From 31 March 2026, new AML/CTF rules will apply under Australia’s Tranche 2 reforms. By 1 July 2026, businesses that provide designated services must have an AML/CTF compliance program in place before providing those services to clients.
If your business provides designated services with an Australian geographical link, you may be classified as a reporting entity for AUSTRAC. Reporting entities have ongoing obligations, which include registering with AUSTRAC and conducting customer due diligence on clients.
Understanding whether your services are captured, and what compliance requires, is critical under the Tranche 2 reforms.
Tranche
2 Designated Services
Real Estate Services
From 1 July 2026, certain real estate related services will be captured as designated services under the AML/CTF regime. Real estate transactions are widely recognised as higher risk because property can be used to conceal, transfer, or integrate illicit funds.
Examples of real estate related designated services include:
Buyer’s or seller’s agent services – where a real estate agent negotiates and finalises the sale of residential property on behalf of a client.
Property development sales – where a developer sells house and land packages or off-the-plan apartments and receives deposits or other client funds.
Trust or escrow services – where a business holds deposits or other client funds in a trust or escrow account pending settlement of a property transaction.
Professional Services
From 1 July 2026, certain professional services will be captured as designated services under the AML/CTF regime, where they directly support or advance transactions. These services are regulated when the involvement of the professional materially facilitates the transaction, rather than providing general or incidental advice.
Examples of professional services that may constitute designated services include:
Real Estate Related Transactions
Property acquisition through a trust – where a lawyer establishes a trust structure and acts on the purchase of commercial property on behalf of the trustee
Planning or executing real estate transactions – where a lawyer prepares and executes a contract for sale under a power of attorney for a company acquiring property.
Transfer of real property – where a conveyancer prepares contracts for sale, conducts settlement and coordinates the transfer of title.
Company Formation, Structuring and Restructuring
Incorporation and structuring of entities – where a lawyer or accountant advises on structure and incorporates holding companies or subsidiaries to operate a business.
Pre sale or pre transaction restructures – where a lawyer or accountant undertakes a corporate restructure to separate assets and liabilities ahead of a sale or transaction.
Buying or selling a body corporate or legal arrangement – where a lawyer or accountant prepares documentation to transfer shares or interests in an entity, including asset or share sales of proprietary companies.
Trustee, Nominee and Director Services
Nominee arrangements – where a firm provides nominee shareholder or nominee director services.
Trustee services – where a corporate service provider acts as trustee of a trust holding client assets.
Trust Account and Funds Handling
Handling client funds to facilitate transactions – where a lawyer or accountant receives, holds, controls, or disburses client funds through a trust account to complete a transaction.
Escrow style arrangements – where a firm holds funds pending satisfaction of contractual or completion conditions.
Financing and Capital Raising
Arranging debt or equity financing – where a lawyer, accountant or adviser assists in structuring, negotiating, or coordinating debt or equity financing for a transaction.
Equity investment transactions – where a lawyer acts in relation to share issues or equity investments by incoming investors.
Mergers, Joint Ventures and Complex Transactions
Joint venture structuring – where a lawyer structures a joint venture between domestic or foreign parties and prepares transactional documentation.
Complex structuring or restructuring – where a lawyer or accountant establishes complex trust or corporate structures or restructures entities to facilitate a transaction.
Shelf Companies and Corporate Services
Sale of shelf companies – where a firm sells a ready formed company to a client for immediate use.
Registered office or principal place of business services – where a firm provides a registered address or principal place of business for a company.
What you will be required to do
If you fall within Tranche 2 you must introduce a
clear set of
compliance measures. These include:
Register with AUSTRAC before you provide any regulated services
Implement an AML/CTF Program that is tailored to the size and risk of your business
Verify client identity including beneficial owners and complete risk assessments
Monitor matters and transactions and escalate anything that appears suspicious
Maintain records of checks, decisions, reports, training and policies for the required period
These are now considered standard business practices for
regulated professionals.
How Flagship AML Helps
Flagship AML is built for small professional teams that must comply with AML/CTF
obligations without losing time to complexity. It turns confusing rules and paperwork
into a clear, guided process.
Flagship AML uses a simple, centralised dashboard to streamline AML/CTF compliance,
training, and record keeping, saving small businesses time and reducing ongoing
administrative effort.
The Tranche 2 AML/CTF reforms will apply to small firms and businesses that provide
designated services, not just large organisations.
For many businesses, understanding whether their services are captured, and what
compliance requires, is time consuming and confusing.
What we don't provide:
Client identification screening. We recommend using a service provider
such as Australia Post Digital ID.
We don't keep records of your generated KYC or risk assessment reports.
Once generated, it is your responsibility to download and save these files.
This ensures your client's data is not shared with third parties outside Australia.
We do not provide guidance on whether legal professional privilege may apply.
This is a decision for each law firm on a case by case basis.
We provide:
A comprehensive AML/CTF platform
Simple onboarding and sanctions screening
Risk assessment tools that guide practical decisions
Audit ready records stored securely in your dashboard
