate of Jane Citizen” as an example of a trust’s name, and lists “a will, or letter of administration” among the evidence that a trust exists. On that approach:
- The estate is treated as the customer. The deceased owner is no longer the seller.
- The executor or administrator acts on the estate’s behalf. AUSTRAC’s trust guidance says persons acting on behalf of a trust include any trustee; you establish their identity and authority to act.
- The beneficiaries are the persons on whose behalf the estate receives the service. For a trust customer, the Rules require you to collect at least information about the identity of each beneficiary or, where the nature of the trust means that is not possible, a description of each class of beneficiary (Rules section 6-3(3)), and about the identity of the trustees (section 6-3(4)).
- Beneficial owners. AUSTRAC’s guidance says a trust’s beneficial owners can include individual trustees and anyone else with control over the trust.
- PEP and sanctions checks cover the trust, its trustees and representatives, the identifiable beneficiaries, and any individual with control over the trust (section 28(2)(e) and AUSTRAC’s trust guidance). Where the nature of the trust means each beneficiary cannot be identified, and you have established a description of each class on reasonable grounds, Rules section 6-6(3) treats their PEP and sanctions status as established.
AUSTRAC’s framework tells you how to do customer due diligence on an estate. It does not tell you who holds the title, or who can sign a sales agreement and transfer the property at a given stage of the administration. Those questions turn on the documents and on State or Territory law: confirm them with the conveyancer or lawyer acting on the sale.
Before probate or letters of administration
Evidence that the estate exists does not show that the person in front of you can sell and transfer this property. If no grant of probate or letters of administration has been made yet, do not rely on the will alone: get the conveyancer’s or lawyer’s confirmation of who can sign the sales agreement and the transfer. For every estate sale, record:
- whether probate or letters of administration have been granted, and the date;
- every person appointed as executor or administrator, not only the one who deals with you;
- the authority to sell and transfer, as confirmed by the conveyancer or lawyer acting on the sale; and
- the documents you checked against the person you identified.
Where there are several executors, AUSTRAC’s trust guidance points to establishing the identity of all individual trustees, not only the one who deals with you (Rules section 6-3(4)).
One exclusion you may hear about does not apply to agents. AUSTRAC’s professional services guidance says the court-order exclusion in items 1 and 2 of table 6 (lawyers and conveyancers) can exclude a transfer from a deceased estate following a court-ordered grant of probate. Table 5, which covers agents brokering sales, has no equivalent.
AUSTRAC’s trust guidance also sets out simplified verification: where the trust’s risk is low and the other conditions are met, the identity of a trustee acting for it, its beneficiaries and its beneficial owners can be taken as established without verification. You still collect the information.
Joint owners, companies and trusts
- Joint owners. Each registered owner selling is a seller; confirm who the registered owners are from the title or with the conveyancer. Where one co-owner deals with you for both, that co-owner is also acting on behalf of the other, so the authority question applies. AUSTRAC’s starter kit has a buy-side example: for a representative of a married couple, the agent verifies the representative, both buyers and the representative’s authority to act.
- Companies. The company is the customer, the director or officer instructing you acts on its behalf, and you also establish the company’s beneficial owners. For a customer that is not an individual, Rules section 6-19 lets the representative’s identity and authority be taken as established where their authority is established on reasonable grounds, the additional risk is low and its other conditions are met. See our guide to company beneficial ownership.
- Family trusts. The trust is the customer and the trustee acts on its behalf; evidence of a trustee’s authority typically includes the trust deed and instrument of appointment. See our guides to trust KYC and beneficial ownership for trusts and SMSFs.
When a relative or friend is “helping”
Many sales involve an adult child, friend or carer who does the talking for an older owner. The owner is still the customer, and anyone acting for them needs authority.
- If the helper has a power of attorney, treat the sale as a power of attorney sale.
- If the helper has no authority from the owner (a power of attorney or the owner’s written authorisation), we recommend taking instructions only from the owner.
- If the owner seems unable to give instructions, or the helper seems to be directing the owner, pause and escalate to your AML/CTF compliance officer before you act.
Support is fine. Instructions without authority are not.
Buyers who use an agent or representative
The same rule applies on the buy side: when a buyer’s agent, relative or other representative deals with you for the buyer, the buyer is the customer. A person who buys in their own name is the buyer and your customer, even if they say they are buying for someone else; treat that arrangement as a risk question. In AUSTRAC’s starter kit example, a selling agent treated a representative that was an unenrolled buyer’s agent as a medium risk factor.
Watch the names on the contract. AUSTRAC’s red flags include buying in the name of a third party, relative or minor with no legal or economic reason, and a different name on the contract from the person you have been dealing with.
Red flags when someone else is instructing
From AUSTRAC’s real estate risk insights, escalate these when a representative is involved:
- the customer appears to be following instructions of third parties;
- the customer avoids face-to-face meetings, or gives limited contact options;
- documents are in an unexpected format or seem forged or altered;
- sale proceeds are directed to an unrelated third party;
- a sudden change of ownership is requested without a legitimate reason, especially close to settlement.
