--- title: "Third-Party KYC Reliance | HeadStart Docs" description: "Section 37A lets you rely on another firm's KYC under strict conditions. Learn the requirements, written agreements needed, and liability rules." lang: en-AU json-ld: | [ { "@context": "https://schema.org", "@type": "Organization", "name": "HeadStart Docs", "legalName": "HeadStart Docs Pty Ltd", "url": "https://www.headstartdocs.com.au", "logo": { "@type": "ImageObject", "url": "https://www.headstartdocs.com.au/logo-512.png?v=4", "width": 512, "height": 512 }, "description": "AML/CTF compliance digital products and programs for Australian businesses under Tranche 2 regulations. Free program documents and AML Portal. 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HeadStart Docs products are digital publications that give you a substantial head start, but they must be reviewed and tailored by a qualified solicitor to your specific business circumstances before implementation." } }, { "@type": "Question", "name": "How is HeadStart Docs different from the free AUSTRAC Starter Kits?", "acceptedAnswer": { "@type": "Answer", "text": "AUSTRAC Starter Kits are generic starting points that require significant customisation. HeadStart products are sector-specific, pre-populated with industry-relevant risk factors and scenarios, and include 12 months of AML Portal access for ongoing compliance including screening, record keeping and reporting tools." } }, { "@type": "Question", "name": "What if the AML/CTF rules change after I purchase?", "acceptedAnswer": { "@type": "Answer", "text": "Your digital products are yours to keep. If significant regulatory changes occur, updated versions will be available to active portal subscribers. The AML Portal itself is continuously updated to reflect current AUSTRAC requirements and sanctions lists." } }, { "@type": "Question", "name": "What happens after my 12-month AML portal access expires?", "acceptedAnswer": { "@type": "Answer", "text": "Your documentation is yours forever. To continue using the AML Portal (screening tools, compliance calendar, record keeping), you pay $35 per customer CDD. Cancel anytime — no subscription required." } }, { "@type": "Question", "name": "Is HeadStart Docs a law firm?", "acceptedAnswer": { "@type": "Answer", "text": "No. HeadStart Docs is a digital publisher and platform provider. We sell digital compliance products and portal access. We do not provide legal advice. Referrals for legal advice can be made to our related law firm, HeadStart Counsel." } }, { "@type": "Question", "name": "When does AML/CTF Tranche 2 commence in Australia?", "acceptedAnswer": { "@type": "Answer", "text": "Tranche 2 AML/CTF obligations commence on 1 July 2026. All reporting entities in designated sectors including lawyers, accountants, real estate agents, conveyancers, and trust and company service providers must have their AML/CTF programs in place by this date." } } ] }, { "@context": "https://schema.org", "@type": "BreadcrumbList", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://www.headstartdocs.com.au/" }, { "@type": "ListItem", "position": 2, "name": "Free Resources", "item": "https://www.headstartdocs.com.au/tranche-2-resources" }, { "@type": "ListItem", "position": 3, "name": "Third-Party Reliance", "item": "https://www.headstartdocs.com.au/tranche-2-resources/third-party-reliance-kyc" } ] }, { "@context": "https://schema.org", "@type": "Article", "headline": "Third-Party Reliance: Using Another Firm's KYC", "description": "Section 37A allows you to rely on another reporting entity's customer identification. But there are strict conditions. Learn when you can rely on third-party KYC and what agreements are required.", "datePublished": "2025-12-20", "dateModified": "2025-12-20", "url": "https://www.headstartdocs.com.au/tranche-2-resources/third-party-reliance-kyc", "image": "https://www.headstartdocs.com.au/logo-512.png", "inLanguage": "en-AU", "isPartOf": { "@type": "WebSite", "name": "HeadStart Docs", "url": "https://www.headstartdocs.com.au" }, "about": { "@type": "Thing", "name": "AML/CTF Compliance", "description": "Anti-Money Laundering and Counter-Terrorism Financing compliance for Australian businesses under Tranche 2" }, "author": { "@type": "Organization", "name": "HeadStart Docs" }, "publisher": { "@type": "Organization", "name": "HeadStart Docs", "logo": { "@type": "ImageObject", "url": "https://www.headstartdocs.com.au/logo-512.png" } } } ] --- [Get Started ](/checkout) We use cookies to enhance your experience and analyse traffic. [Privacy Policy](/privacy) Essential OnlyAccept All [Skip to main content](#main-content) [ ![HeadStart Docs](/assets/logo-dark-bg-CUivuKJ8.png)![HeadStart Docs](/assets/logo-light-bg-D5BRMGqf.png) ](/) [Home ](/) Features [Programs ](/programs) Resources Sectors [Log in ](/auth) [Portal](/aml-landing) ![Third-party reliance for