Key Objectives
The reforms aim to:
Extend the AML/CTF Regime - Include higher-risk services from real estate professionals, lawyers, accountants, trust and company service providers, and dealers in precious stones and metals
Improve Effectiveness - Make the regime simpler and clearer for businesses to comply with
Modernise the Regime - Reflect changing business structures, technologies, and illicit financing methods
Increase Oversight - Require businesses to appropriately manage and mitigate money laundering and terrorism financing risks
Enhance Customer Due Diligence - Redesign obligations to better identify and manage risks
Addressing Identified Gaps
The Financial Action Task Force (FATF) identified professional service providers as a significant vulnerability in Australia's framework. While banks have been regulated since 2006, professionals facilitating similar high-value transactions remained largely unregulated from an AML/CTF perspective.
How Criminals Exploit Professional Services
Professional service providers operate at the critical junction where criminal proceeds enter the legitimate economy:
Lawyers - Structure complex transactions, establish trusts with obscure ownership, hold client funds
Accountants - Provide legitimacy to suspicious arrangements, conceal transaction nature
Real estate agents - Facilitate high-value property transactions converting illicit cash to assets
Trust and company service providers - Create structures obscuring beneficial ownership
Dealers in precious stones and metals - Enable transactions in high-value, portable assets easily converted to cash
Without proper controls, these professionals can unwittingly facilitate money laundering while believing they serve legitimate client needs.
The Role of the AML/CTF Compliance Officer (AMLCO)
A cornerstone of the reforms is the requirement to appoint an AML/CTF Compliance Officer (AMLCO) - a senior individual with independence and authority to oversee your compliance program, report suspicious matters to AUSTRAC, and provide direct accountability to leadership.
Meeting International Standards
FATF standards require these professions to have AML/CTF obligations. Implementing Tranche 2 fulfils Australia's international commitments, maintains our reputation for strong financial crime controls, and ensures Australian businesses operate effectively in international markets.
Creating a Level Playing Field
The reforms ensure businesses handling similar risks face consistent obligations. Previously, banks conducting property transactions faced comprehensive AML/CTF requirements while real estate agents facilitating identical transactions did not—creating exploitable gaps.
Implementation Timeline
Full compliance obligations commence 1 July 2026. Starting preparation now allows progressive implementation of risk assessments, policy development, independent review planning, staff training, and customer due diligence processes rather than facing operational disruption closer to the deadline.
Disclaimer: This document provides general information and is not legal advice. Consult legal advisors and AUSTRAC guidance when developing your compliance framework.
Visit: www.austrac.gov.aurac.gov.au