If You’re an Accountant, Real Estate Agent, Lawyer or Precious Metals Dealer, You Must Read This

Written By Tarun Mago

The AML/CTF Tranche 2 Reforms and the New Compliance Reality

Australia’s Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) regime is undergoing its most significant expansion since its introduction. Known as the Tranche 2 reforms, these changes extend AML/CTF obligations beyond banks and financial institutions to a new set of professions that have historically sat outside the formal compliance perimeter.

If you are an accountant, real estate professional, lawyer, trust or company service provider, or dealer in precious metals and stones, the regulatory environment you operate in is about to change fundamentally. This is not a theoretical reform. It is a structural shift in how Australia manages financial crime risk, and it will materially affect how professional services businesses operate, document decisions, and interact with clients.

1. What Are the Tranche 2 Reforms?

Australia’s AML/CTF framework has, until now, applied primarily to financial institutions such as banks, remittance providers, and casinos. Tranche 2 reforms are designed to close a long-identified gap by bringing so-called “designated non-financial businesses and professions” into the regime.

This expansion aligns Australia with Financial Action Task Force (FATF) standards, which have repeatedly highlighted that professional services and high-value asset transactions present elevated money laundering and terrorism financing risks when left outside formal regulation.

In practical terms, Tranche 2 reforms mean that professions which facilitate:

  • property transactions

  • company formation and structuring

  • movement or custody of high-value assets

  • financial or tax arrangements

will now be subject to mandatory AML/CTF obligations, overseen by AUSTRAC.

This is not about occasional reporting. It is about embedding risk management into everyday business operations.

2. Who Is in Scope?

While final legislative instruments and rules will determine precise coverage, the policy intent is clear and well-documented.

Tranche 2 brings AML/CTF obligations to, among others:

  • Accountants and accounting practices

  • Real estate agents and property professionals

  • Lawyers and legal practices (subject to professional privilege boundaries)

  • Trust and company service providers

  • Dealers in precious metals and precious stones

These sectors are not being targeted arbitrarily. International enforcement experience shows that professional services are frequently used—sometimes unknowingly—as gateways for laundering funds, obscuring beneficial ownership, and legitimising illicit wealth.

The regulatory assumption is no longer “low risk unless proven otherwise.” It is risk must be actively managed and evidenced.

3. What Obligations Will Apply?

The core obligations under the AML/CTF regime are well established and will now apply, in tailored form, to Tranche 2 entities.

These include:

  • Establishing and maintaining an AML/CTF Program proportionate to risk

  • Conducting customer due diligence (CDD) and ongoing monitoring

  • Identifying and verifying beneficial ownership where relevant

  • Submitting Suspicious Matter Reports (SMRs) to AUSTRAC when required

  • Keeping prescribed records for defined periods

  • Training staff to recognise and manage AML/CTF risk

This is not a box-ticking exercise. AUSTRAC’s enforcement approach has consistently emphasised systems effectiveness, not just documentation.

A written policy that does not reflect real decision-making will not withstand regulatory scrutiny.

4. Why These Reforms Matter More Than Many Businesses Expect

Many affected professions have historically treated AML/CTF as something that applies to “the banks.” That mental model is now obsolete.

Once Tranche 2 takes effect:

  • Client onboarding processes will change

  • Risk assessments will become a routine commercial activity

  • Engagement letters and client interactions will carry compliance implications

  • Record-keeping and audit readiness will become operational necessities

Importantly, ignorance will not be a defence. The AML/CTF regime is strict liability in nature for many obligations. Civil penalties can be significant, and reputational damage can be immediate.

For professional firms, compliance maturity will increasingly be interpreted as a proxy for trustworthiness and governance quality.

5. The Real Challenge: Translating Law Into Practice

The hardest part of Tranche 2 will not be understanding the law. It will be operationalising it without breaking the business model.

Professional services firms operate on relationships, judgement, and efficiency. Introducing compliance processes that feel foreign or adversarial can damage client experience if handled poorly.

The firms that succeed will be those that:

  • Embed AML/CTF checks into existing workflows

  • Use risk-based approaches rather than blanket rules

  • Train staff to apply judgement consistently

  • Treat compliance as a decision-support function, not a blocker

This is where many businesses will struggle—and where competitive differentiation will emerge.

6. From Periodic Compliance to Continuous Risk Management

Tranche 2 reforms are part of a broader regulatory shift away from static compliance and toward continuous assurance.

Regulators increasingly expect:

  • Ongoing monitoring rather than annual reviews

  • Evidence that controls are tested and adjusted

  • Visibility over how risk decisions are made in practice

Technology is becoming central to this shift. Automated risk assessments, client screening, control testing, and regulatory change monitoring are no longer “nice to have.” They are how smaller firms achieve compliance parity with larger institutions without unsustainable overhead.

Continuous assurance is not about more work. It is about better signal and fewer surprises.

7. The Bottom Line

The AML/CTF Tranche 2 reforms represent a structural reset for large parts of Australia’s professional services sector. They extend the compliance perimeter into areas that have long operated on trust and professional discretion, and they replace that discretion with documented, defensible risk management.

For accountants, real estate agents, lawyers, and precious metals dealers, the question is no longer whether AML/CTF obligations will apply. It is how quickly and intelligently they will be integrated.

Those who treat Tranche 2 as a compliance burden will experience friction, cost, and disruption. Those who treat it as a governance upgrade will build stronger credibility, smoother operations, and greater resilience in a tightening regulatory environment.

In the new AML/CTF landscape, compliance maturity is no longer optional—and it is no longer invisible.

8. What to Do Next

The Tranche 2 reforms are complex, evolving, and unforgiving to businesses that rely on informal or manual approaches to compliance. Building an AML/CTF framework that is proportionate, defensible, and operationally practical requires more than policy templates. It requires clarity, structure, and continuous assurance.

ComplyEdge helps businesses design, implement, and maintain AML/CTF compliance frameworks that actually work in practice. From risk assessments and AML/CTF programs to ongoing regulatory monitoring and assurance, ComplyEdge supports organisations as the rules change—and as expectations rise.

If your business will be impacted by Tranche 2, now is the time to act.

Contact ComplyEdge to discuss how to meet your AML/CTF obligations with confidence.
Know the rules. Change the game.

Tarun Mago
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