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 may be captured when their own active steps directly advance creation of an express trust, a specified transaction involving client property, or the sale or transfer of a body corporate or legal arrangement. An asset-only business sale is not automatically item 2, and every service must be tested against the designated-services table.
- 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, stones and products at the physical-currency or virtual-asset threshold (with bullion dealing separately regulated)
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), ordinarily before providing a designated service, while applying any permitted delayed, transitional or deemed-compliance rules — 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?
Under section 175 of the AML/CTF Act, the maximum civil penalty is 100,000 penalty units for a body corporate and 20,000 penalty units for another person — currently A$36.4 million and A$7.28 million respectively from 1 July 2026. Section 123 makes it a criminal offence to disclose protected SMR-related information where the disclosure would or could reasonably be expected to prejudice an investigation. 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 starter kits are an optional starting point for eligible small practices and must be checked against the suitability criteria and customised
- 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
Official sources
Use these primary AUSTRAC pages to confirm the current rules and apply them to your circumstances.
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 specified by the AML/CTF Act. For professional services this can include active steps that directly advance company or trust formation, legal-form restructuring, specified nominee arrangements, receiving and controlling or managing client property for a transaction, the sale or transfer of a body corporate or legal arrangement, a real-estate transaction, or a registered-office service. An asset-only business sale is not automatically item 2. 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?
AUSTRAC's starter kits are an optional practical starting point for eligible small practices. Confirm every stated suitability criterion and customise the program; a practice outside those criteria cannot rely on the kit alone. Firms must still connect CDD evidence to each client, calculate reporting deadlines, document screening, control access to suspicious-matter work and retain evidence for the applicable periods.
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. See our editorial and correction standards.