Who Needs to Comply with Tranche 2 in Australia

Tranche 2 does not automatically capture every business in a sector. This guide explains how designated services work, which Australian businesses may be affected, and what firms should review before deciding whether they need to prepare for new AML/CTF obligations.

Tranche 2
Tranche 2 Guide  ·  June 2026  ·  Australia Focus

Tranche 2 designated services are the key to understanding whether a business may be captured by Australia’s expanded AML/CTF regime.

Tranche 2 designated services are the starting point for deciding whether a business may need to comply with Australia’s expanded AML/CTF regime. A business should not assume it is captured only because it operates in law, accounting, real estate, conveyancing or high-value goods. Equally, it should not assume it is outside scope without reviewing the services it provides.

This distinction matters because Tranche 2 is service-based. The relevant question is whether the business provides Tranche 2 designated services with the required connection to Australia.

For newly regulated businesses, this assessment should happen before AML/CTF obligations begin. Once a business understands whether it provides captured Tranche 2 designated services, it can start planning customer due diligence, ID verification, business screening, PEP and sanctions screening, adverse media checks and ongoing monitoring workflows.

Quick answer

Tranche 2 designated services are the services that can bring newly regulated Australian businesses into the AML/CTF regime. Businesses may need to comply if they provide captured services with a connection to Australia, including certain services provided by legal professionals, accountants, conveyancers, real estate professionals and dealers in precious metals, stones and products.

Key date New obligations begin from 1 July 2026 for newly regulated businesses providing relevant designated services.
Tranche 2 designated services workflow showing sector, service and AML control assessment

The scope question is not only which sector a business belongs to. It is whether the business provides Tranche 2 designated services that require AML/CTF controls.

The Tranche 2 scope question in three parts

Before building an AML/CTF program, a business should understand whether its services are captured. This decision path gives the article a more practical structure than a generic compliance overview.

1

Is the business in an affected sector?

Legal, accounting, conveyancing, real estate and high-value goods businesses should review their exposure.

2

Does it provide a captured service?

Tranche 2 designated services depend on the actual service provided, not just the business category.

3

What controls are needed?

If captured, the business should prepare CDD, screening, risk review, reporting and record keeping processes.

What are Tranche 2 Designated Services?

Tranche 2 designated services are the specific services that bring newly regulated entities into Australia’s AML/CTF regime. They are not the same as a broad industry category.

For example, a business may operate in the legal or accounting sector, but its AML/CTF obligations depend on whether it provides captured Tranche 2 designated services. This is why service mapping is one of the first steps in Tranche 2 readiness.

AUSTRAC has published guidance on designated services for newly regulated entities, including professional services, real estate services, and precious metals, stones and products. Review AUSTRAC’s designated services guidance.

Sector The type of business or profession.
Service The actual work provided to clients.
Client The parties, structures and risks involved.
Control The AML/CTF workflow needed if captured.

Why Tranche 2 Designated Services Matter

Tranche 2 designated services matter because two businesses in the same sector may have different obligations depending on what they actually do for clients.

A law firm that only provides low-risk advisory services may not have the same exposure as a firm involved in property transactions, trust structures or company arrangements. Similarly, an accountant preparing simple tax returns may have a different risk profile from a firm setting up companies or advising on complex structures.

This creates a practical challenge. Businesses need to review workflows, not just job titles. The more clearly a firm maps its services, the easier it becomes to decide whether it needs to enrol, build an AML/CTF program and prepare staff for new obligations.

Tranche 2 Designated Services by Sector

The businesses below should review the reforms closely. However, the test is still service-based. A firm should confirm whether it provides captured Tranche 2 designated services before deciding what controls are needed.

Legal professionals

Law firms should review whether services involving property, companies, trusts, client money or transactions may be captured.

  • Property-related services
  • Company or trust arrangements
  • Client money or transaction support

Accountants

Accounting practices should review company, trust, advisory and restructuring work rather than assuming all services are treated the same way.

  • Company formation
  • Trust or structure advice
  • Beneficial ownership review

Conveyancers

Conveyancers should review property transfer workflows, client verification, source of funds questions and transaction risk.

