Tranche 2 Entities298 days until deadline

AML Compliance for Tranche 2 Entities

Navigate complex AML obligations with confidence. With over 90,000 Australian businesses requiring compliance by 1 July 2026 and significant penalties, expert guidance is essential.

298
Days to comply
90k+
New entities
$31.3M
Max penalty
5
Key sectors

Understanding Tranche 2 Requirements

Tranche 2 of Australia's Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) regime extends compliance obligations to designated non-financial businesses and professions (DNFBPs). These entities now face complex regulatory requirements that demand specialised expertise and tailored solutions.

Critical Timeline

Businesses starting preparation in Q4 2025 will have adequate implementation time. Those beginning later risk compliance gaps and potential penalties.

Lane Consulting provides the guidance you need to implement robust compliance frameworks, mitigate risks, and ensure ongoing adherence to AUSTRAC requirements while maintaining operational efficiency.

Read comprehensive Tranche 2 FAQs

Key Compliance Areas

Customer Due Diligence (CDD)

Comprehensive identity verification and risk assessment procedures for all clients and transactions.

Timeline: Before providing designated service
Existing clients only need re-verification if risk triggers occur

Enhanced Due Diligence (EDD)

Additional scrutiny measures for high-risk customers, politically exposed persons, and complex transactions.

Timeline: When risk indicators are present
Includes beneficial ownership identification for companies

Ongoing Monitoring

Continuous surveillance of client relationships and transaction patterns to identify suspicious activities.

Timeline: Throughout business relationship
Must be appropriate to risk level and business size

Record Keeping

Systematic documentation and retention of all compliance-related records and transaction data.

Timeline: Maintain for 7 years minimum
Must be readily available for AUSTRAC inspection

Reporting Obligations

Timely submission of suspicious matter reports (SMRs) and threshold transaction reports (TTRs) to AUSTRAC.

Timeline: SMRs within 24 hours-3 days, TTRs promptly
TTRs required for $10,000+ cash transactions

Risk Assessment

Regular evaluation and documentation of money laundering and terrorism financing risks specific to your business.

Timeline: Initially and when circumstances change
Must be independently reviewed every 3 years

Sector-Specific Requirements & Thresholds

Each sector has specific triggers and thresholds that determine when AML obligations apply. Understanding these is crucial for compliance planning.

Real Estate Professionals

Compliance Trigger

All property transactions as agent

Includes buyers' agents and property developers selling directly

Comprehensive AML compliance for real estate agents, property developers, and property management companies navigating complex transaction reporting requirements.

Designated Service Examples

  • Acting as agent for property purchases/sales
  • Buyer advocacy services
  • Property development sales
  • Legal work to plan/execute transfers

Key Challenges

  • High-value transactions
  • Complex ownership structures
  • International buyers
  • Cash settlements

Our Services

  • Transaction monitoring systems
  • Customer due diligence protocols
  • Beneficial ownership identification
  • Suspicious activity reporting

Legal Practices

Compliance Trigger

All designated services

Legal professional privilege protections maintained

Specialised non-legal guidance for law firms and legal practitioners managing client trust accounts and complex legal transactions under AML obligations.

Designated Service Examples

  • Property transaction assistance
  • Company/business sale facilitation
  • Trust account management for transactions
  • Corporate structure arrangements

Key Challenges

  • Client confidentiality vs compliance
  • Trust account management
  • Complex corporate structures
  • Cross-border transactions

Our Services

  • Client identification procedures
  • Trust account monitoring
  • Risk assessment protocols

Accounting Firms

Compliance Trigger

Business/company dealings, trust management

Enhanced due diligence for complex structures

Expert advisory for accounting practices implementing robust AML frameworks while maintaining client service excellence and professional standards.

Designated Service Examples

  • Company purchase/sale assistance
  • Trust creation and management
  • Professional trustee services
  • Corporate restructuring advice

Key Challenges

  • Client data sensitivity
  • Multiple service types
  • Regulatory complexity
  • Professional obligations

Our Services

  • Enhanced due diligence
  • Risk categorisation systems
  • Ongoing monitoring protocols
  • Compliance training programs

Jewellers & Precious Metals

Compliance Trigger

A$10,000+ cash or cryptocurrency transactions

Bullion dealers already covered regardless of amount

Tailored compliance solutions for precious metals dealers and jewellery retailers managing high-value, cash-intensive transactions.

