What Is AML/CTF Tranche 2?
Australia's Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024 is the most significant reform to the country's financial crime framework in nearly two decades. The original regime — Tranche 1 — covered banks, credit unions, remittance providers and casinos. Tranche 2 dramatically expands the net.
From 1 July 2026, the AML/CTF regime extends to what regulators call gatekeeper professions — professionals who sit at the gateway of financial transactions and corporate structures. This group includes lawyers, real estate agents, dealers in precious metals and stones — and, critically for this article, accountants and trust and company service providers.
The reforms are overseen by AUSTRAC (the Australian Transaction Reports and Analysis Centre) and are designed to align Australia with international standards set by the Financial Action Task Force (FATF). Australia has long been criticised internationally for leaving these professions unregulated, and these changes close that gap.
In practical terms, Tranche 2 is expected to bring approximately 90,000 new reporting entities under the AML/CTF regime — many of them small-to-medium accounting firms that have never dealt with AUSTRAC before.
Which Accountants Are Captured?
Not every accounting activity falls under Tranche 2. The regime applies to accountants who provide what the legislation calls "designated services" — specific activities that carry a higher risk of being exploited for money laundering or terrorism financing.
Under the AML/CTF Act, accounting-related designated services include:
- Setting up or managing legal structures: forming companies, trusts, partnerships or other corporate structures on behalf of clients
- Acting as a registered agent: or nominee director, shareholder or trustee for a client
- Managing client funds or accounts: receiving, holding or disbursing client money as part of a financial transaction
- Facilitating real estate transactions: where the accountant is involved in buying, selling or transferring real property
- Trust and company service provider (TCSP) functions: including managing trusts, providing a registered office address or managing corporate secretarial services
The key test is what you do, not who you are. An accountant who files tax returns and prepares BAS statements but does not manage client funds or set up entities may have limited or no obligations. An accountant who structures corporate entities, manages client bank accounts or provides TCSP-style services almost certainly will be captured.
Use AUSTRAC's official check if you'll be regulated tool to confirm your position.
Your Key Obligations Under AML/CTF Tranche 2
Once established that your firm provides a designated service, you face a suite of new obligations. Here is what Tranche 2 requires of accounting firms:
1. Enrol with AUSTRAC
Before you can legally provide a designated service, you must enrol your firm with AUSTRAC. Enrolment opened on 31 March 2026. You'll need to provide details of your business structure, the services you provide, key personnel and contact information. Enrolment must be completed by 29 July 2026.
2. Develop and Maintain an AML/CTF Program
You must create a written AML/CTF program tailored to your firm's nature, size and complexity. This must be approved by senior management and reviewed regularly.
3. Appoint a Designated AML/CTF Compliance Officer
Your firm must appoint a qualified AML/CTF Compliance Officer — an individual responsible for overseeing the operation of your firm's policies, procedures and reporting obligations.
4. Conduct Customer Due Diligence (CDD)
Before providing a designated service, you must carry out customer due diligence — verifying the client's identity and assessing the risk they pose. For higher-risk clients, enhanced due diligence (EDD) will be required.
5. Monitor Transactions and Client Relationships
Compliance is not a one-time exercise. You must conduct ongoing monitoring of client relationships, staying alert to activity inconsistent with what you know about the client.
6. Report Suspicious Matters and Threshold Transactions
If you identify suspicious activity, you have a legal obligation to submit a Suspicious Matter Report (SMR) to AUSTRAC. Certain cash transactions above a threshold must also be reported.
7. Keep Records
You must maintain detailed records of all CDD steps, transactions and AML/CTF program activities for a minimum period, available to AUSTRAC on request.
8. Train Your Staff
All staff involved in providing designated services must receive AML/CTF training appropriate to their role so they can identify and respond to potential financial crime risks.
Critical Dates & Deadlines
Building Your AML/CTF Program
Your AML/CTF program is the cornerstone of your compliance framework. AUSTRAC has moved away from the old prescriptive Part A / Part B structure toward an outcomes-focused, risk-based model — giving firms greater flexibility but also greater responsibility to design something that genuinely works for their risk profile.
