Is Your Business an AML/CTF Tranche 2 Entity?
AML/CTF Tranche 2: Australia's ML/TF reforms require captured entities and professions to operate with risk-based compliance frameworks. The first step is undertaking an evaluation of money laundering/terrorism financing risks arising from business operations.
What Does It Mean To Be a Tranche 2 Entity?
AML/CTF Tranche 2Reforms
Registration with AUSTRAC for Tranche 2 Entities opens from 31 March 2026. Implementation of ML/FT Programs by Tranche 2 Entities commences from 1 July 2026.
AML/CTF Tranche 2 1 July 2026
AML/CFT Tranche 2 entities commence under Australia’s anti-money laundering/countering terrorism financing laws (AML/CTF laws) from 1 July 2026.
Tranche 2 entities includes lawyers, accountants, real estate agencies. The first step to developing an effective AML/CTF Program is to undertake a robust ML/TF risk assessment of the business.
These ML/TF reform updates to capture ML/TF Tranche 2 Entities are focused on enhancing Australia’s approach to identifying and mitigating Money Laundering/Terrorism Financing (ML/TF) risks.
These risk-management reforms are ensuring captured entities operate with ML/TF governance systems that can demonstrate senior management oversight.
Ongoing monitoring and reporting of ML/TF risks is another focus for ML/FT Programs.
For businesses that are new to compliance laws designed to combat Money Laundering/Terrorism fFinancing (ML/TF) – it may seem daunting – and costly. But this does not need to be the way.
Technological advances are enabling businesses to take advantage of Cloud-technology and Compliance-as-a-Service (CaaS).
CaaS technology, such as AML360™, provides AML/CTF Tranche 2 entities with the ability to operate like an AML/CTF compliance professional from a keyboard.
AML360™ provides your business with ML/TF compliance expertise from a Cloud login or Cloud service.
Starting with the first obligations, an AML/CTF Tranche 2 entity is required to undertake a ML/TF risk assessment of its business vulnerabilities.
AML360™ makes this easy by providing an online form and delivering a risk-based report that highlights ML/FT inherent risks.
Maintaining and updating your money laundering/financing terrorism risk assessment is fast, saving your business time and human resourcing costs.
By embedding ML/FT compliance, risk management and subject-matter expertise into a single solution, AML/CTF Tranche 2 compliance costs are significantly reduced. Saving time and costs results from implementation of automated risk analysis, configured by AML/CTF compliance professionals.
To assist AML/CTF Tranche 2 to take ownership of their legal obligations, AML360™ provides your business with an assurance due diligence report. This report sets out why your business can establish its reliance on a 3rd party risk model.
Adopting a ML/TF risk model across an AML/CTF Program aligns with AUSTRAC’s reformed framework. From 31 March 2026, AUSTRAC is shifting from a prescriptive, compliance-based approach to a more outcomes-focused and risk-based approach.
These AUSTRAC reforms are transitioning Australia’s ML/TF supervisory model to a modern, risk-based regime to better align with the Financial Action Task Force recommendations.
Consequential to these changes, Australian business entities, known as ‘reporting entities’ and ‘designated entities’, are required to have robust risk assessments and updated programs. This includes ML/TF Tranche 2 entities that begin ML/TF compliance obligations from 1 July 2026.