  • Buyer and seller onboarding
  • Property transfers
  • Source of funds concerns

Real estate professionals

Real estate businesses should review services connected to buying, selling or transferring real estate.

  • Sale and purchase activity
  • Client verification
  • High-value transaction risk

Precious metals, stones and products dealers

Dealers should review high-value transactions, customer identity, payment method and source of funds risks.

  • High-value goods
  • Cash or unusual payment patterns
  • Repeat or cross-border customers

Trust and company service providers

Businesses supporting company, trust or control structures should review whether their services create AML/CTF exposure.

  • Company services
  • Trust arrangements
  • Nominee or control structures
Scope question Why it matters Action
What service is being provided? Tranche 2 designated services are based on specific services, not only the sector name. Map services
Who is the client? Individuals, companies, trusts, beneficial owners and overseas parties can change the risk profile. Assess client
Is there a transaction or asset involved? Property, high-value goods and structures can increase financial crime exposure. Review matter
Can the business evidence its decision? Scope decisions, risk reviews and controls should be documented. Keep records

Professional Tranche 2 Designated Services

Professional services are a major part of the Tranche 2 reforms. Legal professionals, accountants, conveyancers and trust or company service providers may need to review whether their work falls within the new designated services.

AUSTRAC guidance for professional designated services notes that obligations apply if a business provides a relevant table 6 designated service from 1 July 2026. The guidance also states that whether activities relate to providing a table 6 designated service depends on the facts of each case. Read AUSTRAC’s professional designated services guidance.

For these firms, the practical challenge is to identify which client workflows may need AML/CTF controls without slowing every matter unnecessarily. This is why mapping Tranche 2 designated services against real client work is more useful than relying on broad assumptions.

Example scope review

An accounting firm provides tax returns for individuals, but it also helps business clients create companies, restructure ownership and set up trusts. The firm should not assess Tranche 2 only by asking whether it is an accounting practice.

It should review the services being provided, the client type, the ownership structure and where risk controls need to sit in the workflow.

What the firm should check

  • Which services may be captured by the reforms.
  • Which clients require individual or business verification.
  • Whether beneficial owners, directors or controllers need screening.
  • Where risk decisions and compliance records should be captured.

Real Estate and High-Value Tranche 2 Designated Services

Real estate, conveyancing and high-value goods are also important Tranche 2 focus areas because they can involve large transfers of value, complex ownership and assets that may be used to store or move wealth.

AUSTRAC’s real estate designated services guidance states that if a business provides any of those designated services from 1 July 2026, it must comply with the AML/CTF Act and Rules from that date, including enrolment and initial customer due diligence before providing the designated service. Read AUSTRAC’s real estate designated services guidance.

AUSTRAC has also published designated services guidance for buying or selling precious metals, stones and products. Review AUSTRAC’s precious metals, stones and products guidance.

When these services need closer review

A

Property or asset value is high

Large values can make the service attractive for money laundering or illicit wealth movement.

B

Client ownership is unclear

Companies, trusts, nominees or overseas parties can make control harder to verify.

C

Funds are difficult to explain

Unclear source of funds or source of wealth should trigger closer review.

How to Assess Tranche 2 Designated Services in Your Business

A practical scope assessment should map what the business actually does. This is more useful than relying on a broad sector label or a general assumption.

Start by listing the services offered, the client types served, the transactions supported and any entities or assets involved. Then compare those services to AUSTRAC guidance and the relevant Tranche 2 designated services.

If there is uncertainty, the business should seek qualified legal or compliance advice before making a final decision.

Step 1

List the services provided

Document the actual services the business provides, including services delivered by different teams, offices or partners.

Step 2

Map client workflows

Identify where clients are onboarded, verified, screened, reviewed and approved before work begins.

Step 3

Compare against designated services

Review AUSTRAC guidance and match services against the relevant Tranche 2 designated services.

Step 4

Prepare the control framework

If captured, prepare onboarding, screening, monitoring, reporting and record keeping workflows.

Common Tranche 2 Designated Services Scope Problems

Scope assessment can become difficult when businesses rely on assumptions, incomplete service mapping or informal client processes.

