Who needs to comply with AML/CTF Tranche 2 reforms?

The AML/CTF Tranche 2 reforms are reshaping the compliance landscape. These changes extend anti-money laundering and counter-terrorism financing regulations to new sectors, including real estate professionals, conveyancers, and legal experts.

This shift aims to close regulatory gaps and enhance the integrity of the financial system. Dealers in precious metals and stones, accountants, and auditors now face new compliance duties. Trust and company service providers must also adapt.

Understanding these changes is crucial. Organisations must update their compliance frameworks to meet the new standards. Training is essential to navigate these reforms effectively.

Failure to comply can lead to severe penalties. Organisations must prioritise compliance to avoid reputational damage. Embracing these changes can foster a culture of transparency and accountability.

Key dates for AML/CTF reforms implementation

The new Rules do not come into effect straight away. They come into effect in different stages:

• 31 March 2026: Changes to AML/CTF obligations start for current reporting entities, except for threshold transaction reporting and suspicious matter reporting which will remain the same until 2029
• 31 March 2026: Enrolment opens for newly-regulated sectors (tranche 2)
• 1 July 2026: AML/CTF obligations start for tranche 2 entities.

Understanding AML/CTF Tranche 2 reforms

The AML/CTF Tranche 2 reforms are significant regulatory changes aimed at curbing financial crimes by expanding compliance obligations. These reforms align Australia’s regulations with global standards set by the Financial Action Task Force (FATF).

They bring previously unregulated professionals under regulatory oversight and require new procedures to identify and report suspicious activity. Enhanced due diligence is now mandatory across several sectors.

Professions impacted include:

• Real estate agents
• Conveyancers
• Dealers in precious metals and stones
• Accountants and auditors
• Trust and company service providers
• Legal professionals

These reforms go beyond box-ticking—they aim to instil a true culture of compliance. Organisations must fully understand and implement the requirements to maintain operational security and long-term success.

Why are these reforms being introduced?

The key goals of the reforms are to:

• Enhance financial transparency
• Prevent misuse of professional services
• Strengthen trust in financial transactions

They address longstanding gaps in financial oversight and bring Australia into alignment with international FATF standards. Ultimately, the reforms are designed to protect economies and promote stability.

Real estate professionals: New compliance obligations

Real estate professionals face significant changes under the new reforms, including:

• Enhanced customer due diligence
• Reporting suspicious transactions
• Maintaining detailed records

These changes aim to prevent property transactions from being exploited for illicit purposes. Compliance training and policy updates are essential for real estate professionals to remain compliant and protect their reputation.  Find out more

Conveyancers and dealers in precious metals & stones: What’s changing?

These sectors were previously outside the AML/CTF framework but now face new responsibilities, including:

• Implementing robust due diligence
• Reporting suspicious activity
• Keeping comprehensive transaction records

For conveyancers, this means being vigilant with property transactions. For dealers in precious assets, it means deeper scrutiny of customers and transactions. Find out more

Accountants, auditors & TCSPs: Expanded duties

Accountants and auditors must now:

• Conduct risk assessments
• Evaluate client activities
• Maintain detailed records
• Report suspicious transactions

Trust and company service providers (TCSPs) are also subject to enhanced transparency requirements. Adopting technology can streamline compliance and improve efficiency. Find out more

Legal professionals: Navigating new requirements

Lawyers and other legal professionals must:

• Conduct rigorous client due diligence
• Identify beneficial ownership
• Evaluate the purpose of legal transactions
• Maintain robust compliance policies

These changes protect legal services from abuse and enhance the sector’s credibility in combatting financial crime. Find out more

Key compliance requirements for Tranche 2 entities

Each sector has specific obligations, but the overarching requirements include:

• Comprehensive risk assessments
• Client due diligence protocols
• Reporting systems for suspicious transactions
• Detailed record-keeping procedures

Staying compliant strengthens transparency and boosts public trust.

The role of human resources & compliance officers

HR and compliance officers are instrumental in:

• Conducting ongoing staff training
• Updating internal policies
• Communicating changes clearly
• Monitoring organisational compliance

Together, they drive a culture of awareness and accountability.

Building a culture of compliance: Training & technology

A strong compliance culture starts with:

• Interactive, role-specific training
• Investment in compliance software
• Real-time monitoring and reporting tools

Technology can automate and simplify many compliance processes, reducing errors and saving time.

Risks of non-compliance and penalties

Failure to comply with Tranche 2 reforms can result in:

• Significant financial penalties
• Regulatory investigations
• Loss of reputation and client trust

It’s far more cost-effective to implement a compliance program than to deal with the fallout of non-compliance.

Steps to prepare for Tranche 2 reforms

To prepare, organisations should:

1. Conduct a full risk assessment
2. Update compliance policies and procedures
3. Train staff across departments
4. Implement technology solutions
5. Consult with legal and compliance experts

Being proactive now reduces risks later and demonstrates a commitment to lawful, ethical business operations.

AML/CTF Tranche 2 reforms represent a major evolution in financial compliance. These changes may be challenging, but they offer long-term benefits—strengthening businesses, protecting systems, and aligning with global standards.

By embracing reform today, organisations lay the groundwork for a more secure, transparent, and trusted future.