KYC](/assets/law-practice-office-team-DxjvVhw2.jpg) [Back to Free Resources](/tranche-2-resources) 20 December 2025 • Third-Party Reliance # Third-Party Reliance: Using Another Firm's KYC Can you rely on customer identification performed by another firm? Yes, but only under strict conditions set out in Section 37A. Get it wrong and you are responsible for the failure. ## What is third-party reliance? Third-party reliance allows you to accept customer identification (KYC) performed by another reporting entity, rather than conducting it yourself. This includes [beneficial owner identification](/tranche-2-resources/beneficial-owner-identification) and other CDD measures. This can be useful when: - A client is referred from another professional - Multiple professionals are working on the same transaction - You are part of a professional network or group ## Conditions for reliance (Section 37A) ### All conditions must be met 1. **The third party is a reporting entity:** They must be enrolled with AUSTRAC and subject to AML/CTF obligations 2. **Written arrangement in place:** You must have a formal arrangement that permits the reliance 3. **CDD was conducted to the required standard:** The third party must have applied appropriate CDD measures 4. **Records available on request:** You must be able to obtain copies of the CDD records promptly - see [record keeping requirements](/tranche-2-resources/record-keeping-requirements) 5. **You remain responsible:** Ultimate responsibility stays with you - reliance does not transfer liability ## Who can you rely on? #### Acceptable third parties - Other law firms (reporting entities) - Accounting firms (reporting entities) - Real estate agencies (reporting entities) - Banks and financial institutions - Other Tranche 2 reporting entities #### Cannot rely on - Non-reporting entities - The client themselves - Unregulated third parties - Entities in high-risk jurisdictions (special conditions) ## The written arrangement Your reliance arrangement should address: - Scope of reliance (which CDD elements) - Confirmation the third party is a reporting entity - Timeframe for providing records on request - Confirmation of CDD standards applied - Notification requirements if issues arise ### You remain responsible Critical point: reliance does not transfer responsibility. If the third party's CDD was inadequate, you are still liable for failing to properly identify your client. Reliance is a convenience, not an escape from obligation. ## Practical example ### Scenario: Lawyer-to-lawyer referral A client is referred to you by another law firm for a property matter. The referring firm has already completed full KYC on the client for a previous matter. **To rely on their KYC, you must:** - Confirm the referring firm is enrolled with AUSTRAC - Have a written reliance agreement in place - Obtain confirmation of what CDD was performed - Request copies of the CDD records - Assess whether additional CDD is needed for your matter Remember: You must still conduct your own risk assessment and may need to supplement the third party's CDD. ### Key Takeaway Third-party reliance under Section 37A allows you to use another reporting entity's KYC, but only with a written arrangement and where all conditions are met. You remain responsible for compliance - reliance is not a safe harbour. [View AML/CTF Digital Products](/programs) [ Read our complete Tranche 2 Guide Key dates, affected sectors, obligations and how to prepare ](/tranche-2) **Disclaimer:** This article is general information only. It is not legal, financial or compliance advice. HeadStart Docs™ provides free compliance documents, not legal services. We do not guarantee the accuracy of information provided. Obligations may apply depending on your designated services. Always confirm your specific requirements with a qualified adviser. Need a lawyer to review your AML/CTF program? [HeadStart Counsel](https://headstartcounsel.com.au/get-started) offers fixed-fee tailoring from $1,800+GST. Separate entity and engagement. ### Related Articles [ CDD Beneficial Owner Identification ](/tranche-2-resources/beneficial-owner-identification)[ CDD Ongoing Customer Due Diligence ](/tranche-2-resources/ongoing-customer-due-diligence)[ Compliance Record Keeping Requirements ](/tranche-2-resources/record-keeping-requirements)[ Compliance Grandfathering Old Clients ](/tranche-2-resources/grandfathering-old-clients) ### Free Compliance Tools [Implementation Timeline Key dates and milestones for Tranche 2 compliance ](/timeline)[Readiness Test Assess your compliance readiness in 2 minutes ](/risk-calculator)[Sanctions Screening Search Australian sanctions lists and country risk ](/sanctions-search) ### Ready to get compliant? Sector-specific compliance documents to help you build your AML/CTF program. 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