Common problems include:

  • Assuming all businesses in a sector are automatically captured.
  • Assuming a business is outside scope without checking designated services.
  • Reviewing client type but not the service being provided.
  • Missing services delivered by different teams, offices or partners.
  • Failing to assess trusts, companies and beneficial owners in client workflows.
  • Leaving enrolment and AML/CTF program planning too late.

These problems can delay readiness and make it harder to build practical AML/CTF controls before obligations begin.

Compliance note

Whether a business is captured by Tranche 2 depends on its specific services, clients and circumstances. Businesses should seek qualified professional advice before making scope and compliance decisions.

What to Prepare if Tranche 2 Designated Services Apply

If a business provides captured Tranche 2 designated services, it should move from scope assessment to operational readiness. The goal is to create a process that staff can apply consistently during real client work.

Preparation should include client onboarding, identity verification, business screening, beneficial ownership checks, PEP and sanctions screening, adverse media review, escalation rules, reporting processes and record keeping.

Readiness area What it means in practice Why it matters
Customer due diligence Identify and verify clients before providing a captured service. Supports risk-based onboarding.
Business and UBO checks Review companies, directors, controllers and beneficial owners. Helps identify hidden ownership and control risk.
Screening Check relevant parties for PEP, sanctions and adverse media exposure. Helps identify higher-risk relationships early.
Monitoring and records Document decisions and review changes in risk over time. Supports consistency and audit readiness.

How Nexiant Supports Tranche 2 Designated Services Readiness

Nexiant supports Tranche 2 readiness by helping businesses connect client onboarding, identity verification, business screening, risk checks and ongoing monitoring into a more consistent AML/CTF workflow.

For newly regulated entities, ID Verification can support individual client checks, while Business Screening can help assess companies, directors and beneficial owners.

Risk review can be strengthened through PEP and Sanctions Screening, Adverse Media Screening, Jurisdictional Risk Checks and Transaction Monitoring. These controls can help businesses prepare if their Tranche 2 designated services require an AML/CTF workflow.

Relevant Nexiant workflows for Tranche 2 readiness

Newly regulated businesses may need more than a single screening search. A practical AML/CTF workflow should connect identity, business, ownership, screening and monitoring controls.

ID Verification Business Screening PEP and Sanctions Screening Adverse Media Screening Jurisdictional Risk Checks Transaction Monitoring

Questions to Ask About Tranche 2 Designated Services

Before building an AML/CTF program, businesses should first understand whether they provide captured services and where risk appears in their client lifecycle.

Useful questions include:

  • Which services does the business provide today?
  • Which of those services may be Tranche 2 designated services?
  • Which teams, offices or partners provide those services?
  • What client information is collected before work begins?
  • Are companies, trusts, beneficial owners or overseas parties involved?
  • How are PEP, sanctions, adverse media and jurisdiction risks checked?
  • Where are decisions, escalations and risk assessments documented?
  • What technology is needed to make the process consistent?

These questions help businesses move from uncertainty to a practical readiness plan.

Frequently Asked Questions

Tranche 2 designated services are the specific services that bring newly regulated businesses into Australia’s AML/CTF regime. They should be assessed by reviewing the actual services provided, not just the business sector.
Not automatically. Whether a business needs to comply depends on whether it provides a captured designated service with the required connection to Australia. Each business should review its actual services and seek professional advice if unsure.
AUSTRAC guidance states that AML/CTF obligations for newly regulated entities providing relevant designated services begin from 1 July 2026. Businesses providing new designated services that commence on that date must apply to enrol by 29 July 2026.
A business should list the services it provides, map client workflows, compare those services against AUSTRAC designated services guidance and seek qualified advice if the position is unclear.
Captured businesses should prepare service mapping, customer due diligence workflows, screening processes, beneficial ownership checks, staff training, AML/CTF program documentation, reporting processes and record keeping procedures.

Clarify Tranche 2 scope and prepare practical AML workflows

Nexiant helps newly regulated businesses connect client onboarding, screening, KYB, risk assessment and monitoring into a more consistent AML/CTF compliance workflow.

Speak to our AML compliance team

This article was accurate at the time of publication in June 2026 and is intended for general informational purposes only. It does not constitute legal, regulatory or compliance advice. Organisations should seek qualified professional guidance in relation to their specific obligations.

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