What is AML/CTF Tranche 2?

AML/CTF Tranche 2 refers to the second phase of Australia’s Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) reforms. In simple terms, Australia is expanding its anti-money laundering laws to include more jobs and industries, such as accountants, lawyers, and real estate agents, so they must follow the same rules for preventing money laundering and terrorism financing.

For the first time in Australia, these “gatekeeper” professions will have legal obligations to detect and prevent money laundering and terrorism financing, much like banks and financial institutions have done for years.

Why is Australia Introducing AML/CTF Tranche 2 Reforms?

Australia is introducing AML/CTF Tranche 2 to strengthen its defences against financial crime and align with international standards set by the Financial Action Task Force (FATF).

For years, global regulators have urged Australia to expand its AML laws to cover non-financial professions that are commonly misused by criminals to hide illicit funds. Examples include property purchases, trust structures, and complex business arrangements.

By introducing Tranche 2, Australia aims to close these regulatory gaps, protect its financial system, and maintain its global reputation as a trusted and transparent market.

Timeline of AML/CTF Tranche 2 Reforms

The Tranche 2 reforms are being introduced progressively, giving businesses time to prepare. Below is the key timeline:

• November 2024: Parliament passed the AML/CTF Amendment Act 2024, marking the beginning of Tranche 2 implementation.
• Throughout 2025: Government and AUSTRAC consultations provided guidance to affected industries on how to prepare for their upcoming obligations.
• 31 March 2026: New entities covered by Tranche 2, such as accountants, lawyers, and real estate agents, must enrol with AUSTRAC.
• 1 July 2026: Tranche 2 obligations take effect. From this date, newly regulated sectors must comply with AML/CTF laws, including customer identification, transaction monitoring, and suspicious matter reporting.

This transition period allows businesses to build their AML frameworks before enforcement begins.

Who Will Be Covered Under AML/ CTF Tranche 2?

Tranche 2 expands AML/CTF obligations to include the following sectors:

• Real Estate Agents and Property Developers – those involved in buying, selling, leasing, or managing property.
• Lawyers and Conveyancers – when managing client funds, setting up entities, or handling property or business transactions.
• Accountants and Accounting Firms – when providing financial management, tax planning, or company setup services.
• Trust and Company Service Providers – assisting in establishing or managing legal entities and trusts.
• Dealers in High-Value Goods – including dealers in precious metals and stones handling large cash transactions.
• FinTech and Virtual Asset Service Providers – such as cryptocurrency exchanges, wallet providers, and digital payment platforms.

In total, around 90,000 additional businesses are expected to fall under the AML/CTF regime once Tranche 2 is fully implemented.

AML for Real Estate Agents

Real estate transactions are a common method for laundering money due to their high value and complex ownership structures.

Under Tranche 2, real estate agents, buyers’ agents, and developers will need to verify client identities, assess the source of funds, and report suspicious activity. For example, large unexplained cash payments or overseas buyers using shell companies will need to be flagged.

By implementing AML procedures, property professionals will play a vital role in preventing criminal funds from entering Australia’s property market.

AML for Law Firms

Lawyers and law firms are being brought into the AML/CTF framework due to the financial nature of many legal services.

When managing client funds, setting up companies or trusts, or assisting with property deals, lawyers will now need to conduct due diligence, identify clients, and report suspicious matters to AUSTRAC.

These obligations will not override legal professional privilege, meaning client confidentiality remains protected while lawyers contribute to Australia’s broader crime prevention efforts.

You can read our detailed guide for AML for Law Firms.

AML for Accountants

Accountants and accounting firms will face AML/CTF requirements when they manage client money, establish business structures, or handle large transactions.

Tranche 2 means accountants will need to verify clients’ identities, assess risk levels, and maintain compliance programs. AUSTRAC and industry associations are developing practical templates to make compliance easier for smaller practices.

With strong AML controls, accountants can protect both their clients and their reputation.

AML for FinTech and Virtual Asset Providers

FinTech companies and crypto-related businesses will also see expanded AML/CTF regulation under Tranche 2.

New definitions will capture services such as:

• Crypto-to-crypto and crypto-to-fiat exchanges
• Virtual asset transfers and custodial wallets
• Token issuance and digital asset platforms

These businesses will need to enrol with AUSTRAC, verify customers, and monitor transactions to prevent misuse of digital assets.

Tranche 2 ensures the digital finance industry remains transparent and trustworthy in a rapidly evolving market.

AML for Money Remitters

Money remitters have been part of Australia’s AML/CTF regime since the first tranche.

While Tranche 2 does not newly regulate them, it updates reporting processes to modernise and streamline international transaction reporting.

Existing remitters should stay informed of these updates to ensure they remain compliant under the revised system.

How Businesses Can Prepare for AML/CTF Tranche 2

If your business will soon fall under Tranche 2, now is the time to prepare. Key steps include:

1. Enrol with AUSTRAC before 31 March 2026.
2. Develop an AML/CTF Program tailored to your business and risk profile.
3. Conduct Customer Due Diligence (KYC) on clients and beneficial owners.
4. Monitor and Report suspicious or large transactions.
5. Maintain Records for at least seven years.
6. Train Staff and Appoint a Compliance Officer to manage ongoing obligations.

Taking these steps early helps avoid penalties and protects your business reputation.

The Bigger Picture

AML/CTF Tranche 2 represents one of the most significant reforms to Australia’s financial crime framework in nearly two decades. It closes long-standing regulatory gaps and ensures that a wide range of industries now share responsibility for preventing money laundering and terrorism financing.

While the changes may seem complex, they are designed to create a stronger, fairer, and safer financial system. By preparing now, businesses can turn compliance into a competitive advantage that demonstrates integrity and trustworthiness to their clients and partners.

At AML House, we specialise in helping Australian businesses meet AML/CTF obligations through tailored programs, training, and compliance support. Whether you are an accountant, lawyer, real estate agent, fintech operator, or money remitter, our team can help you navigate the Tranche 2 transition with confidence.

Ready to prepare for AML/CTF Tranche 2?

Contact AML House today to get started with your compliance program and ensure your business is ready for Australia’s new AML/CTF era.