What is AML Tranche 2 in Australia?

AML Tranche 2 extends Australia's anti-money laundering and counter-terrorism financing (AML/CTF) laws to new professions including lawyers, accountants, real estate agents, conveyancers, and dealers in precious metals and stones. These businesses must comply with AUSTRAC obligations from 1 July 2026.

When do AML Tranche 2 obligations start?

AML/CTF obligations for Tranche 2 entities commence on 1 July 2026. Businesses must enrol with AUSTRAC by 29 July 2026 (28 days after obligations begin). Enrolment opened on 31 March 2026.

What are the penalties for not complying with AML Tranche 2?

Civil penalties can reach up to $33 million per breach for companies and $6.6 million per breach for individuals. Criminal penalties include up to 25 years imprisonment for proceeds of crime offences. Directors and compliance officers can face personal criminal liability.

Do I need to enrol with AUSTRAC if I run a small business?

If your business provides designated services such as legal, accounting, real estate, conveyancing, or precious metals dealing, you must enrol with AUSTRAC regardless of business size. AUSTRAC has released Program Starter Kits specifically designed for small, low-complexity businesses.

Does AML Tranche 2 affect online marketplaces or e-commerce sellers?

Standard e-commerce sellers and online marketplace operators are not directly captured by Tranche 2. The reforms target designated non-financial businesses and professions (DNFBPs) such as lawyers, accountants, and real estate agents. However, if your business also provides services in these categories, you may have obligations.

What customer due diligence is required under AML Tranche 2?

Tranche 2 entities must conduct initial and ongoing customer due diligence (CDD), which means verifying your customer's identity before providing designated services. You must also conduct ongoing monitoring of business relationships and keep records of these procedures for at least seven years.

Where can I get help preparing for AML Tranche 2 compliance?

AUSTRAC has released free Program Starter Kits designed for small businesses in newly regulated sectors. These kits help you build and implement an AML/CTF program. Visit austrac.gov.au/amlctf-reform for the latest guidance, toolkits, and sector-specific resources.

Business·April 13, 2026·8 min read

AML Tranche 2: What Muslim Business Owners in Australia Need to Know

Business compliance documents and paperwork on a desk

Australia's anti-money laundering laws are expanding. From 1 July 2026, lawyers, accountants, real estate agents, and other professionals must comply with new AUSTRAC obligations or face penalties of up to $33 million per breach.

Obligations commence 1 July 2026

Enrol with AUSTRAC by 29 July 2026. Enrolment is open now.

1 July

Obligations Start

~100K

New Businesses

$33M

Max Penalty

What Is AML Tranche 2 and Why Does It Matter?

Since 2006, Australia's Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Act has required banks, remitters, and gambling providers to verify customer identities, report suspicious transactions, and maintain compliance programs. These were known as "Tranche 1" entities. For nearly two decades, professions like law, accounting, and real estate were excluded from these requirements, even though they handle significant financial flows.

That changes on 1 July 2026. The AML/CTF Amendment Act 2024 brings these professions into the regulatory framework. Around 100,000 new businesses across Australia will need to enrol with AUSTRAC, verify their customers, report suspicious activity, and maintain compliance programs. AUSTRAC, the regulator, has signalled it will apply the same enforcement standards it used for banks and casinos.

Official Sources

AUSTRAC - AML/CTF Reform Department of Home Affairs - AML/CTF Amendment Act Overview AUSTRAC - Summary of Obligations for Tranche 2 Entities

Which Muslim-Owned Businesses Are Affected by AML Tranche 2?

Tranche 2 targets designated non-financial businesses and professions (DNFBPs). If your business provides any of the following services, you are captured by the new regulations regardless of business size.

Lawyers and Legal Practitioners

Solicitors, barristers, and law firms providing conveyancing, trust administration, or managing client funds through trust accounts.

Accountants

Accounting firms and practitioners providing financial or taxation advice, managing client money, or handling business structuring.

Real Estate Professionals

Real estate agents, property managers, buyer's agents, and property developers involved in buying, selling, or leasing real property.

Trust and Company Service Providers

Businesses that create, manage, or administer trusts, companies, or other legal structures on behalf of clients.

Dealers in Precious Metals and Stones

Businesses dealing in gold, silver, diamonds, and other precious metals or gemstones above designated thresholds.

Not Sure If You Are Affected?

