Australia’s AML/CTF Tranche 2: What Accountants, Lawyers and Real Estate Agents Must Do Before the July 2026 Deadline

Australia’s AML/CTF Tranche 2 reforms took effect on July 1, 2026, extending anti-money laundering and counter-terrorism financing obligations to lawyers, accountants, real estate agents, conveyancers, and dealers in precious metals and stones for the first time. AUSTRAC’s regulated population is growing from roughly 19,000 entities to close to 100,000, and newly covered firms — the “gatekeeper professions” — must enrol by July 29, 2026, a deadline that falls just days from now.

What Is Australia’s AML/CTF Tranche 2 Reform?

Tranche 2 is the extension of Australia’s Anti-Money Laundering and Counter-Terrorism Financing Act to designated non-financial businesses and professions (DNFBPs) — lawyers, accountants, real estate agents, conveyancers, and dealers in precious metals and stones — that previously sat outside AUSTRAC’s regulatory perimeter despite handling transactions long recognized as high-risk for money laundering.

The reform brings Australia in line with Financial Action Task Force (FATF) standards that most G20 economies, including the UK, Canada, and much of the EU, adopted years earlier. Australia was one of the last FATF members to regulate these “gatekeeper” professions, and the gap had drawn repeated international criticism.

Who Is Newly Regulated Under Tranche 2?

Tranche 2 newly regulates real estate agents, lawyers and conveyancers handling property or business transactions, accountants providing specified services (company formation, trust administration, managing client funds), and dealers in precious metals and stones above transaction thresholds — collectively termed designated non-financial businesses and professions.

• Real estate agents: Involved in the buying and selling of real property on behalf of clients.
• Lawyers and conveyancers: Providing services related to property transactions, business sales, or trust and company structuring.
• Accountants: Offering company formation, trust administration, or managing client money/assets.
• Trust and company service providers: Forming, managing, or acting as a registered agent for companies and trusts.
• Precious metals and stones dealers: Above defined cash-transaction thresholds.

AUSTRAC’s regulated population is expanding from approximately 19,000 entities to nearly 100,000 as a direct result — a five-fold increase in the number of Australian businesses now carrying AML/CTF obligations.

What Are the Key Compliance Deadlines?

The core compliance obligation took effect July 1, 2026, and newly regulated entities must enrol with AUSTRAC by July 29, 2026. AUSTRAC enrolment itself opened March 31, 2026, giving firms a narrow multi-month window to register before the deadline arrives.

What Obligations Do Newly Regulated Firms Have to Meet?

Newly regulated firms must enrol with AUSTRAC, appoint a designated compliance officer, conduct customer due diligence (KYC/KYB), screen clients against sanctions and watchlists, monitor transactions for suspicious activity, file suspicious matter reports, and retain records for seven years.

1. Enrol the business with AUSTRAC and confirm designated-service status.
2. Appoint an AML/CTF compliance officer with defined authority and reporting line.
3. Build or adopt a written AML/CTF program covering risk assessment and customer due diligence procedures.
4. Implement customer identification and verification (KYC) at onboarding, and enhanced due diligence (EDD) for higher-risk clients.
5. Screen clients and counterparties against sanctions and watchlists before and during the relationship.
6. Establish a process to identify and file suspicious matter reports (SMRs) with AUSTRAC.
7. Retain identification, transaction, and reporting records for seven years.

How Does This Compare to AML Regimes in Other Countries?

Australia’s Tranche 2 brings its DNFBP coverage broadly in line with the UK, Canada, and EU member states, which have regulated lawyers, accountants, and real estate agents under AML frameworks for over a decade. Australia had been a notable outlier among FATF members, and this reform closes that gap rather than creating a stricter regime than international peers.

For accounting and law firms that already operate cross-border — advising UK, EU, or Canadian clients alongside Australian ones — the practical workflows (KYC onboarding, sanctions screening, suspicious activity reporting) will be familiar. The main adjustment for Australia-only practices is building these processes from scratch rather than adapting an existing framework.

What Happens If a Firm Fails to Comply?

Firms that fail to comply face civil penalties of up to AU$6.6 million for individuals and AU$33 million for a body corporate, along with potential enforcement action from AUSTRAC ranging from remedial directions to referral for prosecution in serious cases involving willful non-compliance or facilitation of money laundering.

Beyond direct penalties, non-compliant firms risk reputational damage and loss of professional standing, since regulators in adjacent sectors — banking, insurance — increasingly treat AML/CTF compliance status as a factor in counterparty risk assessment.

What Should Real Estate Agencies Do Differently Under Tranche 2?

Real estate agencies must build customer due diligence into the transaction workflow itself, verifying the identity of both buyers and sellers, screening parties against sanctions lists, and flagging cash-heavy or unusually structured deals before settlement rather than treating compliance as a post-transaction paperwork exercise.

This is a meaningful operational shift for an industry that has historically treated identity verification as a matter for conveyancers and banks. Agencies now share direct responsibility, which means front-line sales staff need training to recognize red flags — rapid on-sales, third-party payment sources, or reluctance to provide standard identification — at the point of engagement, not after the fact.

How Should Small and Mid-Sized Firms Approach Implementation on a Tight Budget?

Small and mid-sized firms should prioritize a written risk-based AML/CTF program scaled to their actual client base rather than adopting an enterprise-grade compliance stack, since AUSTRAC’s requirements are proportionate to the size and risk profile of the regulated business.

• Start with a risk assessment: Map which services and client types actually fall under designated-service definitions before building processes for services the firm doesn’t provide.
• Use existing identity-verification tools: Many practice-management and conveyancing platforms now offer built-in KYC modules rather than requiring a standalone system.
• Share compliance officer duties where appropriate: Small partnerships can appoint an existing senior partner as compliance officer rather than hiring a dedicated role, provided the appointment is documented and the person has real authority.
• Join a professional-body compliance program: Law societies and accounting bodies in Australia have released Tranche 2 templates and training that reduce the cost of building a program from scratch.

Frequently Asked Questions

Do all accountants and lawyers in Australia need to enrol with AUSTRAC?

No. Only those providing “designated services” — such as company formation, trust administration, managing client money, or property transaction advice — are captured under Tranche 2; general advisory or litigation work outside these categories does not automatically trigger obligations.

What is a suspicious matter report (SMR)?

A suspicious matter report is a formal filing to AUSTRAC when a regulated business identifies a transaction or client behavior that reasonably suggests money laundering, terrorism financing, or other criminal activity, and must be submitted regardless of whether the transaction proceeds.

How long must AML/CTF records be kept under the new rules?

Newly regulated entities must retain customer identification, transaction, and reporting records for seven years, matching the retention period already required of Australia’s existing regulated financial institutions.

Is Australia’s Tranche 2 stricter than UK or EU AML rules for the same professions?

No, Tranche 2 broadly mirrors obligations already in place in the UK, Canada, and EU for lawyers, accountants, and real estate agents; it brings Australia’s regulatory coverage up to FATF standard rather than exceeding international norms.

Can a firm outsource its AML/CTF compliance obligations to a third party?

A firm can outsource operational tasks like identity verification or transaction monitoring to a specialist provider, but ultimate legal responsibility for AML/CTF compliance remains with the regulated entity and its appointed compliance officer, not the outsourced vendor.

What should a firm do if it realizes it missed the July 29, 2026 enrolment deadline?

A firm that has missed the deadline should enrol with AUSTRAC immediately and begin implementing its AML/CTF program without delay, since prompt voluntary remediation is generally viewed more favorably by regulators than continued non-compliance discovered later through audit or investigation.

Son Güncelleme / Last Updated: July 28, 2026

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