AUSTRAC opens enrolments but are Tranche 2 entities ready?

The article is relevant to members in Australia and was current at the time of publication.

Enrolments for Tranche 2 entities under the broadened anti-money laundering and counter-terrorism financing (AML/CTF) framework opened on 31 March, marking a key step in the government’s push to strengthen regulatory scrutiny of professional services. Yet concerns remain that some firms are already behind.

“Momentum is building, but equally the deadline is fast approaching, so new reporting entities who have not determined whether they are caught up in the new regime, or who haven’t got their heads around their new obligations or decided who will manage them, are putting their firms at risk,” says Neville Birthisel, FCPA Advisor, Regulations & Standards at CPA Australia.

Stakes too high to risk rushing

Tranche 2 entities intending to provide designated services from 1 July 2026 must have their AML/CTF program in place by 30 June 2026, be ready to fulfill their obligations from 1 July 2026, and enrol with the Australian Transaction Reports and Analysis Centre (AUSTRAC) by 29 July 2026.

AUSTRAC estimates about 80,000 reporting entities will fall within scope. For accounting firms, the implications are all too clear. Those that move early are likely to absorb the changes, minimising disruption; those that delay, risk reputational harm and operational strain, and potentially, AUSTRAC penalties.

If you are a Tranche 2 entity, by now you should already have:

1. determined whether your firm falls under the AML/CTF regime
2. appointed a compliance officer, senior manager and governing body with a clear understanding of the obligations and liabilities of each role (noting that in sole practitioners or small firms, some or all of these roles may be filled by the same individual)
3. decided whether the AML/CTF obligations will be managed in-house or be outsourced
4. reviewed current client onboarding and internal compliance systems to identify where they can be adapted to meet AML/CTF obligations
5. considered off-boarding “dodgy” clients who may elevate risk or complicate compliance
6. engaged with AUSTRAC’s website and program starter kits to understand requirements and practical steps

Other useful tips

Use the starter kit
The AUSTRAC starter kits offers a clear compliance pathway, including forms to onboard new clients, appoint compliance officers and conduct risk assessments.

“Even if you outsource some or all obligations, the kit will enable an educated conversation with your external provider rather than blindly following their recommendations,” Birthisel says.

Review your APEs
The obligation for qualified accountants to have an effective quality management system, with sound onboarding processes and a focus on risk management, means many firms may not be starting from scratch.

“Those members who are already engaged with their obligations under the APESB standards are significantly down the track. Your client onboarding process should already be robust. Meeting AML/CTF may only require a few tweaks rather than starting from scratch,” Birthisel says.

Understand Customer Due Diligence
Customer Due Diligence is a core requirement. Firms are not required to redo onboarding for existing clients unless their risk profile changes or they request a new designated service.

“Don’t panic about re-identifying hundreds of existing clients,” Birthisel says. “The rules allow for reasonable exceptions.”

Choose providers wisely
AML/CTF has, for several years, been a fact of life in many jurisdictions, creating a crowded market of external providers and software solutions.

“Entities in Australia are being inundated by providers flogging their wares,” Birthisel says. “Be diligent about who you pick.”

Reality catching up
Take-up of AML/CTF guidance has increased since December. CPA Australia roadshows have sold out and a recent podcast drew 500 listeners overnight.

Even so, firms that delay preparation risk being forced into rushed decisions or unsuitable provider arrangements.

“If you haven’t established if you’re in or out, do it now. Don’t wait until tomorrow. Go on the AUSTRAC or CPA Australia website and determine that immediately,” Birthisel says.

“It’s not going to go away. It’s not going to change. You’re not going to be exempted. The sooner and the more work you can do now, the easier life is going to be later.”

Do not bury your head in the sand
If firms fail to comply, AUSTRAC can enforce compliance or impose penalties.

“It’s akin to not wearing your seatbelt,” Birthisel says. “You might get away with it for a while, but sooner or later, you’ll get caught.”