Australia's AML/CTF Tranche 2 Reforms: The Complete Guide for Accountants, Lawyers & Real Estate Agents
Australia's Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024 extends AUSTRAC obligations to lawyers, accountants, real estate agents and more from 1 July 2026. Here's everything you need to know.
What is the AML/CTF Tranche 2 Reform?
Australia's Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024 significantly expands the country's AML/CTF framework. Until now, Australia's AML/CTF Act 2006 applied primarily to financial institutions, casinos, and bullion dealers — the so-called "Tranche 1" designated services. Tranche 2 extends mandatory AUSTRAC obligations to a broad range of professional services sectors, bringing Australia in line with FATF standards and ending years of non-compliance with international benchmarks. Australia was one of only two FATF member countries that had not applied AML/CTF obligations to lawyers and accountants. That changes from 1 July 2026.
Who is affected by Tranche 2?
The following professionals must enrol with AUSTRAC and comply with the AML/CTF Act from 1 July 2026: **Legal professionals**: Solicitors, barristers, law firms, notaries (for designated services). **Accounting professionals**: Registered tax agents, BAS agents, external auditors, insolvency practitioners, public accounting firms. **Real estate professionals**: Real estate agents and agencies, buyers agents, conveyancers, property developers, property auctioneers. **Other**: Trust and company service providers; dealers in precious metals and gems. The obligation is triggered by specific "designated services" — not every activity these professionals perform.
Key obligations from 1 July 2026
1. Enrol with AUSTRAC before providing designated services. 2. Appoint a nominated AML/CTF Compliance Officer. 3. Develop a written AML/CTF Program (Part A risk framework + Part B CDD procedures). 4. Conduct Customer Due Diligence (CDD) for every client. 5. Screen clients against PEP and sanctions lists. 6. File Suspicious Matter Reports (SMRs) within 24 hours (terrorism) or 3 business days (other). 7. Maintain records for 7 years from end of relationship. 8. Train staff on AML/CTF obligations with documented proof. 9. Conduct an independent program review every 3 years. 10. Observe the tipping-off prohibition — never disclose an SMR to the subject.
Penalties for non-compliance
| Breach | Penalty | |--------|---------| | Failure to enrol | Up to A$19,000/day | | Failure to maintain AML/CTF program | Up to A$6.3M (individual), A$31.3M (company) | | Failure to conduct CDD | Civil penalties up to A$6.3M | | Failure to file SMR | Civil and criminal penalties | | Tipping off | Criminal — up to 2 years imprisonment | Beyond fines, AUSTRAC lists all enforcement actions publicly, creating significant reputational risk.
What is a designated service for professionals?
**Accountants**: Preparing tax affairs while managing client funds; acting as trustee/director/partner; forming or managing companies or trusts; providing a registered business address. **Lawyers**: Buying or selling real estate on behalf of a client; managing client money or securities; organising contributions for company formation; creating or operating trusts or companies. **Real estate agents**: Acting as agent in purchase or sale of real property; acting as agent in leasing where rent exceeds AUSTRAC thresholds. Obtain legal advice if you are uncertain whether your specific services are designated.
How Complylty helps
Complylty is purpose-built for professional services firms facing AUSTRAC obligations: - **CDD Wizard** — Step-by-step verification for identity, beneficial ownership and source of funds. - **SMR Workflow** — Guided process with tipping-off prevention warnings. - **7-Year Retention Lock** — Automatic enforcement with expiry alerts. - **AML/CTF Program Generator** — Draft your mandatory written program. - **PEP & Sanctions Screening** — Australian and international lists. - **Audit-Ready Files** — Timestamped client records for every AUSTRAC inspection.