AML Tranche 2 for Accounting Firms

From 1 July 2026, Australia’s AML/CTF regime expands to include accounting firms. 

For the first time, many accountants will be formally regulated under anti-money laundering legislation, shifting from professional judgement to a structured, documented compliance framework. 

Recently, we hosted a webinar with Malcolm from FeeSynergy to discuss the upcoming AML Tranche 2 reforms and what they mean for accounting firms. If you’d like a deeper walkthrough of the changes and practical considerations, you can watch the full webinar recording below. 

This article provides a high-level overview of the reforms, and the key areas firms should start thinking about now. 

It’s important to note that this is not compliance advice. Firms should review AUSTRAC’s official guidance, including the AUSTRAC Accounting Program Starter Kit, which provides detailed information on how to implement an AML/CTF program. 

What is Tranche 2?

The Australian Government passed the Tranche 2 AML reforms on 29 November 2024, extending the AML/CTF Act to “gatekeeper” professions such as accountants, lawyers and real estate agents. 

If your firm provides designated services, you must: 

• Enrol with AUSTRAC from 31 March 2026
• Be fully compliant from 1 July 2026 
  

The regime is risk-based. Smaller, lower-risk firms can implement proportionate controls, while firms involved in complex structuring or cross-border matters will require stronger safeguards. 

Is this the same as TPB Proof of Identity?

No.

TPB Proof of Identity (POI) rules were introduced to reduce tax fraud linked to identity theft. Tranche 2 AML obligations go much further. 

Under AML, firms must: 

• Conduct a documented ML/TF risk assessment
• Develop and maintain a written AML/CTF Program
• Appoint an AML Compliance Officer
• Implement customer due diligence (CDD)
• Monitor clients and lodge Suspicious Matter Reports (SMRs)
• Complete independent audits every three years 
  

This regime is overseen by AUSTRAC, Australia’s financial intelligence agency responsible for monitoring financial transactions and detecting money laundering, organised crime, and terrorism financing. 

Who is Captured?

You are captured if you provide certain designated services, including: 

• Buying or selling real property or businesses
• Managing client money or accounts
• Establishing companies, partnerships, or trusts
• Acting as (or arranging) directors, trustees, or nominee shareholders
• Organising capital contributions for entities 
  

These services are considered higher risk because they can conceal beneficial ownership, move funds or create opaque structures. 

If you provide even one designated service, you must enrol and comply. 

What do Firms Need to do?

1. Enrol with AUSTRAC

From 31 March 2026, affected firms must register as reporting entities. 

2. Complete a Risk Assessment 

Firms must document their exposure to money laundering and terrorism financing risk, considering factors such as: 

• Client types
• Services offered
• Geographic exposure
• Delivery channels (for example remote onboarding) 
  

3. Implement an AML/CTF Program 

Your program must outline: 

• Internal controls
• Risk mitigation processes
• Reporting procedures
• Governance arrangements 
  

A fit and proper AML Compliance Officer must also be appointed to oversee compliance. 

4. Conduct Customer Due Diligence (From 1 July 2026)

Before providing designated services, firms must: 

• Verify client identity
• Identify and verify beneficial owners (25%+)
• Understand the nature and purpose of the engagement 
  

Higher-risk clients require enhanced due diligence.

Ongoing Obligations

AML compliance is ongoing, not a one-off exercise. 

Firms must: 

• Monitor client relationships for suspicious activity
• Lodge Suspicious Matter Reports where required
• Retain records for seven years
• Provide ongoing staff training
• Submit annual declarations to AUSTRAC
• Undertake independent audits every three years 
  

How Should Firms Prepare?

With enrolment opening in March 2026, firms should already be considering the steps needed to prepare. 

A good starting point is to: 

• Review the AUSTRAC Accounting Program Starter Kit to understand the requirements
• Speak with your partners or advisors about how the reforms may affect your firm and the services you provide
• Evaluate the technology and partners that may help support your compliance processes 
  

Many firms will rely on specialist technology providers and advisors to implement these frameworks efficiently. Solutions such as identity verification platforms, AML compliance tools and digital document execution systems can form part of the broader compliance ecosystem. 

FuseSign works with a number of partners in this space, including companies like BGL and FeeSynergy, who support firms implementing AML processes and technology. 

Final Word

Tranche 2 AML reforms represent a significant shift for the accounting profession. 

While the changes may seem complex, firms that start early - reviewing guidance, assessing their risk exposure, and planning their compliance approach - will be in a much stronger position as the 2026 deadlines approach.