Anti-Money Laundering (AML) Law Changes in Australia
What Accountants, Lawyers and Finance Professionals Need to Know Before 1 July 2026
Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) framework is entering its most significant expansion in more than 20 years — and the practical impact will extend well beyond banks and financial institutions.
If you’re an accountant, lawyer, conveyancer, finance broker, financial planner, or work anywhere near property transactions, wealth structuring or client funds, these changes matter. And even if your own practice is not ultimately captured, many of your clients will be, which means you still need to understand what is coming.
Under AUSTRAC’s published reform timetable, AML/CTF obligations will expand from 1 July 2026 to cover a large group of professional services — commonly referred to as “Tranche 2 entities.” For many practices, this will mean becoming a reporting entity for the first time, with formal compliance obligations and regulatory oversight.
Banks are already moving in this direction. For many people, this has shown up as a blunt on-screen prompt when logging into online banking — a multiple-choice question asking where income or funds are generated, often with little explanation or context. This is not random, and it is not overreach. It is an early signal of where the broader regulatory environment is heading.
What’s Changing — and Why Now?
Until now, Australia’s AML/CTF regime has focused largely on banks, casinos, remittance providers and similar institutions. But regulators globally have long recognised that financial crime frequently passes through trusted professional advisers before funds ever reach a bank.
AUSTRAC has already begun directly contacting businesses in newly regulated sectors to alert them to the upcoming changes. This outreach is designed to help practices understand their obligations early — and signals that these reforms are moving from policy into active implementation.
Property transactions, trust and company structures, business sales and complex wealth arrangements can all create risk if left unchecked.
These reforms follow AUSTRAC’s long-signalled Tranche 2 expansion of the AML/CTF Act, aligning Australia with international standards set by the Financial Action Task Force (FATF). In truth, Australia is one of the last comparable jurisdictions to extend AML regulation to professions such as accounting, law and real estate.
The approach is not a blanket one. It is deliberately risk-based — but it will still capture a very large number of businesses.
Who Is Directly Regulated?
From 1 July 2026, AML/CTF obligations will apply to businesses providing certain high-risk services, including many within:
Accounting and tax advisory
Legal services and conveyancing
Real estate (including buyer’s agents)
Finance and mortgage broking
Financial planning and investment services
Trust and company service provision
Dealers in precious metals, stones and other high-value goods
These businesses may become reporting entities under the AML/CTF Act — but only if they provide what the legislation defines as designated services.
-
Typical Fees for Common Services Report
Price range: $198 through $396 incl. GST This product has multiple variants. The options may be chosen on the product page
Who Is Actually Captured? Understanding “Designated Services”
A critical clarification: not every accountant, lawyer or broker is automatically regulated.
The regime is service-based, not title-based. You are only captured if your practice provides one or more designated services with an Australian nexus — services considered higher risk for money laundering or terrorism financing.
Common examples include:
Assisting clients with the purchase or sale of real property or businesses
Establishing, managing or administering trusts, companies or other legal entities
Providing corporate trustee, nominee or director services
Handling or directing client funds, including trust account activity that could enable layering or concealment
Facilitating significant financial or investment transactions
Many pure advisory, litigation-only, or lower-risk practices may fall outside the regime altogether.
AUSTRAC provides a free online “Check if you may be regulated” tool, which is the most practical starting point for assessing your exposure based on the services you actually provide.
Who Else Is Affected — Even If They’re Not Regulated
While these reforms legally apply to professional service providers, their impact extends much further.
Clients who engage accountants, lawyers, brokers or property professionals should expect increased scrutiny around:
Where money comes from
How wealth has been accumulated
How structures are used
How transactions are funded
This affects individuals and businesses who:
Buy or sell property
Establish trusts or company structures
Move large sums of money
Operate cash-intensive or high-value businesses
Invest domestically or internationally
In practical terms, even if your client is not regulated, they will feel the effects of regulation through you. That makes it essential that advisers understand the rules well enough to explain them calmly and clearly — before frustration or mistrust arises.
Key Dates - What Matters and When
To avoid confusion, the timing is as follows:
31 March 2026
AUSTRAC opens enrolment systems and releases further sector-specific guidance.1 July 2026
AML/CTF obligations commence for Tranche 2 entities.Within 28 days of first providing a designated service
Businesses must enrol with AUSTRAC.
For many existing practices, this will effectively mean by late July 2026.
Once you provide a designated service, obligations attach. There is no grace period beyond enrolment requirements.
Enforceable by AUSTRAC
Once captured, AUSTRAC becomes your regulator.
Reporting entities will be required to:
Enrol with AUSTRAC
Maintain a documented, risk-based AML/CTF program
Conduct customer due diligence (CDD) and ongoing monitoring
Appoint a senior AML/CTF compliance officer
Report suspicious matters and certain transactions
Retain records for at least seven years
AUSTRAC has indicated its initial focus will be on whether businesses are making genuine, documented efforts to comply. Perfection is not expected immediately — but inaction will not be acceptable.
Why This Will Land Harder Than Many Expect
Professional services act as gatekeepers earlier in the transaction chain than many firms realise — often well before funds reach a bank.
Trust and discretion are central to professional practice. When layered with complex structures or high-value transactions, that trust can also create opportunity for misuse if controls are absent.
Banks have operated under this scrutiny for years. That same line of questioning is now flowing outward — and clients will increasingly expect advisers to ask the same questions they are already being asked elsewhere.
