What is Tranche 2?
Tranche 2 is the second phase of Australia's AML/CTF reforms. It extends obligations to designated non-financial businesses and professions: sectors that FATF has long identified as high-risk channels for money laundering and terrorism financing, but which Australia had not regulated until now.
November 2024
Legislation passed
The AML/CTF Amendment Act 2024 passes Parliament, receiving Royal Assent in December 2024.
31 March 2026
Virtual asset services commence
New obligations apply to virtual asset service providers, who must enrol with AUSTRAC by 28 April 2026.
1 July 2026
Tranche 2 obligations commence
Accountants, real estate agents, conveyancers, trust and company service providers, dealers in precious metals and stones, and lawyers become reporting entities.
29 July 2026
Enrolment deadline
Newly regulated businesses must be enrolled with AUSTRAC. Reporting and program obligations are now active.
Today
Obligations are live
AUSTRAC expects you to be enrolled and running your program.
Core obligations for every Tranche 2 business
Eight things AUSTRAC expects from every reporting entity. Your program needs to cover each one.
- Enrol with AUSTRAC
- Every Tranche 2 business providing designated services must enrol with AUSTRAC. Failing to enrol is itself an offence.
- Maintain an AML/CTF program
- A written program covering risk assessment, customer due diligence, transaction monitoring and staff training.
- Customer due diligence
- Identify and verify customers before providing designated services. Apply enhanced due diligence to higher-risk customers, including PEPs and those from high-risk jurisdictions.
- Ongoing monitoring
- Monitor business relationships and transactions to detect activity that doesn't fit the customer's profile or the nature of the relationship.
- Suspicious matter reports
- Report suspicious matters to AUSTRAC within 24 hours for terrorism financing suspicions, and within 3 business days for other matters.
- Threshold transaction reports
- Report physical cash transactions of AUD 10,000 or more to AUSTRAC within 10 business days.
- Record keeping
- Keep customer identification, transaction and program records for at least 7 years.
- Annual compliance reporting
- Submit an annual compliance report to AUSTRAC covering how well your program works and any issues found.
Find your sector. Know your obligations.
Open your sector to see its designated services, key money laundering and terrorism financing risks, and the actions to take first.
Accountants
Accountants and accounting firms providing designated services, including tax advice, financial statement preparation, business structuring and trust administration, are now reporting entities under the AML/CTF Act.
Designated services
- Preparing or lodging tax returns and financial statements
- Providing advice on business structures, mergers or acquisitions
- Managing or administering client funds or accounts
- Providing company secretarial or registered agent services
- Establishing or managing trusts, companies or other legal arrangements
Key ML/TF risks
- Use of accounting services to legitimise proceeds of tax evasion and fraud
- Complex corporate structures used to obscure beneficial ownership
- Trust accounts used as layering vehicles
- Professional enablement of financial crime through structuring advice
Priority actions
- 1Enrol with AUSTRAC immediately
- 2Map all designated services provided to clients
- 3Implement client identification and verification procedures
- 4Develop a written AML/CTF program
- 5Train all relevant staff on AML/CTF obligations
Real estate agents
Real estate agents facilitating the purchase or sale of real property are designated service providers. Real estate is one of the most significant money laundering vectors in Australia, which is why the sector is a priority Tranche 2 category.
Designated services
- Acting as agent in the purchase or sale of real property
- Facilitating the transfer of real property on behalf of a client
- Providing property management services involving client funds
Key ML/TF risks
- Property purchases used to place and integrate large sums of illicit cash
- Third-party purchasers and shell companies used to obscure true buyers
- All-cash transactions with no apparent financing
- Offshore buyers from high-risk jurisdictions
- Undervalued or overvalued transactions used to transfer value
Priority actions
- 1Enrol with AUSTRAC and identify all designated services
- 2Implement buyer and seller identification procedures
- 3Establish beneficial ownership verification for corporate purchasers
- 4Develop transaction monitoring for unusual payment patterns
- 5Train sales agents on red flag indicators specific to real estate
Conveyancers
Conveyancers handling property transactions face the same money laundering risks as real estate agents, plus additional exposure through their management of settlement funds and trust accounts.
Designated services
- Preparing or lodging conveyancing documents
- Facilitating the settlement of real property transactions
- Holding or managing client settlement funds in trust
Key ML/TF risks
- Settlement funds sourced from illicit proceeds
- Third-party payments and unusual fund flows at settlement
- Multiple property transfers in quick succession
- Clients reluctant to provide identification or ownership information
- Trust account manipulation
Priority actions
- 1Enrol with AUSTRAC
- 2Identify the client at the start of each matter
- 3Establish procedures for verifying the source of settlement funds
- 4Develop controls for third-party payments
- 5Review trust account procedures for AML/CTF compliance
Jewellers and precious metals dealers
Dealers in precious metals, precious stones and jewellery are designated service providers for transactions at or above the applicable threshold. High-value portable assets are a well-documented way to place and integrate illicit funds.