AUSTRAC has published a free "Check if you may be regulated" tool on their website. Answer a few questions about your business to determine whether you have new obligations.

Support Muslim Businesses

Products from Muslim-owned sellers

Does AML Tranche 2 Affect E-Commerce Sellers and Marketplace Operators?

If you sell products online through platforms like Souq, Shopify, or your own website, Tranche 2 does not directly apply to you. The reforms target designated non-financial businesses and professions (DNFBPs): lawyers, accountants, real estate agents, and similar professional services. Standard retail and e-commerce operations are not classified as designated services under the Act.

However, there is an important caveat. If your business provides services that cross into regulated territory, you may have obligations. For example, if you run a real estate agency alongside your e-commerce business, or if you provide accounting or trust administration services to clients, those activities fall under Tranche 2. The obligations attach to the service, not the business structure.

Virtual Asset Service Providers (VASPs)

If your business involves cryptocurrency exchange, transfer, or custody, separate VASP obligations commenced from 31 March 2026 under the same reform package.

What Are the Key Obligations Under AML Tranche 2?

If your business is captured, you will need to meet these core requirements. Most are similar to what banks and financial institutions have followed since 2006. AUSTRAC provides free resources to help small businesses get started.

Core Obligations

Enrol with AUSTRAC by 29 July 2026
Conduct initial and ongoing customer due diligence (identity verification)
Report suspicious matters to AUSTRAC
Report cash transactions over $10,000
Maintain records for at least seven years
Develop and maintain an AML/CTF compliance program
Have your program independently reviewed every three years

What Happens If You Do Not Comply with AML Tranche 2?

AUSTRAC has a track record of significant enforcement. The regulator imposed a $1.3 billion penalty against Westpac in 2020 and a $450 million penalty against Crown Resorts in 2023 for AML/CTF failures. AUSTRAC has signalled it will apply the same enforcement standards to newly regulated Tranche 2 businesses.

Civil Penalties

Companies

Up to $33 million per breach

Individuals

Up to $6.6 million per breach

Criminal Penalties

Proceeds of Crime

Up to 25 years imprisonment

Personal Liability

Directors and compliance officers face personal criminal liability separate from corporate penalties

Enforcement is not theoretical

AUSTRAC can also suspend or cancel your registration, effectively preventing you from operating. The regulator has made clear that ignorance of the new obligations is not a defence.

How Should You Prepare for AML Tranche 2 Compliance?

Start with enrolment and work through these steps before 1 July 2026. AUSTRAC's free Starter Kits walk you through each stage. Most small businesses can handle the initial setup without external consultants.

Enrol with AUSTRAC

By 29 July 2026

Register your business on the AUSTRAC Online portal. You will need to provide key information about your business and personnel. Enrolment opened 31 March 2026 and must be completed by 29 July 2026.

Conduct a Risk Assessment

Before 1 July 2026

Identify and assess your business's money laundering, terrorism financing, and proliferation financing risks. Consider the types of customers you serve, the services you provide, and the jurisdictions you operate in.

Build Your AML/CTF Program

Before 1 July 2026

Develop policies and procedures to manage and mitigate the risks you identified. AUSTRAC's free Program Starter Kits are designed to help small businesses do this. Your program must include customer due diligence, transaction monitoring, and suspicious matter reporting procedures.

Implement Customer Due Diligence

From 1 July 2026

Set up processes to verify your customers' identities before providing designated services. This includes initial verification and ongoing monitoring. Keep records of all due diligence for at least seven years.

Report and Keep Records

Ongoing

Report suspicious matters to AUSTRAC within required timeframes, report cash transactions over $10,000, and maintain detailed records. Your AML/CTF program must be independently reviewed every three years.

AUSTRAC Preparation Guide

What Are the Key Dates for AML Tranche 2?

Important Dates

Enrolment Opens

31 March 2026

Obligations Commence

1 July 2026

Enrolment Deadline

29 July 2026

Free Resources

Program Starter Kits

Sector-specific kits for small businesses (real estate, legal, accounting, precious metals)

AUSTRAC Online

Enrolment portal and compliance management

Sector Guidance

austrac.gov.au/amlctf-reform

Frequently Asked Questions

Share This With Your Accountant or Solicitor

If you work with a Muslim accountant, solicitor, or real estate agent, they may not yet be aware of these new obligations. Share this guide so they can prepare before the 1 July deadline.

Visit AUSTRAC Reform Hub Check If You Are Regulated

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