A compliant AML/CTF program for an accounting firm will typically include:
- A risk assessment: a documented assessment of the money laundering and terrorism financing risks specific to your firm's services, client types, geographic exposure and delivery channels
- Policies and procedures: clear, written processes for how your firm will conduct CDD, monitor clients, report suspicious activity and train staff
- Governance arrangements: identifying who is responsible for what, including your AML/CTF Compliance Officer
- Review and update processes: your program must be kept current as your business changes and as AUSTRAC issues updated guidance
Customer Due Diligence (CDD): What It Means for Accounting Clients
CDD for accounting firms under Tranche 2 involves:
- Identity verification: confirming who your client is using reliable, independent sources (government databases, document verification services)
- Beneficial ownership: for corporate and trust clients, identifying the underlying individuals who ultimately own or control the entity
- Politically Exposed Persons (PEP) screening: checking whether clients or associates hold or have held prominent public positions
- Sanctions and adverse media screening: checking clients against sanctions lists and monitoring for negative news
- Source of funds / source of wealth: for higher-risk clients, understanding where their money comes from
Impact on your clients: Existing clients may be asked to provide identity documents, beneficial ownership details or source of funds information if a new designated service is being provided or their risk profile changes. Proactively communicate this change to clients to avoid friction and delays.
Penalties for Non-Compliance
AUSTRAC is not a regulator to be taken lightly. It has demonstrated a willingness to pursue significant enforcement action — including the landmark $1.3 billion penalty against Westpac. Penalties available to AUSTRAC include:
- Civil penalties — infringement notices and financial penalties for breach of obligations
- Criminal prosecution — for serious or wilful non-compliance
- Enforceable undertakings and remedial directions
- Public naming and significant reputational damage
Failing to enrol before providing a designated service is itself a breach. For accounting firms where reputation is everything, the reputational risk alone is reason enough to comply.
Your AML/CTF Tranche 2 Action Checklist
If your firm provides designated accounting services, here is what you need to do before 1 July 2026:
How OrtúsPro Global Can Help Australian Accounting Firms
AML/CTF Tranche 2 is a significant compliance lift — particularly for small and mid-sized accounting practices that may not have dedicated compliance resources. At OrtúsPro Global, we support Australian accounting firms with outsourced accounting operations so you have the bandwidth to handle this regulatory transition.
- Freeing up principal time: while you focus on building your AML/CTF program, our outsourced teams handle your day-to-day bookkeeping, accounts payable/receivable, payroll and reporting
- Client data organisation: preparing clean, structured client data records that form the foundation of your CDD processes
- Process documentation support: helping your team document workflows, policies and procedures in a structured, auditable format
- Scalability during the transition: absorbing the transactional accounting workload so nothing falls behind while you focus on compliance
Need more bandwidth during the AML/CTF transition?
OrtúsPro Global provides outsourced accounting and bookkeeping support to Australian firms — so your team can focus on compliance, not catch-up work.
Frequently Asked Questions
Do all accountants in Australia need to comply with AML/CTF Tranche 2?
Not all accounting services are captured. Tranche 2 applies to accountants who provide 'designated services' — such as setting up legal entities, managing client funds, handling real estate transactions or acting as a registered agent. Purely compliance-based tax return or bookkeeping services may have limited obligations. Use AUSTRAC's official 'check if you'll be regulated' tool to confirm your position.
What is the deadline to enrol with AUSTRAC for Tranche 2?
Enrolment with AUSTRAC opened on 31 March 2026. AML/CTF obligations officially commence on 1 July 2026 and the final deadline to complete enrolment is 29 July 2026. However, you cannot provide designated services until enrolled, so waiting until July is not advisable.
What accounting services are considered 'designated services' under AML/CTF Tranche 2?
Designated services for accountants include: establishing or managing legal structures (companies, trusts, partnerships), managing client money or accounts, facilitating real estate transactions and providing trust or company service provider functions. The full list is contained in the AML/CTF Act and AUSTRAC's sector-specific guidance provides further detail.
What are the penalties for not complying with AML/CTF Tranche 2?
Penalties can include substantial civil financial penalties, infringement notices, enforceable undertakings, criminal prosecution for serious breaches and significant reputational damage. Failing to enrol before providing a designated service is itself a breach. AUSTRAC has demonstrated willingness to pursue enforcement action.
Can outsourced accounting teams help with AML/CTF Tranche 2 compliance?
Yes. Outsourced accounting support can free up principal and senior staff time to focus on building AML/CTF programs, conducting risk assessments and engaging compliance advisers. OrtúsPro Global provides accounting outsourcing support to Australian firms navigating new compliance obligations.
The Bottom Line
AML/CTF Tranche 2 is not a future problem — it is a now problem. With 1 July 2026 approaching, Australian accounting firms that provide designated services should already be enrolled with AUSTRAC, developing their AML programs and building their CDD processes.
Firms that act now will be far better placed than those who wait for certainty and miss the deadline. If you need support managing the operational demands of your firm during this compliance transition, OrtúsPro Global is ready to help.