What is AUSTRAC Tranche 2 and who does it affect?
Tranche 2 refers to the second wave of reforms to Australia's Anti-Money Laundering and Counter-Terrorism Financing Act 2006, enacted through the AML/CTF Amendment Act 2024. It extends AML/CTF obligations to designated non-financial businesses and professions (DNFBPs) — bringing Australia into line with FATF standards that most comparable jurisdictions implemented years ago.
Effective date
Obligations for Tranche 2 entities take effect 1 July 2026. AUSTRAC has signalled that it expects affected businesses to be actively preparing now, not waiting until the deadline.
Who is affected?
The following professional services firms will become AUSTRAC reporting entities:
- Lawyers and barristers — when providing services involving the purchase or sale of real estate, management of client money or assets, management of bank accounts, organisation of contributions to companies or trusts, or formation and management of companies.
- Accountants and tax agents — when providing the above services or preparing financial statements, auditing accounts, or providing tax advice in connection with transactions.
- Real estate agents — for sales and some long-term leasing transactions. Certain residential property categories and threshold-based exemptions apply.
- Trust and company service providers (TCSPs) — businesses that form companies, provide registered office or directorship services, act as nominee shareholders, or administer trusts on behalf of others.
- Conveyancers — when handling property transfer transactions.
What Tranche 2 entities must do
By 1 July 2026, each affected firm must:
- Enrol with AUSTRAC as a reporting entity via the AUSTRAC Online portal.
- Conduct a ML/TF risk assessment of the firm's products, services, customers, and delivery channels.
- Implement an AML/CTF programme — documented Part A (governance) and Part B (customer identification) policies.
- Establish CDD processes to verify client identity at onboarding and apply enhanced due diligence to higher-risk clients.
- Set up transaction monitoring and SMR/TTR filing capabilities via AUSTRAC Online.
- Train staff to recognise and escalate suspicious activity.
Why it matters now
FATF's mutual evaluation of Australia is ongoing. Firms that cannot demonstrate a compliant programme at the point of assessment risk becoming an enforcement example — and AUSTRAC's track record shows it is prepared to act. The time to implement is before the deadline, not in response to a compliance assessment notice. For professional services firms screening new clients as part of their onboarding process, tools like VerityRadar can help satisfy the CDD leg of the programme.