As part of its commitment to combating financial crimes, the Australian Government recently passed legislation known as the ‘Tranche 2’ reforms. These reforms fall under the Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Act. Effective from 1 July 2026, these changes expand the scope of AML/CTF obligations to include several professions and industries not previously included in the regulatory framework.
While many of the discussions we’ve heard among industry professionals have focused on conveyancers and property lawyers as the impacted groups, the reality is that a much broader range of professionals will be affected.
Understanding AML/CTF and Tranche 2
The AML/CTF Act, administered by the Australian Transaction Reports and Analysis Centre (AUSTRAC), is designed to prevent criminals from exploiting financial systems for money laundering and terrorism financing. Initially, the Act focused on financial institutions and casinos, the traditional methods criminals used to launder illegal funds. However, over time and recognising vulnerabilities in other sectors, the government has widened the net.
Most recently, the Tranche 2 reforms were passed to encompass additional professions identified as high-risk. This move aligns Australia with international standards set by the Financial Action Task Force (FATF).
Who is affected by Tranche 2?
From 1 July 2026, AML/CTF obligations will extend beyond financial institutions to a broader range of industries that handle high-value transactions and financial services. While many assume these changes only affect conveyancers and property lawyers, the reality is that a wide set of businesses and professionals will need to comply with these new regulations. Here’s who will be impacted:
Real Estate Professionals
This category covers individuals and businesses involved in selling, buying, and transferring real estate, including:
- Real estate agents & buyers’ agents: Professionals who act on behalf of property buyers or sellers to facilitate real estate transactions.
- Property developers: Companies or individuals selling house-and-land packages, apartments off-the-plan, or vacant land in new subdivisions without an independent real estate agent.
Why are they included?
Real estate transactions are a common target for money laundering, as criminals seek to move illicit funds into legitimate assets. Agents and developers must conduct due diligence and report suspicious transactions to AUSTRAC.
Conveyancers & Lawyers
Legal professionals involved in property transactions and financial settlements will be required to implement AML/CTF controls. This includes:
- Conveyancers: Those handling property transfers for clients, including due diligence and property settlements.
- Property and corporate lawyers: Assisting in buying, selling, or transferring real estate, companies, or legal arrangements.
- Trust and estate lawyers: Managing transactions related to trusts and other legal structures.
Why are they included?
Lawyers and conveyancers often facilitate large financial transactions, making them vulnerable to exploitation by criminals laundering money through property deals or corporate arrangements.
Transfers of property that result from an order of the court are not included in the Tranche 2 regulations. This includes conveyancers handling a deceased estate transfer from the deceased party to the will’s beneficiaries and court-ordered property settlements for the transfer of marital assets after a marriage breakdown.
Trust and Company Service Providers
This category covers businesses involved in the creation, structuring, or management of companies and trusts, including:
- Company formation agents: Businesses that register new companies, partnerships, or trusts on behalf of clients, including filing documentation with ASIC, or those who deal in the sale or transfer of shelf companies.
- Nominee shareholders and directors: Individuals or firms who hold assets on behalf of others, which can obscure the true ownership of funds or companies.
- Trustee services: Professionals or firms managing express trusts or other legal structures on behalf of clients.
- Corporate secretarial services: Assisting with corporate restructuring, compliance, and governance.
Why are they included?
These services can be misused for financial crimes, such as setting up shell companies to disguise ownership, evade taxes, or move illicit funds internationally.
Corporations under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 are also not included in the Tranche 2 measures.
Accountants & Financial Professionals
AML/CTF obligations will now extend to accountants who provide financial services related to property transactions, business structuring, and asset management. This includes:
- Accountants providing financial planning services: Assisting with corporate structuring, debt financing, or high-value transactions.
- Business and tax consultants: Providing advice on acquisitions, investments, or asset management.
- Trust account managers: Handling escrow accounts or holding funds on behalf of clients.
Why are they included?
Criminals often exploit financial professionals to move illicit funds through complex corporate structures or false accounting practices to conceal money laundering.
Businesses that operate a trust account concerning a service not covered by Tranche 2 regulations are not impacted by these measures. For example, a criminal lawyer who manages a trust account but does not handle any transactions that would give rise to an obligation under the regulations.
Dealers in Precious Metals, Stones & Products
Businesses dealing with high-value, easily transportable assets will need to implement AML/CTF measures, including:
- Precious metal dealers: Businesses that trade in precious metals, such as gold, silver, platinum, and palladium.
- Jewellers & gemstone traders: Those selling diamonds, pearls, and other high-value gems.
- Luxury watch and collectable traders: Businesses dealing in high-end jewellery, luxury watches, and rare items made of or containing precious metals or stones.
Why are they included?
Criminals use precious metals and stones to launder money as these assets are easily bought, sold, or transported across borders without drawing suspicion.
The Tranche 2 reforms only apply to businesses that deal in physical currency or virtual asset payments of $10,000 or more. Businesses that accept and make payments via other forms of exchange, such as EFT or cheque, are not impacted by these reforms.
However, the sale or purchase of bullion (of any value) and through any payment method remains a separate designated service covered under the existing AML/CTF regulations.
Virtual Asset Service Providers (VASPs)
The reforms also expand to virtual assets, reflecting the increasing use of cryptocurrencies and other blockchain-based assets in financial transactions. Unlike other sectors, these changes will apply from 31 March 2026. Businesses affected include:
- Cryptocurrency exchanges: Facilitating crypto exchange, either for currency (e.g., Bitcoin for AUD) or crypto (e.g. Bitcoin for Ether).
- Peer-to-peer crypto trading platforms: Allowing individuals to trade crypto assets directly with each other.
- Crypto custody providers: Businesses offering wallet or storage solutions for digital assets.
Why are they included?
Cryptocurrencies offer anonymity, making them attractive for money laundering, fraud, and other financial crimes.
Key Obligations Under Tranche 2
Currently, further information and guidance are required from AUSTRAC to clearly identify the minimum requirements each sector has to abide by. Scantek is keeping abreast of all updates as they are released and will continue to keep our customers informed.
What we do know is that businesses and professionals newly regulated under these changes will need to:
- Enrol and register with AUSTRAC
- Develop and maintain an AML/CTF Program that is tailored to their business
- Conduct initial & ongoing customer due diligence
- Report certain transactions and suspicious activities
- Maintain records
More information about these obligations as they apply to our customers in different sectors will be shared over the coming months and in the lead-up to the commencement of the Tranche 2 regulations. However, for more information, please visit the AUSTRAC website.
Preparing in the lead-up to the Tranche 2 regulations
Expanding AML/CTF obligations aims to close regulatory gaps that criminals might exploit. AUSTRAC is developing guidance and educational materials to assist newly regulated entities in implementing effective AML/CTF measures. This includes AML/CTF starter program kits for small businesses, aiming to provide practical assistance in establishing compliance programs.
These Tranche 2 reforms represent a significant shift in Australia’s approach to combating financial crime. By extending AML/CTF obligations to a broader range of professions, the government aims to enhance the financial system’s integrity and align with international standards. Affected entities must understand their new obligations and take proactive steps to ensure compliance before the implementation date of 1 July 2026.
Scantek is already trusted by industries with existing AML/CTF obligations, meaning our platform is built to meet stringent compliance requirements. As these regulations expand, working with a provider that is already AML/CTF ready will ensure your business can transition seamlessly with minimal disruption to you or your clients. If you want to get ahead of the changes, contact our team at Scantek now to streamline compliance and protect your business.