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

According to AUSTRAC, the Tranche 2 obligations commenced on 1 July 2026. Enrolment for newly regulated sectors opened on 31 March 2026. Businesses providing designated services on 1 July had to apply to enrol with AUSTRAC by 29 July 2026 (within 28 days of starting). Source: AUSTRAC

Penalties for non-compliance are significant. Civil penalties for corporations can be up to $36.4 million per contravention. For individuals, penalties can reach $7.28 million. AUSTRAC also has the power to issue infringement notices and enforce remedial directions.

Yes. All reporting entities must appoint a dedicated AML/CTF Compliance Officer. This person is responsible for maintaining the program, reporting to AUSTRAC (SMRs/TTRs), and ensuring staff are trained. For smaller firms, this can be a senior staff member, director or the sole practitioner, as long as they are at management level and fit and proper. You must appoint them within 28 days of starting to provide designated services.

The reforms apply specifically to real estate professionals who broker the sale, purchase or transfer of real estate. Property management (leases of 30 years or less) is not a designated service. It also captures buyer's agents and property developers who sell their own developments without an independent agent.

Tranche 2 expands Australia's AML/CTF obligations to an estimated 80,000 newly regulated businesses — 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.

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 clients receiving designated services (existing pre-commencement clients when a trigger, such as a suspicious matter, arises); (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 a first independent evaluation by the deadline set for your AUSTRAC account number (between 30 June 2029 and 31 December 2030), then at least every 3 years.

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.

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. Disclosing SMR information where it could reasonably be expected to prejudice an investigation (tipping off) is a criminal offence; telling the client is the clearest example.

All AML/CTF records — including records of how each customer was identified and verified (copies of ID documents are not required under the AML/CTF Act), 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.

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 ClearAML are purpose-built for small and medium accounting practices, with automated KYC, risk assessment, and AUSTRAC reporting tools available from AUD 49 per month.