Designated services
- Buying or selling precious metals (gold, silver, platinum) above threshold
- Buying or selling precious stones (diamonds, rubies, emeralds) above threshold
- Buying or selling jewellery above the applicable transaction threshold
Key ML/TF risks
- Cash purchases of high-value items used to place illicit funds
- Structured transactions designed to avoid reporting thresholds
- Resale of purchased items to convert them to clean funds
- Third-party purchasers with no apparent connection to the goods
- Unusual interest in resale value rather than the item itself
Priority actions
- 1Identify all transactions that meet the designated service threshold
- 2Enrol with AUSTRAC
- 3Implement point-of-sale identification procedures
- 4Train sales staff on structuring red flags
- 5Establish cash transaction reporting procedures
Virtual digital asset providers
Virtual digital asset (VDA) service providers, including cryptocurrency exchanges, wallet providers and digital asset brokers, face some of the most complex AML/CTF obligations. The pseudonymous, cross-border nature of digital assets creates significant financial crime exposure.
Designated services
- Exchanging virtual digital assets for fiat currency (and vice versa)
- Exchanging one virtual digital asset for another
- Transferring virtual digital assets on behalf of customers
- Safekeeping or administering virtual digital assets
- Providing financial services related to virtual digital assets
Key ML/TF risks
- Pseudonymous transactions obscuring the identity of parties
- Mixers, tumblers and privacy coins used to layer funds
- Cross-border transfers to high-risk jurisdictions
- Rapid conversion between asset types to obscure transaction trails
- Peer-to-peer transactions bypassing exchange controls
Priority actions
- 1Enrol with AUSTRAC as a matter of urgency
- 2Implement robust KYC and identity verification at onboarding
- 3Deploy transaction monitoring that detects crypto-specific typologies
- 4Establish blockchain analytics capabilities
- 5Develop enhanced due diligence for high-risk customers and jurisdictions
Trust and company service providers
Providers of trust and company services, including forming companies, trusts and other legal arrangements, are designated service providers. These services are often exploited to build ownership structures that hide who really owns assets and funds.
Designated services
- Forming companies, trusts or other legal arrangements on behalf of clients
- Acting as a director, trustee or nominee on behalf of a client
- Providing a registered office or business address
- Managing or administering legal arrangements
- Arranging for another person to act in these capacities
Key ML/TF risks
- Shell companies and trusts used to obscure beneficial ownership
- Layered corporate structures designed to frustrate law enforcement
- Nominee arrangements used to distance criminals from their assets
- Cross-border structures exploiting jurisdictional gaps
- Professional enablement of financial crime through structure creation
Priority actions
- 1Enrol with AUSTRAC
- 2Implement beneficial ownership identification and verification
- 3Develop enhanced due diligence for complex or opaque structures
- 4Monitor client structures for changes in ownership
- 5Train staff on red flags in nominee and shell arrangements
Obligations by sector
Select a sector to highlight its column.
| Obligation | ||||||
|---|---|---|---|---|---|---|
| Enrol with AUSTRAC | Applies | Applies | Applies | Applies | Applies | Applies |
| AML/CTF program | Applies | Applies | Applies | Applies | Applies | Applies |
| Customer due diligence | Applies | Applies | Applies | Applies | Applies | Applies |
| Ongoing monitoring | Applies | Applies | Applies | Does not typically apply | Applies | Applies |
| Suspicious matter reports | Applies | Applies | Applies | Applies | Applies | Applies |
| Threshold transaction reports | Does not typically apply | Applies | Applies | Applies | Applies | Does not typically apply |
| Record keeping | Applies | Applies | Applies | Applies | Applies | Applies |
- AppliesEnrol with AUSTRAC
- AppliesAML/CTF program
- AppliesCustomer due diligence
- AppliesOngoing monitoring
- AppliesSuspicious matter reports
- Does not typically applyThreshold transaction reports
- AppliesRecord keeping
Indicative only. Your obligations depend on the specific designated services your business provides. Seek specialist advice for your circumstances.
Enforcement
The cost of non-compliance
AUSTRAC has shown it will pursue significant enforcement action.
- Civil penalties of up to 100,000 penalty units per contravention for a corporation, currently over AUD 36 million
- Criminal penalties for serious or repeated breaches
- Enforceable undertakings and remedial directions
- Reputational damage from public enforcement action
Am I a Tranche 2 entity?
You are if your business provides a designated service under the amended AML/CTF Act. That covers many accountants, real estate agents, conveyancers, trust and company service providers, lawyers, dealers in precious metals and stones, and virtual asset providers. It depends on the services you provide, not your job title.
What is a designated service?
A designated service is a specific activity listed in the Act, such as buying or selling real property for a client, forming a company or trust, or managing client funds. The obligations attach to those activities.
What happens if I don't enrol?
Providing a designated service without being enrolled is an offence. AUSTRAC can also seek civil penalties, issue infringement notices, or require remedial action.
How long does it take to build a program?
For most small and mid-sized businesses, a proportionate program can be designed and in place within weeks. Larger or higher-risk businesses take longer. We give you a timeline after the first assessment.
Ready to get compliant?
Tranche 2 readiness is our specialty. We'll assess your obligations, identify your gaps and build a compliant program, fast.
