With Tranche 2 AML/CTF reforms on the horizon, many legal and property professionals are seeking clarity on what compliance will look like in practice. At the centre of these reforms is AUSTRAC, Australia’s anti-money laundering and counter-terrorism financing regulator. AUSTRAC’s role is to detect, deter and disrupt serious financial crime by setting and enforcing AML/CTF obligations across regulated industries.
To help firms prepare, AUSTRAC has released its AML/CTF Starter Kits, which guide entities through their obligations. These kits are very comprehensive but can be consolidated into 5 key obligations; guiding firms on how to enrol, assess risk, onboard staff and customers, report to AUSTRAC, and maintain records.
Importantly, AUSTRAC has been clear that these reforms are about lifting capability, not catching firms out. As Brendan Thomas, CEO of AUSTRAC, explained in an interview with Australian Conveyancer:
“We expect people to put forward their best effort in complying with the law. Let me be clear – we will not penalise a business that is unknowingly exploited to launder money. We’re focused on helping entities build capability. If you’re genuinely trying to do the right thing, you will not be on our radar.”
In alignment with this approach, InfoTrack and Grant Thornton have formed a national collaboration focused on education, practical guidance and readiness. Together, we are helping Tranche 2 entities understand their obligations and employ the solutions they can use to become compliant.
Below, we outline the five key obligations and what each one means for your firm.
The first obligation is formal enrolment with AUSTRAC as a reporting entity. This confirms that your firm is captured under the AML/CTF regime and allows AUSTRAC to communicate directly with you about obligations, updates and reporting requirements.
Enrolment is more than a one-off administrative task. Firms must ensure their details remain accurate and up to date, with records retained as evidence of compliance. Getting this step right sets the foundation for every obligation that follows.
Once enrolled, firms must establish their internal AML/CTF framework. This includes assessing the risks specific to your business, documenting how those risks are managed, and maintaining a written AML/CTF program that covers governance, controls and procedures.
Staff also play a critical role. Firms are required to conduct personnel due diligence and provide ongoing AML/CTF training, so everyone understands their responsibilities and know how to identify and escalate potential risks. Consistent training and clear accountability are essential to embedding compliance into everyday operations.
Customer onboarding is where AML/CTF compliance becomes operational. Firms must identify and verify their customers, understand the nature and purpose of the matter, and assess the level of money laundering or terrorism financing risk each customer presents.
This includes conducting verification of identity checks, screening for politically exposed persons (PEPs), sanctions and adverse media, and applying enhanced due diligence where higher risk is identified. Customer risk assessments are not static and must be revisited as matters progress and circumstances change.
Certain events must be reported to AUSTRAC within strict timeframes. These include Suspicious Matter Reports and Transaction Threshold Reports, among others.
Having clear internal processes helps ensure reports are prepared efficiently, consistently, and in line with AUSTRAC requirements. Keeping a record of what was reported, when, and by whom also supports audit readiness and provides a reliable reference for compliance
Record keeping underpins every AML/CTF obligation. Firms are required to retain records relating to enrolment, risk assessments, AML/CTF programs, customer due diligence, training and reporting for a minimum of seven years.
Clear, centralised and well-organised records ensure your firm can demonstrate compliance at any time. Strong record keeping also supports audit readiness and reduces the risk of gaps, inconsistencies or missed obligations.
To support firms navigating these changes, InfoTrack, together with Grant Thornton, is delivering a national program to educate Tranche 2 entities and provide practical guidance from day one.
Lee Bailie, InfoTrack’s Chief Operating Officer and national AML project sponsor, said the broader impact of money laundering on the community can no longer be ignored.
“Money laundering has helped drive up property prices. These reforms exist to protect the community, and this collaboration gives professionals the tools to stop criminal funds entering the market and ensure Australians are not competing against illicit money.”
Richard Storey, Partner, Risk Consulting at Grant Thornton, said Australia now has an opportunity to lead globally.
“Australia has lacked transparency in property purchases, and criminals have taken advantage. With clear guidance from day one, we can build a framework that is far harder for criminals to exploit and prevent illicit funds from entering the Australian financial system.”
Together, this program aims to equip professionals with the knowledge and tools they need to implement Tranche 2 obligations confidently and effectively from the very start.
As part of this collaboration, InfoTrack are taking this guidance on the road. Our national Ready-Set-Go AML/CTF Roadshows are designed to help legal and property professionals understand the AUSTRAC Starter Kits, break down each obligation, and see how compliance can be implemented in a practical, manageable way.
If you are preparing for Tranche 2, this is your opportunity to gain clarity, ask questions and take the next step towards confident compliance, so register your attendance today.
