What Australia’s new AML/CTF reforms (from 1 July 2026) mean for your business?
- ACME H & L Legal
- Mar 19
- 4 min read
Updated: 6 days ago
Australia is expanding its anti‑money laundering and counter‑terrorism financing (AML/CTF) regime. From 1 July 2026, new services and entities, commonly referred to as “tranche 2”, will come under the regulation of AUSTRAC. While many obligations fall on advisers, the most practical impact is often felt by clients through more structured onboarding, additional verification requests, and potential impacts on transaction timelines.
At a high level, the reforms are intended to strengthen and modernise Australia’s framework by expanding coverage to additional higher‑risk services (including tranche 2), updating regulation for digital/virtual assets and payment technology, and simplifying aspects of the regime to support compliance while meeting international standards.
On this page
Quick timeline:
- From 31 March 2026: tranche 2 entities can enrol with AUSTRAC.
- From 1 July 2026: tranche 2 obligations apply. AUSTRAC notes tranche 2
includes the legal and accounting professions, real estate and jeweller industries.
What will change in practice?
AUSTRAC has indicated a focus on effective management of ML/TF/PF risks and “quality reporting” as the reforms commence, which means compliance processes will be more structured and more consistent across matters.
1) More structured onboarding (KYC / CDD)
In practice, you should expect requests for information earlier and more routinely than you may be used to. In many cases, advisers will not be able to commence work or progress key steps until required information is provided and verified. This is likely to be the most noticeable change for many clients.
Typically, this will include information about:
who you are (identity verification);
who owns or controls the entity (if you are acting through a company, trust or other structure); and
what the matter involves, including the purpose of the transaction.
2) Ongoing monitoring and follow-up questions
Even after onboarding, advisers may need to re‑check details or ask fresh questions if a matter evolves particularly where patterns shift (for example, a new funding source, unusual urgency, or late changes to parties or payment directions).
How your transactions may be affected?
Where delays are most likely
Matters that traditionally move quickly may slow down if verification steps are triggered late or information is incomplete, for example:
property deals (pre‑exchange, pre‑settlement, trust money flows);
entity formations / restructures (beneficial ownership and control mapping); and
transactions involving third‑party payments or complex ownership chains.
Practical “friction points” to plan for:
Stage | What you may be asked for | Why it matters |
Start of engagement | IDs, ownership/control details, basic purpose of engagement | Providers need enough information to understand ML/TF risk and meet onboarding requirements. |
Funding stage | Evidence/explanation of source of funds | Helps advisers become comfortable handling or facilitating funds as part of the matter. |
During the matter | Clarifications if instructions change | Ongoing risk management expectations may require updates and re‑verification. |
Suspicious matter reporting and “tipping off”
Under the AML/CTF regime, if an adviser forms a suspicion that a person or transaction may be linked to criminal activity, they may be required to lodge a Suspicious Matter Report (SMR) with AUSTRAC. AUSTRAC states the timing is strict: within 24 hours for suspected terrorism financing, and within 3 business days for other suspicious matters (including suspected money laundering).
In simple terms, this means advisers are generally not allowed to tell a client that a report has been made or sometimes even that a suspicion has been formed where doing so could prejudice an investigation.
What you should be doing now?
Although tranche 2 obligations do not formally commence until 1 July 2026, you can reduce delays (and often cost) by preparing a basic “CDD‑ready” pack in advance.
At a minimum, consider keeping the following readily available:
Current corporate records – recent company extract, directors/secretaries, and up‑to‑date ownership/share register;
Ownership and control overview – a simple organisational chart identifying controllers and beneficial owners (especially for layered groups);
Identification documents – current ID for key individuals, ready to provide promptly; and
Source of funds information – documents showing where transaction funds are coming from (for example, savings, sale proceeds or financing arrangements).
Process upgrades (high leverage for repeat transactors)
Build a standard internal intake form so you can answer AML questions consistently across lawyers/accountants/real estate professionals.
Allow extra lead time in transaction plans for onboarding—don’t leave verification to the day before exchange/settlement.
How we help clients navigate these changes?
At ACME H & L Legal, we advise on commercial property and cross-border investment matters where AML/CTF requirements are increasingly part of the transaction process. Our Principal Solicitor, Cecilia Ho, brings close to 30 years’ experience acting for investors and developers across Australia and the Asia-Pacific.
Our approach is to address these requirements early, as part of the transaction itself. We assist clients in putting the necessary information and documentation in place from the outset, and work through any structuring or due diligence issues as they arise. The focus is on keeping matters progressing smoothly and avoiding delays at critical stages.
More official resources
AUSTRAC AML/CTF Reforms: https://www.austrac.gov.au/amlctf-reform/about-reforms#Key%20changes%20under%20the%20laws
AUSTRAC explainer: https://www.youtube.com/watch?v=r5FrN8Bw_rs
AUSTRAC webinar: https://www.youtube.com/watch?v=NemnR9N2_BE
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