Tranche 2
Tranche 2 AML/CTF reforms: the complete guide for Australian professionals
From 1 July 2026, around 90,000 Australian businesses became reporting entities under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act). Most of them — tax agents, accountants, lawyers, conveyancers, real estate agents and trust and company service providers — have never run an AML program before. This guide explains what changed, who is captured and what your practice must have in place.
What is Tranche 2?
Australia's anti-money laundering regime was always intended to be built in stages. Tranche 1, in force since 2006, covered banks, remittance providers, bullion dealers and gambling services. Tranche 2 — delivered by the AML/CTF Amendment Act 2024 — extends the regime to the professional 'gatekeepers' who help clients create structures, move money and complete high-value transactions.
The policy driver is Australia's commitment to the Financial Action Task Force (FATF), the global standard-setter. FATF has long criticised Australia for leaving lawyers, accountants and real estate agents outside the regime, because criminals routinely use professional services to layer and integrate illicit funds.
Who is captured from 1 July 2026?
The legal test is the service, not the job title. An accountant who only prepares tax returns is generally outside the regime. The same accountant who sets up a discretionary trust, holds client money for a transaction or helps sell a business is providing a designated service — and the obligations attach to the firm, not just to that file.
- Lawyers, conveyancers and other legal professionals providing designated services
- Accountants, registered tax agents, BAS agents and bookkeepers providing designated services
- Real estate agents and buyer's agents, and property developers selling off-the-plan
- Trust and company service providers (TCSPs) — anyone forming companies or trusts, acting as a nominee, or providing registered offices
- Dealers in precious metals and stones above the cash threshold
The six core obligations
- Enrol with AUSTRAC as a reporting entity (enrolment opened 31 March 2026; the deadline for existing practices was 29 July 2026 — late enrolment is still required immediately)
- Appoint an AML/CTF compliance officer at management level and notify AUSTRAC
- Assess your money laundering, terrorism financing and proliferation financing risks and maintain a written, risk-based AML/CTF program
- Perform customer due diligence (CDD) before providing a designated service — identify and verify clients, beneficial owners and the purpose of the relationship
- Report to AUSTRAC: suspicious matter reports (SMRs), threshold transaction reports (TTRs) for cash of A$10,000 or more, and international funds transfer instructions (IFTIs) where relevant
- Keep records for seven years and train your staff on the program and their obligations
What are the penalties?
Civil penalties for serious contraventions can reach A$33 million per contravention for a body corporate and A$6.6 million for an individual. Tipping off a client that a suspicious matter report has been made (or is being considered) is a criminal offence under section 123 of the AML/CTF Act, punishable by imprisonment. AUSTRAC can also issue enforceable undertakings and publish enforcement outcomes — reputational damage most professional practices cannot afford.
Where to start this week
Cassandra AML was built for exactly this transition: designated-service decisions with recorded reasoning, customer due diligence, program controls, monitoring and reporting support in one Australian-hosted workspace. The free tier lets a practice stand up its first controls without buying a single identity check.
- Work out whether your services include any designated services — use a structured scope check rather than a guess
- Enrol with AUSTRAC through AUSTRAC Online if you are in scope, and appoint your compliance officer
- Write your risk assessment and AML/CTF program — AUSTRAC's program starter kits are the baseline small practices are measured against
- Set up your customer due diligence workflow before the next new client, including PEP and sanctions screening
- Train every staff member who touches client work, and keep the evidence
Frequently asked questions
When did Tranche 2 AML/CTF obligations start in Australia?
Obligations for newly regulated professions commenced on 1 July 2026 under the AML/CTF Amendment Act 2024. AUSTRAC enrolment opened on 31 March 2026, and practices already providing designated services on commencement were required to enrol by 29 July 2026. If you have missed that date, enrol immediately — the obligations apply regardless.
Do the rules apply to my firm if only some of my work is captured?
Yes. Once any of your services is a designated service, your firm becomes a reporting entity and needs an AML/CTF program covering the captured work. The obligations attach to the business that provides the designated service, not to individual files.
What is a designated service?
A designated service is a category of work the AML/CTF Act treats as higher risk. For professional services this includes forming companies or trusts, restructuring entities, acting as a nominee director or shareholder, holding or managing client money or property for a transaction, assisting with the sale or purchase of a business or real estate, and providing a registered office. Routine tax return preparation, BAS lodgement and general legal advice are not designated services on their own.
Can I just use the AUSTRAC program starter kit and spreadsheets?
The starter kits are a legitimate baseline and AUSTRAC expects small practices to use them. In practice, firms struggle with the parts the templates cannot do: keeping CDD evidence connected to each client, calculating reporting deadlines, screening against sanctions and PEP lists, controlling who can see suspicious-matter work, and proving seven years of decisions. Software exists to carry that operational load.
Put it into practice
Cassandra AML turns these obligations into a working system: designated-service decisions, customer due diligence, screening, monitoring and reporting records — hosted in Sydney, free to start.
This guide is general information for Australian professionals. It is not legal advice and does not replace the AML/CTF Act, the AML/CTF Rules or AUSTRAC guidance. Confirm your specific obligations with AUSTRAC or a qualified legal adviser.