Plain-English answers to the most common Tranche II AML/CTF questions from accountants, lawyers, conveyancers, real estate agents, and precious metals dealers across Australia.
Tranche II refers to the second phase of Australia’s Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) reforms, enacted through the AML/CTF Amendment Act 2024. From 1 July 2026, the regime expands beyond financial services to capture professional services firms and businesses that FATF classifies as Designated Non-Financial Businesses and Professions (DNFBPs) — including lawyers, accountants, conveyancers, real estate agents, and dealers in precious metals and stones.
Tranche II applies to businesses and professionals that provide one or more designated services with a geographical link to Australia, from 1 July 2026. The main sectors captured include:
A designated service is a specific type of service that triggers AML/CTF obligations when provided in the course of carrying on a business with a geographical link to Australia. The regime does not regulate professions as a whole — it regulates what they do. For professional services firms, designated services relate to assisting clients in transactions involving money, property, or the creation and management of legal structures. For precious metals dealers, a designated service arises when transactions of $10,000 or more are conducted in cash or virtual assets.
Penalties for failing to comply with AML/CTF obligations are severe. Civil penalties can reach $6,600,000 for individuals and $33,000,000 for a body corporate. Criminal penalties apply for serious breaches including failing to report suspicious matters, structuring transactions to avoid reporting obligations, and tipping off a customer that a report has been made. AUSTRAC also has powers to impose enforceable undertakings, infringement notices, and injunctions.
Yes. AML/CTF obligations apply to all reporting entities regardless of size, turnover, or transaction volume. There is no small business exemption. However, the regime is risk-based — smaller, lower-risk businesses may be able to implement simpler, more proportionate compliance programs. AUSTRAC has published sector-specific Starter Kits to assist smaller businesses, but professional advice is recommended to ensure your program is genuinely tailored.
AUSTRAC enrolment for Tranche II entities opens on 31 March 2026. You cannot enrol before this date. Once the portal opens, you will register via the AUSTRAC Business Portal and complete the Business Profile Form.
If you provide Tranche II designated services commencing 1 July 2026, you must complete your AUSTRAC enrolment by 29 July 2026 — within 28 days of commencing a designated service. If your registered details change after enrolment, you must notify AUSTRAC within 14 days of the change.
If your business is already enrolled with AUSTRAC for existing designated services (for example, as a financial services provider or remittance dealer), you must update your enrolment to include the new Tranche II designated services from 31 March 2026. Your existing AML/CTF program will also need to be updated to cover the new services and associated risks.
An AML/CTF program is a written, risk-based document that sets out your business’s policies, procedures, systems, and controls for managing money laundering and terrorism financing risks and meeting your AUSTRAC obligations. If you are a Tranche II reporting entity, you must have an operational AML/CTF program in place by 1 July 2026. Generic templates will not satisfy AUSTRAC — your program must be tailored to your specific business, client base, and risk profile.
Your ML/TF Risk Assessment identifies and analyses your specific money laundering and terrorism financing risks based on your client types, service offerings, delivery channels, transaction types, and geographies. It forms the foundation of your AML/CTF program and must be kept current as your business changes.
AUSTRAC’s sector-specific Starter Kits are a useful starting point — but they are explicitly not one-size-fits-all templates. You must customise the Starter Kit to reflect your actual operations, clients, and risk profile. WilliamThomas&Co. recommends using the Starter Kit as a framework and engaging specialist advice to ensure your program is genuinely tailored and AUSTRAC-ready.
CDD is the process of identifying and verifying your customers’ identities before providing a designated service. At minimum you must collect and verify: full legal name, date of birth (for individuals), and address. For companies and trusts you must also identify beneficial owners. Enhanced Due Diligence (EDD) is required for higher-risk customers including Politically Exposed Persons (PEPs) and clients from high-risk jurisdictions.
Pure tax compliance and lodgement work is generally not a designated service. However, if your tax work leads directly into transaction execution — for example, advising on and then implementing a trust restructure, or managing client funds as part of a business sale — those additional steps may be captured. The test is whether you are directly advancing a transaction of the type described in the designated services framework, not whether you hold an accounting qualification.
Yes. There is no exemption for residential conveyancing. A conveyancer preparing a contract for sale is directly advancing a property transaction and is providing a designated service. AUSTRAC has confirmed that obligations can arise during preparatory steps — such as title searches or holding deposit funds — even if the transaction does not ultimately complete.
No. The regime captures only the specific services listed in Table 6 of the AML/CTF Act. Pure legal advice, litigation, advocacy work, and in-house legal work are generally not captured. However, any work that involves directly advancing a property transaction, creating legal structures, managing client money, or acting in a nominee capacity is likely in scope. Each practice needs to map its services against Table 6 to determine its exact obligations.
Yes, in part. The AML/CTF Act expressly protects legal professional privilege (LPP) from 1 July 2026. A practice may refuse to disclose LPP-protected information and may decline to file a Suspicious Matter Report where the entire grounds for suspicion consist of LPP-protected information. However, LPP does not exempt a practice from enrolment, program, CDD, or record-keeping obligations.
A dealer provides a designated service when it buys or sells precious metals, stones, or products in a transaction where payment of $10,000 or more is made in physical cash, virtual assets (cryptocurrency), or a combination of both — including across linked transactions. Deliberately splitting transactions to stay below $10,000 is a separate criminal offence known as structuring.
For most small-to-medium professional services firms, WilliamThomas&Co. can deliver a completed, AUSTRAC-ready program within four to eight weeks of engagement, including risk assessment, program documentation, and CDD system design. Given the 1 July 2026 deadline, we recommend engaging no later than May 2026 to allow adequate implementation time.
Yes. AML/CTF compliance is not a one-time exercise. AUSTRAC expects reporting entities to review and update their programs as their business and the regulatory environment evolve. WilliamThomas&Co. offers annual program reviews, regulatory update briefings, additional staff training, and on-call advisory support — as well as AUSTRAC engagement support if your business becomes subject to an enquiry or audit.
Contact Alison directly at alison@williamthomasandco.com.au or book a free no-obligation scoping consultation via our Contact page. We’ll assess whether your business is in scope, identify your obligations, and provide a clear, fixed-fee proposal — usually within 48 hours.
WilliamThomas&Co. offers a no-obligation Tranche II scoping consultation. With less than four months to the 1 July 2026 deadline, early action is the only safe strategy.