The financial services industry in Australia is on the brink of a significant regulatory shift with the introduction of Tranche 2 Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) reforms. From 1 July 2026, tax agents and accountants who provide certain services will be subject to new compliance obligations under these expanded laws.
While many professionals in this sector would be familiar with existing due diligence obligations through the Tax Practitioners Board or ATO guidelines, these new AML/CTF requirements will add a whole new layer of regulation. In this article, we look at how the changes will impact you, what steps you should take now, and how Scantek’s secure digital ID verification platform can help make the transition smooth and compliant from day one.
Why are Tranche 2 reforms being introduced?
The original AML/CTF Act, introduced in 2006, was designed to prevent the misuse of financial systems for illegal activities like money laundering, tax evasion, and terrorism financing. Administered by the Australian Transaction Reports and Analysis Centre (AUSTRAC), to date, it’s primarily applied to banks, casinos, and other high-risk sectors.
However, Australia has lagged behind international standards, and the Financial Action Task Force (FATF) has repeatedly highlighted the need to bring other gatekeeper professions into the regulatory fold.
Accountants and tax professionals are in a unique position of trust. Often completing work that involves structuring financial arrangements, setting up companies, managing trusts, and handling large sums of money, these activities can be misused by bad actors if the proper safeguards aren’t in place.
Tranche 2 closes that gap.
Do the AML/CTF reforms impact all tax agents and accountants?
The new AML/CTF obligations don’t apply to every single accounting function. They are specifically tied to services deemed at higher risk of misuse. Here are some examples of activities that would fall under the new regime:
- Setting up, buying, or selling a business on behalf of a client or otherwise reviewing or advising on such transactions
- Managing client money, securities, or other assets
- Creating, operating, or managing companies, partnerships or trusts on behalf of clients
- Acting as an agent in the sale or purchase of real property or business entities
- Provide a registered office address or principal place of business for a legal arrangement or body corporate
What does AML/CTF compliance look like?
AUSTRAC is still finalising the specific guidance for newly regulated professions, including accountants and tax agents. We expect more guidance to be available from AUSTRAC in the latter part of 2025.
However, if we look to existing obligations for current reporting entities (such as financial institutions), we can reasonably expect similar obligations to apply to accountants and tax agents under Tranche 2:
- Enrolling and registering with AUSTRAC
- Developing and maintaining an AML/CTF program tailored to your practice
- Conducting customer due diligence (CDD) to verify identity and assess risk
- Monitoring and reporting suspicious matters and high-value transactions
- Keeping accurate records for at least seven years
- Submitting an annual compliance report
These changes represent a significant increase in operational and documentation requirements. If you’re running a small or mid-size practice, it can feel overwhelming reading the information provided so far from AUSTRAC.
Why is now the time to prepare your business?
While Tranche 2 doesn’t come into force until July 2026, accountants and tax professionals should begin preparing now.
Why? Because, as we’ve seen in other regulated industries, these kinds of changes often come with short implementation windows, complex compliance requirements, and steep penalties for non-compliance. It’s also important to consider the impact on your clients. Adopting best-practice identity verification and due diligence processes now means you’ll minimise disruption later and protect your clients and business from reputational harm.
Are your current identity verification practices enough?
If you’re still accepting scanned IDs via email, verifying client identity through in-person meetings only, or not verifying ID at all, your practice is not AML/CTF ready.
Manual processes expose you to fraud, identity theft, and human error. Worse still, requesting ID over email puts you and your client at risk of Business Email Compromise (BEC), one of Australia’s most common and costly types of cybercrime.
Now is the time to adopt a digital ID solution that meets the standards expected of AML/CTF reporting entities.
How can Scantek support you in your AML/CTF obligations?
Scantek is already the ID verification platform of choice in industries currently subject to AML/CTF obligations, including financial services and gaming. That means our platform is already compliant with many of the practices and standards AUSTRAC is expected to mandate for Tranche 2 professions.
We help your practice stay one step ahead:
- Back-to-source document checks via the Australian Government’s DVS
- Biometric facial recognition and liveness detection
- Flexible verification workflows for in-person and remote clients
- ISO 27001 certified data security
- 100% Australian-hosted servers (no offshore data processing!)
- Automated compliance reporting and auditable records
Scantek simplifies the ID verification process, from onboarding a new business client through to conducting ongoing due diligence for existing ones.
CPA Australia recommends early action
While AUSTRAC guidance is still evolving, respected industry bodies like CPA Australia and the Law Council of Australia have urged their members to begin risk assessments and implement robust ID verification processes.
In information shared on their website around the upcoming AML/CTF changes, CPA Australia looks at how AUSTRAC is expected to approach the reforms, and what practical steps accountants and tax practitioners can begin to take now to protect their business from being exploited by criminals. That includes registering with AUSTRAC, developing and maintaining an AML/CTF compliance program and conducting client due diligence.
A digital platform like Scantek can give you a head start. As an Australian business that works closely with already-regulated AML/CTF industries like gaming and banking, Scantek is closely monitoring AUSTRAC updates and will communicate with our customers as early as possible about relevant changes and news.
What actions can your accounting practice take right now?
- Assess your services: Identify whether your practice includes any high-risk, soon-to-be-regulated activities listed above.
- Review your ID verification process: Is it secure, efficient, and up to future compliance standards?
- Talk to your team: Make sure staff know about the upcoming changes and your implementation plan.
- Engage with your professional body: Stay in the loop with your state or national accounting body for updates and guidance.
- Book a Scantek demo: See how our solution can support AML/CTF compliance without overhauling your entire workflow.
The Tranche 2 AML/CTF reforms will introduce sweeping changes to how accountants and tax agents manage client onboarding, transactions, and identity verification. But with the right digital tools in place, compliance doesn’t have to be overwhelming.
Regulated industries already trust Scantek’s platform, and we are ready to support your firm through the Tranche 2 transition. Book a demo today and see how we make ID verification secure, simple, and seamless.