On 1 July 2026, new Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) rules – known as the Tranche 2 reforms – came into effect for accounting and professional service firms like ours.
Introduced by the Australian Government and administered by AUSTRAC, the reforms align Australia’s AML/CTF regime with international standards set by the Financial Action Task Force (FATF). They extend obligations that were previously focused mainly on financial institutions such as banks.
The rules are designed to reduce the risk of businesses and legal structures being misused for money laundering, fraud and other serious financial crimes.
While the intention behind these changes is positive, in practice they introduce additional compliance steps into certain types of everyday client work, including entity set-ups and structural changes.
The practical impact for businesses is that you need to allow more time for these compliance requirements to be met.
What’s changed under AML/CTF rules for financial crime
These compliance changes are now built into how we deliver client work moving forward – they’re ongoing monitoring, not one-off checks.
Key requirements include:
- Verifying client identities – We must confirm and maintain accurate identification details for all clients and relevant parties.
- Understanding ownership structures – This includes reviewing and recording information about companies, trusts, and beneficial owners.
- Monitoring and maintaining records – Compliance is ongoing, meaning client information must be reviewed and updated over time where required.
- Completing checks before work begins – Certain types of work can’t begin until verification and compliance requirements have been completed.
What types of work are affected (and why)
These changes don’t apply to every conversation or piece of work in the same way. They specifically impact designated services where business identity, ownership, and financial structures are being created or changed.
In particular, AML/CTF requirements are triggered when we are:
- Setting up new entities – Such as companies, trusts, or other business structures where ownership and control must be verified before work can begin.
- Making changes to existing business structures – Including updates to directors, shareholders, beneficiaries or trust arrangements.
- Onboarding new clients or related parties – Where identity verification and customer due diligence checks may be needed before we can act.
- Advising on ownership or structuring arrangements – Where we need to clearly understand who ultimately controls or benefits from the entity.
- Handling engagements involving financial flows or transactions (in some cases) – Where additional information may be needed to meet compliance obligations.
See also: Business stage: set up
More compliance means longer timeframes
The biggest shift under these reforms isn’t just compliance; it’s timing.
Where before you might have expected entity set-ups or structural changes to be turned around quickly, sometimes even the same day, there’s now a mandatory compliance step that must be completed first.
This adds additional lead time, as we need to complete verification checks before any work can begin, and rely on clients providing the information required for this risk assessment.
In practice, work now depends on information being provided early, accurately, and in full before it can progress. Clear communication and timely responses will play a much bigger role in avoiding unnecessary delays.
Information you may need to supply
So, what types of information might we ask for when completing these new additional compliance steps?
Depending on your circumstances, we may need:
Identification documents
To confirm identity for all relevant individuals involved, we may ask for identification documents as part of our compliance obligations. This process helps us verify who we’re dealing with and ensure all required checks are completed accurately.
Supporting documents may include: a passport, driver’s licence, proof of age card, or other government-issued photo identification.
Business ownership details
If you operate through a company or trust, we may need details of directors, shareholders, beneficiaries, and how the structure is set up. This allows us to clearly understand and confirm how the business is owned and controlled.
Supporting documents may include (depending on your structure): company extracts, trust deeds, ASIC records, shareholder registers, or a company constitution.
Source of funds information
In some cases, we may need to understand where funds have come from to meet compliance requirements, for example, savings, sale of property, business income or an inheritance. This helps demonstrate how funds were originally generated and ensures we meet our regulatory obligations.
Supporting documents may include: bank statements, financial statements, tax returns, BAS statements, settlement statements, or estate documentation, depending on the source.
All this information can usually be provided via a digital platform, including a quick live selfie that’s matched against the document to confirm identity. We use easyAML to make this process simple and secure.
Key takeaway: timely information is crucial
AUSTRAC continues to release ongoing guidance as these reforms are rolled out, and we’ll continue to keep you informed as requirements evolve.
The key takeaway at this stage is simple: timing and communication will now directly influence how quickly work can be completed. To help avoid delays, make sure you supply us with any information we may ask for as promptly as possible, so we can meet our reporting obligations.
