Background
What is Tranche 2
and why does it matter?
Australia regulated banks and financial services in 2006 (Tranche 1) but left professional services unregulated — one of the last FATF member nations to do so.
Tranche 2 extends AML/CTF obligations to approximately 80,000–90,000 new "reporting entities" — law firms, accountants, real estate agents, precious metals dealers, TCSPs and VASPs.
Described as the most significant AML/CTF expansion in two decades, it brings Australia in line with FATF global standards and closes a decades-long regulatory gap.
Non-compliance carries severe AUSTRAC enforcement consequences including civil penalties, criminal prosecution and reputational damage — with enforcement beginning day one.
Key Numbers
Compliance Timeline
Key Dates & Milestones
AUSTRAC Finalises Core Guidance
AUSTRAC published core AML/CTF guidance documentation for newly regulated sectors.
Sector Starter Kits Released
Sector-specific guidance and Small Business Starter Kits released by AUSTRAC for law, accounting, real estate, DPMS, TCSPs and VASPs.
VASP Enrolment Opens
AUSTRAC enrolment window opens. Virtual Asset Service Provider (VASP) obligations commence.
VASP Enrolment Deadline
Final deadline for Virtual Asset Service Providers to enrol with AUSTRAC.
Tranche 2 Obligations Commence
All Tranche 2 AML/CTF obligations commence for law firms, accountants, real estate agents, DPMS and TCSPs. AUSTRAC enforcement begins.
Final Enrolment Deadline
Last date for all other Tranche 2 reporting entities to enrol with AUSTRAC.
The 7 Core Obligations
What every Tranche 2 reporting
entity must implement
Written AML/CTF Program
A written, risk-based program documenting how your business identifies, assesses, manages and mitigates ML/TF risks. Must be tailored to your specific business — AUSTRAC Starter Kits are a template, not a finished product. Requires regular review and updating.
KYCopilot SolutionAML/CTF Program Builder generates a complete, AUSTRAC-aligned program in under 30 minutes with guided risk-based templates.
arrow_forwardLearn moreCustomer Due Diligence
Standard CDD must be completed before providing any designated service. Requires collection and verification of KYC/KYB information, identification of beneficial owners (25%+ ownership or control), and risk-based customer profiling.
KYCopilot SolutionDigital CDD & Onboarding verifies customers in seconds using identity document scanning, liveness checks and ASIC-integrated company data.
arrow_forwardLearn moreOngoing Monitoring
Continuous monitoring throughout the business relationship — not just at onboarding. Must identify unusual or suspicious activity and update customer risk profiles when their circumstances change.
KYCopilot SolutionI2G™ provides perpetual PEP, sanctions and adverse media screening with instant alerts when a client's risk profile changes.
arrow_forwardLearn moreAUSTRAC Reporting
Suspicious Matter Reports (SMRs) within 24 hours (terrorism) or 3 business days (all other). Threshold Transaction Reports (TTRs) for cash transactions of AUD $10,000 or more. Annual Compliance Reports.
KYCopilot SolutionAUSTRAC Reporting Suite automates SMR drafting, TTR detection for $10,000+ cash, IFTI reporting and annual compliance report preparation.
arrow_forwardLearn moreRecord Keeping
All compliance records retained for a minimum of 7 years after the end of the business relationship. Must be stored securely with encryption, backup and access controls — retrievable and auditable on request by AUSTRAC.
KYCopilot SolutionSecure, encrypted record storage with 7-year retention, instant AUSTRAC-ready retrieval and full audit trails on every decision.
arrow_forwardLearn moreML/TF Risk Assessment
Formal, documented enterprise-wide ML/TF Risk Assessment covering customers, products/services, delivery channels and geographic exposure. Must be updated regularly. Independent review required at least every three years.
KYCopilot SolutionML/TF Risk Assessment Tool provides a documented, version-controlled enterprise risk assessment with built-in review scheduling.
arrow_forwardLearn moreGovernance & Training
Designated AML/CTF Compliance Officer at management level with sufficient seniority, authority and independence. Mandatory staff training and awareness program covering AML/CTF red flags, obligations and escalation procedures.
KYCopilot SolutionGovernance module includes compliance officer delegation framework, role-based training modules and documented training completion records.
arrow_forwardLearn moreTranche 2 Sectors
Is your business a
Tranche 2 reporting entity?
The test is service-based, not entity-based. A business is captured if it provides one or more “designated services” — regardless of firm size or primary practice focus.
Law Firms & Conveyancers
Captured when: Captured when providing real estate transactions, managing client money, creating trusts, acting as nominee director, providing registered office services.
Key Pain Points
Accountants & Tax Agents
Captured when: Captured when forming companies/trusts, managing client funds, providing tax advisory on ownership structures, or business advisory touching entity structures.
Key Pain Points
Real Estate Agents & Developers
Captured when: Captured when acting as agent in any purchase or sale of real property, or developers selling directly to buyers.
Key Pain Points
Dealers in Precious Metals & Stones
Captured when: Captured for cash transactions of AUD $10,000 or more (single or linked). Covers gold, diamonds, jewellery, watches and other high-value tangibles.
Key Pain Points
Trust & Company Service Providers
Captured when: Captured when forming companies/trusts, providing administration services, acting as nominee director/shareholder, or providing registered agent services.
Key Pain Points
Virtual Asset Service Providers
Captured when: Cryptocurrency exchanges and digital asset businesses. Obligations commence earlier — from 31 March 2026.
Key Pain Points
Ready to become
Tranche 2 compliant?
KYCopilot covers all seven Tranche 2 obligations in one platform. Start building your AML/CTF program today — it takes less than 30 minutes to get started.