Practices that are unprepared risk not only regulatory exposure, but client delays, confusion and reputational damage.
Practical Next Steps — What to Do Now
With AUSTRAC’s sector-specific guidance and starter AML/CTF program kits expected from late January 2026, the next 6–12 months should be used deliberately. Here is a a sensible roadmap to ensure compliance:
✔️ Assess your exposure
Use AUSTRAC’s checker tool to confirm whether you provide designated services.
✔️ Understand your risk profile
Map money laundering and terrorism financing risks based on your clients, services and transaction types.
✔️ Prepare your AML/CTF program early
Risk-based programs take time. Starter kits will assist smaller practices, but drafting should not be left until June.
✔️ Appoint a compliance officer
This should be a senior person with authority and accountability.
✔️ Review client onboarding and CDD processes
Document what you do today and identify where enhancements will be required.
✔️ Engage with software and technology providers
Automation, screening and record-keeping tools can make compliance far more manageable.
✔️ Stay informed
Monitor AUSTRAC’s AML/CTF reform updates and guidance.
The Bottom Line
These reforms are not about ticking a few extra boxes or updating a policy document.
For many practices, they will mean more work.
There will be new questions to ask, more information to document, and decisions to make about how much risk you are prepared to carry. Client onboarding will take longer. Some long-standing clients will push back. Internal processes that have “worked well enough” for years will need to be tightened.
That is simply the reality of being brought into a regulated framework that you have not previously sat inside.
What these reforms represent is a structural shift in how professional practices manage client risk, transactions and regulatory responsibility — and that shift will require time, attention and leadership.
Firms that start early and approach this methodically — without panic, but without delay — will absorb the change far more smoothly. They will have time to educate staff, set expectations with clients and embed processes that actually work in practice.
Those that leave it until the last minute will find themselves scrambling, reacting to client frustration and trying to retrofit compliance under pressure.
Whether you run a boutique practice or a larger firm, this is not something you can ignore or delegate away at the eleventh hour.
Preparation does not eliminate the work — but it does prevent the chaos.
And in this case, preparation really does beat panic — every time.
Written by Michelle Knights
Michelle advises professional services firms across Australia on practice risk, governance and regulatory readiness, working closely with accounting, legal and financial services businesses navigating structural and compliance change.
Want to know more? Book a 15-minute call with Michelle Knights and discover how she can help your practice.
Frequently Asked Questions: Anti-Money Laundering (AML) Changes in Australia
No. The expanded anti-money laundering and counter-terrorism financing (AML/CTF) regime does not automatically apply to everyone in these professions. The obligations are service-based, not profession-based.
Only businesses that provide one or more designated services — activities considered higher risk for money laundering or terrorism financing — will be captured. Many practices that offer purely advisory, litigation-only, or low-risk services may fall outside the regime entirely.
Each practice must assess its actual services, rather than relying on job titles or assumptions. AUSTRAC provides a free “Check if you may be regulated” tool specifically for this purpose.
Designated services are specific activities defined under the AML/CTF Act that are considered higher risk for misuse of financial systems. In practical terms, these often include services that involve structuring, moving, controlling or legitimising wealth.
Common examples include assisting with property or business purchases or sales, establishing or administering trusts or companies, handling or directing client funds (including through trust accounts), providing corporate trustee or nominee services, or facilitating significant financial or investment transactions.
Importantly, it is the nature of the service, not the size of the firm, that determines whether AML obligations apply.
Possibly. Handling client money is not the only trigger for AML/CTF obligations.
Many designated services relate to structuring and facilitation, not direct cash handling. For example, setting up trusts or companies, advising on ownership arrangements, or acting as an intermediary in transactions can still expose a practice to money laundering risk, even if funds never pass through the firm’s accounts.
This is why AUSTRAC recommends assessing services holistically rather than focusing only on whether client money is received.
If your practice is captured, AUSTRAC becomes your regulator. Failing to meet AML/CTF obligations can lead to enforcement action, including civil penalties, enforceable undertakings, or other regulatory consequences.
AUSTRAC has indicated that, particularly in the early stages of Tranche 2 implementation, it will focus on whether businesses are making genuine, documented efforts to comply. However, ignoring obligations, failing to assess risk, or not putting systems in place will not be viewed favourably.
Early preparation and clear documentation are the best protections.
Clients themselves are not regulated under the AML/CTF regime. However, they will feel the impact indirectly.
Clients should expect to be asked more detailed questions about where their money comes from, how wealth has been accumulated, and how transactions are funded. This may feel intrusive if it is unexpected, particularly for long-standing relationships.
Professional advisers play a key role in explaining why these questions are being asked and setting expectations early to avoid confusion or frustration.
The first step is to determine whether your services are captured by the regime. AUSTRAC’s free “Check if you may be regulated” tool is the most practical starting point.
If your practice is likely to be captured, the next steps include mapping your money laundering and terrorism financing risks, appointing a compliance officer, and beginning work on a documented, risk-based AML/CTF program well ahead of the 1 July 2026 commencement date.
Starting early reduces pressure, cost and disruption later.
The free monthly newsletter the industry waits for.
Sign up for our essential MAP Memo newsletter to stay updated on upcoming speaking engagements and events.
Each month you’ll receive:
- News of current trends and industry insights from Michelle Knights
- Crucial insights from our reports and presentations
- Calendar of events
