Frequently asked questions.

Tranche 2 refers to the major reform of Australia’s Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) regime. It extends AML/CTF obligations to “tranche 2 entities” — sectors that were originally excluded when the AML/CTF Act 2006 was enacted. These reforms bring Australia into line with international standards set by the Financial Action Task Force (FATF) and mean that tens of thousands of new businesses will need to comply with customer identification, screening, record-keeping, and reporting obligations from 1 July 2026.

The new obligations apply to real estate agents, accountants, lawyers and conveyancers, trust and company service providers (TCSPs), and dealers in precious metals and stones. AUSTRAC estimates this covers approximately 55,000 businesses across Australia. If your profession involves facilitating transactions, managing client funds, or creating legal structures, you are likely captured under Tranche 2.

Penalties under the AML/CTF Act are significant. Individuals face penalties of up to $6.26 million, while bodies corporate can face penalties of up to $31.3 million. AUSTRAC can also issue infringement notices, accept enforceable undertakings, and seek civil penalties through the Federal Court. Beyond financial penalties, non-compliance can result in reputational damage and loss of professional licences.

Tranche 2 obligations commence on 1 July 2026. AUSTRAC enrolment for new reporting entities opens in March 2026. We strongly recommend beginning your compliance preparation now, as building a compliant AML/CTF program, training staff, and establishing screening processes takes time.