Who is affected by AUSTRAC Tranche 2 reforms?

Tranche 2 expands Australia's AML/CTF obligations to approximately 90,000 new reporting entities — primarily Designated Non-Financial Businesses and Professions (DNFBPs) including accountants, lawyers, conveyancers, real estate agents, trust and company service providers, and dealers in precious metals and stones.

When do Tranche 2 obligations commence?

The Tranche 2 AML/CTF reforms commenced on 1 July 2026. The deadline to enrol with AUSTRAC is 29 July 2026. The deadline to notify AUSTRAC of your AML/CTF Compliance Officer is also 29 July 2026. The first independent evaluation of your AML/CTF program is not required until 1 July 2029.

What are the core obligations under Tranche 2?

Tranche 2 reporting entities must: (1) Enrol with AUSTRAC by 29 July 2026; (2) Adopt a written AML/CTF Program tailored to their business; (3) Appoint and notify an AML/CTF Compliance Officer; (4) Conduct Customer Due Diligence (CDD) on all clients receiving designated services; (5) Screen clients against sanctions and PEP lists; (6) Report suspicious matters (SMRs) and threshold transactions (TTRs) to AUSTRAC; (7) Keep records for 7 years; and (8) Complete an independent evaluation by 1 July 2029.

What is the Threshold Transaction Report (TTR) threshold?

A Threshold Transaction Report (TTR) must be lodged with AUSTRAC whenever a client conducts a physical cash transaction of AUD 10,000 or more. TTRs must be lodged within 10 business days. Electronic transfers do not trigger a TTR obligation — only physical notes and coins.

When must a Suspicious Matter Report (SMR) be lodged?

An SMR must be lodged within 24 hours of forming a suspicion related to terrorism financing, or within 3 business days for all other suspicious matters. Once you form a reasonable suspicion, reporting is mandatory — you do not need proof or certainty. It is a criminal offence to tip off a client that an SMR has been or is being prepared about them.

How long must AML/CTF records be kept?

All AML/CTF records — including customer identification documents, transaction records, risk assessments, AML/CTF program documents, and SMR/TTR reports — must be retained for a minimum of 7 years. Records must be kept in a format that allows them to be produced to AUSTRAC on request.

What are the penalties for non-compliance with AUSTRAC Tranche 2?

Civil penalties for serious non-compliance can reach AUD 22.2 million per contravention for corporations and AUD 4.4 million for individuals. Criminal penalties for the most serious AML/CTF offences can include imprisonment. AUSTRAC also has powers to issue infringement notices, accept enforceable undertakings, and seek injunctions.

Do small accounting firms need to comply with Tranche 2?

Yes. There is no small business exemption under the AML/CTF Act. However, AUSTRAC has published Program Starter Kits designed specifically for small businesses in newly regulated Tranche 2 sectors. Compliance platforms like Clear AML are purpose-built for small and medium accounting practices, with automated KYC, risk assessment, and AUSTRAC reporting tools available from AUD 149 per month.

Key Takeaways

What does AUSTRAC expect by 1 July 2026?

By 1 July 2026, AUSTRAC expects all Tranche 2 entities (lawyers, accountants, real estate) to have: 1) Completed their enrolment as a reporting entity, 2) Implemented a fully documented AML/CTF Risk Management Program, 3) Appointed a Compliance Officer, and 4) Commenced active customer due diligence (KYC) on all new and existing clients receiving designated services.

AML/CTF Reform Update 2026Last updated: 22 May 2026

Tranche 2 AML Reforms:
The Complete Australian Guide (2026)

The AML/CTF Act is expanding to include lawyers, accountants, and real estate professionals. Don't get caught out by the new "Gatekeeper" regulations.

Jay S

Last updated: 22 May 2026

Identity Verified

KyC Check Completed

Compliance Status

Risk AssessmentLow Risk

PEP ScreeningClear

Your firm is compliant with Tranche 2 reporting obligations.

SMR Generated

Ready to submit to AUSTRAC

What are the Tranche 2 Reforms?

Tranche 2 is the second stage of Australia's Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Act. It extends regulation to 'Gatekeeper' professions, requiring Accountants, Real Estate Agents, and Lawyers to verify client identities and report suspicious activity to AUSTRAC.

Who is caught in the net?

Tranche 2 expands the "Gatekeeper" provisions to non-financial professions. If you fall into these categories, you must enroll.

Real Estate Professionals

Agents, property managers, and developers facilitating sales or managing client funds.

Buyer's Agents
Property Developers
Sales Agents

Accountants

Professionals managing client money, assets, or company formation structures.

Tax Agents
Business Advisors
Trust Managers

Lawyers & Conveyancers

Firms providing designated services related to asset transactions or legal entity creation.

Conveyancers
Solicitors
Notaries

Implementation Roadmap

When do the rules change?

Aug 2025

Legislation

Reforms introduced to Parliament.

Oct 2025

Passing

Bills expected to pass Senate.

Jan 2026

Guidance

AUSTRAC sector-specific rules.

31 Mar 2026

Enrolment Open

Registration with AUSTRAC begins.

29 Jul 2026

Enrolment Due

Deadline for new registrations.

1 Jul 2026

Compliance

Obligations are live and mandatory.

The Three Pillars of Compliance

Tranche 2 isn't just about checking IDs. It requires a holistic Program to manage financial crime risk.

1. KYC & CDD

You must verify the identity of every client before providing designated services. This includes Beneficial Owner tracing for companies.

Electronic Verification (Safe Harbour)

PEP & Sanctions Screening

2. Reporting

You act as the eyes and ears of AUSTRAC. You must report certain transactions and suspicious behaviors.

Suspicious Matter Reports (SMR)

Threshold Transaction Reports (TTR)

3. Program

You must have a written AML/CTF Program tailored to your business risks, reviewed regularly.

risk Assessment Matrix

Staff Training Log

Feature

The Old WayManual Processes

ClearAMLAutomated Platform

Identity Verification

Manual ID Photocopies

Biometric Digital ID

PEP Screening

Google Searches

Global Watchlist API

Risk Assessment

Excel Spreadsheets

Dynamic Scoring Engine

Record Keeping

Filing Cabinet (7 Years)

Secure Cloud Vault

Ongoing Monitoring

Manual Periodic Reviews

Automated Alerts & Re-screening

Cost Per Check

$30.00 + Admin Time

$8 Flat rate (Identity verification + AML Screening)

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Frequently Asked Questions

Common questions about the 2026 Reforms.

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