From Exemption to Expectation: Anti-Money Laundering’s Professional Turn

Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) regime is currently undergoing its most significant transformation. Historically, AML/CTF obligations - such as ‘Know your client’ checks, internal training and compliance programs and reporting to AUSTRAC[1] - have only applied to entities which provided a limited set of ‘designated services’.

However, under new legislation[2] the regulatory net is being cast wider to include a new category of “Tranche 2” entities and a broader range of designated services. These reforms will extend AML/CTF obligations to include lawyers, accountants, conveyancers, real estate agents and trust and company service providers. These professions, long exempt from direct AML/CTF obligations, will be brought under AUSTRAC’s regulatory oversight from 1 July 2026.

This article provides an overview of key changes to the AML/CTF regime, core AML/CTF obligations and key dates which any Tranche 2 providers of designated services must be aware of in order to ensure that they properly comply with the new regime.

Why Professionals Are Now in Scope

Historically, AML/CTF obligations applied to a narrow group of entities such as financial institutions, remittance service providers and digital currency exchange providers. However, Australia’s AML/CTF regime is being overhauled to address long-standing regulatory “blind spots” that have allowed criminal networks to misuse professional services in Australia.

The recently tabled AML/CTF Rules[3] which complement the AML/CTF Act,[4] have finalised reforms designed to:

• Close loopholes that have enabled money laundering through a broad range of industries, including professional services;
• Modernise and streamline the AML/CTF framework for better usability and enforcement; and
• Bring Australia in line with global standards, particularly those set by the international AML/CTF watchdog.[5]

Tranche 2 Entities: Is your profession on the list?

Under the new framework, AUSTRAC has identified certain high-risk activities that require further regulation. These “designated services” include the following:

• Brokering the sale, purchase, or transfer of real estate on behalf of a buyer, seller, transferee or transferor in the course of carrying on a business.
• Managing or controlling client money, accounts, or assets as part of a transaction.
• Creating or restructuring companies, partnerships, trusts, or similar entities.
• Acting as or arranging for someone to act as a director, secretary, trustee, partner, or similar role.
• Providing a registered office, business address, or correspondence address for a client.

The newly regulated entities, referred to as “Tranche 2 Entities”, will include the following professionals, where they provide a designated service:

• lawyers;
• conveyancers;
• accountants;
• trust and company service providers; and
• real estate professionals.

Any providers of services which may be captured under the AML/CTF reforms should familiarise themselves with the full list of designated services as set out in the Amendment Act and, if necessary, obtain legal advice on whether or not they will be classified as a Tranche 2 entity.

Further guidance in relation to designated services and reporting entities can be found here.

Core AML/CTF obligations

From 1 July 2026, Tranche 2 Entities must comply with a suite of AML/CTF obligations, which include (but are not limited to):

• Enrolment with AUSTRAC: enrolling via AUSTRAC Online within 28 days of providing a designated service. For most, this means enrolling by 29 July 2026.
• AML/CTF Program: developing and maintaining a tailored AML/CTF program comprising:
• A risk assessment identifying money laundering and terrorism financing risks specific to your business.
• Policies, procedures, and controls to mitigate those risks.
• Governance and oversight, including appointing an AML/CTF compliance officer.
• Customer Due Diligence (CDD): conducting CDD as follows:
• Initially, before providing a designated service.
• Ongoing, throughout the client relationship.
• Enhanced CDD which includes additional investigation, where higher risks are identified (e.g. for politically exposed persons or complex structures).
• Reporting Obligations: reporting to AUSTRAC on the following:
• Suspicious matters where it is suspected on reasonable grounds that a person has given a false identity or that a matter is linked to criminal activity or the proceeds of crime.
• Threshold transactions involving cash transactions of A$10,000 or more.
• Cross-border movements into or out of Australia of physical currency or bearer negotiable instruments valued at A$10,000 or more.
• Annual compliance reports summarising compliance with AML/CTF obligations.
• Record Keeping: maintaining records related to AML/CTF programs, CDD, transactions, staff training and any audit results and retaining such records for at least seven years.

For Tranche 2 entities who are legal practitioners, it is important to note that the reforms preserve the doctrine of legal professional privilege. Lawyers will not be required to disclose information or documents that are reasonably believed to be privileged. AUSTRAC has introduced a dedicated form to assert privilege where applicable.

Key Dates for Compliance

Newly regulated Tranche 2 Entities should consider how they plan to comply with the AML/CTF regime in preparation for the regime’s commencement on 1 July 2026.

Key dates to be aware of include:

• October 2025: Core Guidance to be released by AUSTRAC.
• December 2025: Sector-specific guidance and a starter program kit for an AML/CTF program to be released by AUSTRAC.
• 31 March 2026: Enrolment with AUSTRAC will be available for Tranche 2 Entities that provide newly regulated designated services.
• 1 July 2026: AML/CTF obligations commence for Tranche 2 Entities that provide newly regulated designated services.
• 29 July 2026: The last date by which Tranche 2 Entities that provide newly regulated designated services may enrol with AUSTRAC.

Tranche 2 Entities and their advisers should monitor AUSTRAC’s website to remain up to date with the latest developments and guidance.

More information from Maddocks

For more information, contact Maddocks on (03) 9288 0555 and ask to speak to a member of the Commercial team.

What are the Cleardocs products available?

Cleardocs offer the following relevant products:

• Register a Company
• Change to Constitution
• Company Minutes & Resolutions Package
• Superannuation Trust (SMSF)
• Discretionary (Family) Trust
• Discretionary Trust - Excluded Beneficiaries
• SMSF Set Up + Register Corporate Trustee

Please read the Product Benefits, Product Information and Frequently Asked Legal Questions carefully and consider if it is appropriate in your circumstances before purchasing any Cleardocs product.

More Cleardocs information on related topics

• Major AML/CTF reforms proposed to bring lawyers, accountants and others within the regime
• Discretionary Trust Deeds For Family Trusts - Aren't They All The Same?
• A 2025/1 - Managed Investment Trusts: Restructures To Access The MIT Withholding Regime
• Financial Reporting And Audit: ASIC's Focus For FY26
• Update For SMSF Trustees: ATO Enforcement Actions For Non-Compliance

[1] Australian Transactions Reports and Analysis Centre (AUSTRAC) is Australis’s anti-money laundering and counter-terrorism financing regulator and financial intelligence unit.

[2]Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Amendment Act 2024 (Cth) (Amendment Act)

[3] Anti-Money Laundering and Counter-Terrorism Financing Rules 2025 (AML/CTF Rules).

[4] Anti-Money Laundering and Counter-Terrorism Financing 2006 Act (AML/CTF Act).

[5] The Financial Action Task Force sets international standards that aim to prevent global money laundering and terrorist financing.