These are indicators to escalate, not proof of a crime. If you suspect on reasonable grounds that an agent of your customer who deals with you is not who they claim to be, section 41(1)(e) of the Act gives rise to a suspicious matter reporting obligation. The report is generally due within 3 business days after the day you form the suspicion. It is due within 5 business days if you reasonably believe some, but not all, of the information may be protected by another person’s legal professional privilege, and within 24 hours if the suspicion relates to terrorism financing (section 41(2)). Escalate straight away so your compliance officer can work out which applies; AUSTRAC’s privilege guidance covers the 5-day case.
Do not disclose the report, or that one is required, in a way that would or could reasonably be expected to prejudice an investigation: section 123 makes that an offence. Ask your compliance officer or legal adviser before you say anything to the customer or the representative about the matter.
A workflow for third-party instructions
- Ask at intake whether anyone is acting for the customer. AUSTRAC suggests onboarding forms ask this directly.
- Name the customer correctly on the file: the owner, the estate, the company or the trust.
- Identify the customer and the person acting, and record the document that gives that person authority.
- Verify authority with reliable and independent data unless your policies, applying AUSTRAC’s low-risk conditions, allow you to rely on the information collected.
- Screen the customer and the person acting for politically exposed persons and sanctions.
- Record the reasoning. Section 111 of the Act requires records of the data you collected and of your analysis and decisions, kept until the end of the seven-year period that begins when the business relationship ends or the occasional transaction is completed.
- Re-check at change points, such as a new person instructing or a change to the account for sale proceeds.
Our perspective
The weak point in a third-party sale is rarely the identity document; it is assuming the person who rang the office has the right to instruct. A question at intake (“are you acting for someone else?”) and the authority on file go a long way.
Estates deserve their own path in an agency’s policies: they are common, they involve grieving families, and the authority questions sit partly outside the AML/CTF framework.
How AML Guard helps
AML Guard is built for Australian Tranche 2 reporting entities. It records identity checks, screening and risk ratings for the customer and the people acting for them, with an officer reviewing and approving the outcome. For a company, the beneficial ownership determination starts from its ACN, and an officer approves each determination. Your officer remains responsible for reviewing trust deeds, wills, grants and other authority documents.
AML Guard is not self-service: firms start with a demo.
FAQ
Who is the customer when someone sells under a power of attorney?
The owner who granted the power of attorney. The attorney is a person acting on the customer’s behalf, so you establish the attorney’s identity and authority to act under section 28(2)(c) of the Act, as well as the owner’s identity.
Who is the customer when an executor sells a deceased estate’s property?
AUSTRAC’s trust guidance lists a deceased estate as a kind of trust, so on that approach the estate is your customer and the executor or administrator acts on its behalf. Who can actually sell and transfer the property, especially before a grant of probate or letters of administration, is a question for the conveyancer or lawyer acting on the sale.
What documents prove someone’s authority to act?
AUSTRAC’s examples of reliable and independent data include a power of attorney document, written confirmation from an employer, and a letter, agency agreement or other authorisation from the customer or a reliable third party such as a lawyer or accountant who is not the person acting. For a trustee it typically includes the trust deed and instrument of appointment.
Do I have to verify the attorney’s identity, or just record it?
You must establish the attorney’s identity and authority under section 28(2)(c). Where the customer’s risk is low and AUSTRAC’s other conditions are met, simplified due diligence (section 31 and Rules section 6-17) lets you rely on the information collected. That is not a blanket exemption, and in property sales verifying the authority independently is usually prudent.
Can a family member instruct me to sell a parent’s home?
Only with authority from the owner, such as a power of attorney or the owner’s written authorisation. Without it, take instructions from the owner. If the owner seems unable to instruct, or someone else appears to be directing them, escalate to your AML/CTF compliance officer before acting.
Do PEP and sanctions checks apply to the attorney or executor?
Yes. Section 28(2)(e) requires you to establish whether any person acting on behalf of the customer is a politically exposed person or designated for targeted financial sanctions, as well as the customer, beneficial owners and anyone on whose behalf the customer receives the service. For an estate, that includes the executor or administrator.
Sources
- Anti-Money Laundering and Counter-Terrorism Financing Act 2006, sections 6 (table 5), 28, 31, 41, 111 and 123 | Federal Register of Legislation
- Anti-Money Laundering and Counter-Terrorism Financing Rules 2025, sections 6-3, 6-6, 6-17 and 6-19 | Federal Register of Legislation
- Initial CDD for individuals | AUSTRAC
- Initial CDD for trust | AUSTRAC
- Real estate program starter kit: examples of dealing with customers | AUSTRAC
- Professional designated services | AUSTRAC
- Risk insights and indicators of suspicious activity for the real estate sector | AUSTRAC
- Identifying individuals who don’t have standard ID | AUSTRAC
- Legal professional privilege | AUSTRAC
Related on AML Guard: Stopping vendor identity fraud · Real estate CDD checklist · Trust KYC · PEP screening · Suspicious matter reporting
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