AML Tranche 2 Australia: What businesses need to know

The Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024 introduces significant new obligations for Australian businesses. Here's an overview of what Tranche 2 means for affected sectors.

What is AML/CTF Tranche 2?

AML/CTF Tranche 2 represents the most significant expansion of Australia's anti-money laundering and counter-terrorism financing regime since its inception in 2006. The legislation extends regulatory obligations to professional service providers who were previously exempt, including lawyers, accountants, real estate agents and precious metals dealers.

This reform aligns Australia with international standards set by the Financial Action Task Force (FATF) and addresses a gap in the financial crime prevention framework. The expansion recognises that professional services can be exploited by criminals to legitimise illicit funds or obscure beneficial ownership.

Who may be affected?

The new obligations may apply to businesses providing designated services in the following sectors (depending on the specific services offered):

• Legal practitioners - particularly those handling conveyancing, property settlements and trust account services
• Accounting firms - providing tax agent services, business sale facilitation and financial advisory
• Real estate agents - when facilitating property transactions
• Conveyancing practitioners - professionals providing conveyancing services (licensing arrangements vary by state)
• Trust and company service providers (TCSPs) - establishing or managing corporate structures
• Precious metals dealers - buying, selling or dealing in gold, silver, platinum or other precious metals

Key dates

Overview of typical obligations

Businesses providing designated services generally need to address the following areas. Specific requirements may vary depending on your designated services:

1. AUSTRAC enrolment

Reporting entities typically enrol with AUSTRAC before commencing designated services. The enrolment portal opens on 31 March 2026.

2. AML/CTF program

Reporting entities generally develop and maintain a written AML/CTF program that identifies, mitigates and manages money laundering, terrorism financing and proliferation financing risks.

3. Customer due diligence (CDD)

Reporting entities typically verify the identity of customers before providing designated services.

4. Beneficial ownership

A component of Tranche 2 involves identifying and verifying beneficial owners of entities.

5. Reporting obligations

Reporting entities may need to submit various reports to AUSTRAC, including Suspicious Matter Reports (SMRs) and Threshold Transaction Reports (TTRs).

What businesses typically document

Businesses affected by Tranche 2 commonly document the following areas. This is general information about what many businesses include - your specific requirements depend on your designated services:

By sector examples

Documentation requirements may vary by sector. Here are examples of what different sectors typically address (depending on their designated services):

Penalties overview

The AML/CTF Act provides for significant penalties for breaches, including:

• Civil penalties up to $27 million for corporations
• Criminal penalties including imprisonment for serious breaches
• Administrative penalties and enforceable undertakings

Preparation considerations

Many businesses consider the following when preparing for Tranche 2:

1. Understanding which services may be designated services
2. Conducting a preliminary risk assessment
3. Reviewing current client identification processes
4. Budgeting for compliance costs including training and legal advice
5. Considering who might serve as compliance officer
6. Exploring documentation options

Useful tools

Read our complete Tranche 2 Guide

Key dates, affected sectors, obligations and how to prepare