Preparing for Tranche 2 requires proactive steps by affected businesses. Understanding the new regulations is essential, but knowing where to start — and in what order — is equally important. Here is a practical roadmap for achieving compliance before the 1 July 2026 deadline.
Step 1: Determine If You Are In Scope
If you are unsure, read Understanding AUSTRAC and AML Tranche 2 for a complete overview of the regulatory framework.
Not every business in the designated professions is automatically regulated. The key question is: do you provide a "designated service" as defined by the AML/CTF Act? Common designated services include:
- Buying or selling real property on behalf of a client
- Managing client money or accounts
- Forming companies, trusts, or other legal arrangements
- Providing a registered office or nominee services
- Conducting conveyancing transactions
If you provide any of these services, you are likely a reporting entity and must enrol with AUSTRAC by 29 June 2026.
Step 2: Conduct Your ML/TF Risk Assessment
This is your first substantive compliance task and must be completed before you can finalise your AML/CTF program. Assess risks across all four dimensions: services, customers, channels, and countries. Document the assessment methodology, findings, and any residual risk after controls are applied.
Step 3: Develop Your AML/CTF Program
Based on your risk assessment, create tailored policies and procedures that address:
- Governance — appoint your AML/CTF Compliance Officer (AMLCO) and define oversight responsibilities
- CDD procedures — establish verification standards for individuals, companies, and trusts
- Ongoing monitoring — define how you will monitor customer transactions and review risk profiles
- SMR procedures — document the internal escalation and reporting process
- Record keeping — specify what records are kept, for how long, and in what format
- Staff training — create a training program with role-specific content
- Independent review — schedule periodic independent audits of the program
Step 4: Enrol with AUSTRAC
The enrolment deadline for Tranche 2 entities is 29 June 2026. Enrolment is completed online through AUSTRAC Online. You will need:
- Your ABN and business details
- Your AMLCO's details (must be appointed before enrolment)
- Details of your designated services and industry sector
- An estimate of transaction volumes
Step 5: Implement Technology Solutions
Manual compliance processes are difficult to scale and hard to audit. Investing in compliance technology before 1 July ensures you are operational from day one:
- Deploy KYC/KYB identity verification tools for automated CDD
- Implement PEP and sanctions screening with real-time database updates
- Set up ongoing monitoring and adverse media alerts
- Ensure audit trail generation is automated
Step 6: Train Your Staff
Every staff member who interacts with clients or handles transactions must understand their AML obligations. Training should be completed before 1 July and refreshed regularly. Document all training sessions.
Step 7: Test Your Program
Before the deadline, run test scenarios through your AML program. Can your team:
- Complete a CDD check on a new client within a reasonable timeframe?
- Identify a PEP in your customer base?
- Recognise a suspicious transaction and escalate it correctly?
- Generate an audit-ready compliance report?
The Clock Is Ticking
With 1 July 2026 approaching, businesses that have not started their compliance preparations face significant risk. Penalties for non-compliance reach A$6.6 million for individuals and A$33 million per contravention for corporates. More importantly, non-compliance threatens your ability to provide services — you cannot lawfully provide a designated service without an AML/CTF program in place.
Start today. The steps are clear, and the tools exist to help Australian businesses meet their Tranche 2 obligations efficiently and confidently.