Designated Service Examples

  • $12,000 diamond necklace sold for cash
  • Linked transactions totaling $10k+
  • Cryptocurrency payments over threshold
  • Multiple related cash transactions

Key Challenges

  • Cash-intensive business
  • High-value items
  • Anonymous buyers
  • International trade

Our Services

  • Cash transaction protocols
  • Customer verification systems
  • Inventory tracking compliance
  • Suspicious transaction identification

Timeline to Implementation

The following draft project plan has been prepared to assist Tranche 2 entities in preparing for the law changes applicable to them. This project plan can (and should) be tailored as appropriate for your business' operations.

1

Foundation & Assessment

September - December 2025

  • Establish Program Governance, conduct stakeholder alignment sessions.
  • Complete due diligence on existing controls environment (e.g. KYC) and role of third parties.
  • Prepare ML/TF/PF Risk Appetite Statement.
  • Prepare ML/TF/PF Risk Assessment (RA) Methodology.
  • Commence and finalise* ML/TF/PF risk assessment process and commence AML/CTF Program Development.
  • Commence regulatory requirements mapping.
2

Further Framework Development

January - March 2026

enrol with AUSTRAC by 31 March 2026
  • AML/CTF Program Development (cont.), enrol with AUSTRAC by 31 March 2026.
  • Policy and Procedure Development (RA, KYC, Ongoing Customer Due Diligence, Enhanced Customer Due Diligence, Transaction Monitoring, AUSTRAC Reporting, Governance, Risk Awareness Training, Record Keeping, Independent Review).
  • AML/CTF Screening Protocols (PEPs, sanctioned persons, adverse media).
  • Customer Risk Rating Methodology development.
  • Transaction Monitoring Scenario development (linked to Risk Assessment).
  • Risk Awareness Training Module finalised.
3

Technology Integration

April - May 2026

  • Customer Onboarding - KYC capture.
  • AML/CTF Screening software (if different from onboarding technology).
  • Transaction Monitoring Solution trialing.
  • Management Reporting template finalisation (including key risk indicators).
  • Data Management Platform - customer single view, data integration and quality, historical data retention.
  • User Acceptance Testing.
4

Testing and Tinkering

June 2026

  • Testing of individual components of procedures.
  • End-to-end process testing with sample areas.
  • Regulatory requirement validation and control effectiveness testing.
  • Training program rollout, with role specific training modules. Where technology identified and implemented in Phase 3, system training programs.
5

Go-Live Activities

End June 2026

  • Phased rollout by business unit.
  • Ongoing support for any questions.

* AUSTRAC has indicated that it will release guidance materials for industry in advance of 1 July 2026. These 5 Phases contemplate the ability to flex to ensure that the Program and Policies developed align with AUSTRAC's expectations.

The Cost of Non-Compliance

AUSTRAC has significant enforcement powers. Understanding the consequences of non-compliance underscores why professional guidance is essential, not optional.

Civil Penalties

Up to $31.3 million

Up to 100,000 penalty units per breach

Criminal Penalties

Prison terms possible

For serious offences like operating without required registration

Regulatory Action

Business disruption

Enforceable undertakings, remedial directions, or registration cancellation

Reputational Damage

Long-term impact

Public enforcement actions can severely impact business reputation

Recent Enforcement Reality

AUSTRAC has pursued multi-million-dollar penalties against companies with systemic AML failures. With Tranche 2, enforcement will extend to your sector.

The cost of preparation today is significantly less than the cost of non-compliance tomorrow.

Why Choose Lane Consulting

Our deep sector expertise and practical approach ensure compliance solutions that work for your business.

Sector Expertise

Deep understanding of the unique challenges and requirements facing each Tranche 2 sector.

Practical Solutions

Compliance frameworks designed to work within your existing business operations and workflows.

Regulatory Knowledge

Up-to-date expertise on AUSTRAC requirements and evolving AML legislation affecting your industry.

Risk Mitigation

Comprehensive strategies to protect your business from regulatory penalties and reputational damage.