The Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024 (the “AML Legislation”) is the most significant overhaul of Australia’s financial crime laws in nearly two decades.

We are currently in the final phase for implementation.

The reforms (often called “Tranche 2”) aim to close the “gatekeeper” loophole that previously allowed certain professions to facilitate large transactions without the same scrutiny as banks.

Who is affected?

From 1 July 2026, the following businesses (each, a “Tranche 2 Entity”) will become “reporting entities” under the AML Legislation, subject to AUSTRAC oversight:

• Lawyers and conveyancers, when handling client funds, property transfers, or setting up companies/trusts.
• Accountants and tax agents, when assisting in business sales, managing client assets, or creating legal structures.
• Real estate agents, including buyer’s agents and property developers (excludes residential property management/leasing).
• Trust and company service providers helping to form or manage legal entities for clients.
• Dealers in precious metals and stones, when transactions involve $10,000 or more in cash or virtual assets.

Core obligations.

As reporting entities under the AML Legislation, Tranche 2 Entities will have the following five primary obligations:

• Enrolment: Each Tranche 2 Entity must enrol with AUSTRAC between 31 March 2026 and 29 July 2026.

• AML/CTF program: Each Tranche 2 Entity must have a written, risk-based Anti Money Laundering / Counter Terrorism Financing program, tailored to its specific business. This can be a standalone, or a joint program, in case of entities that are part of a group. AML/CTF Programs must be proportionate to the risk inherent in the business of a Tranche 2 Entity, and there must be recorded evidence that the program is being complied with.

• KYC: Each Tranche 2 Entity must meet Know Your Client requirements, by verifying client identities, beneficial owners, and checking for Politically Exposed Persons (“PEPs”).

• Reporting: Each Tranche 2 Entity must report Suspicious Matters(“SMRs”) and cash transactions over $10,000(“TTRs”).

• Record keeping: Each Tranche 2 Entity must keep identity and transaction records for a period of 7 years.

Necessary changes to governance and policies.

The AML Legislation is centred on an outcomes-focused model. Tranche 2 Entities business will likely need to overhaul their operations in the following areas:

• Governance.
  • Board accountability: Senior management is accountable for the risk assessment and must actively oversee the effectiveness of the AML/CTF program.
  • AML/CTF Compliance Officer (“AMLCO”): Each Tranche 2 Entity must appoint an AMLCO. The AMLCO must be an Australian resident, at a management level, and have enough authority to challenge the business on compliance issues.

• Policies and Procedures.
  • Risk assessment: Each Tranche 2 Entity must conduct a formal assessment that identifies how money laundering, terrorism financing and proliferation financing (“PF”)(a new requirement regarding weapons of mass destruction) could happen in relation to its business.
  • Staged compliance for complex cases: Whilst the AML Legislation comes into force in July 2026, AUSTRAC has signalled a staged expectation for certain complex customer due diligence requirements, potentially extending the deadline on full technical compliance on legacy clients until 2029.
  • Employee due diligence: Each Tranche 2 Entity must implement HR policies including a vetting process to ensure that staff in certain sensitive roles are fit and proper and have not been recruited by criminals.

Technology and software.

Most Tranche 2 Entities will need to move away from manual compliance processes and will likely need to integrate identity verification software and sanction screening tools to automate checks against global watchlists.

Safe Harbour for small businesses.

AUSTRAC has released a starter kit for small, low risk businesses, who can use their template as a foundation.

Although this lightens the load of compliance to some extent, it does not exempt these types of Tranche 2 Entities from the need to perform a gap analysis to ensure that all required structural organisational changes and policies and procedures are in put place to be compliant with the AML Legislation, tailored to their specific business and client list.

Get in touch now to get Praetorium Law to help you design and implement your AML compliance program.

email: info@praetoriumlaw.com

Tel: 0410 752 667