Mark Harley | Principal Solicitor | Boss Lawyers
From 1 July 2026 — just over a month away — Australian lawyers, accountants, and real estate professionals will be subject to the same anti-money laundering and counter-terrorism financing obligations that banks and financial institutions have operated under for nearly two decades. If you are a Queensland business owner, company director, or investor who engages a lawyer for commercial transactions, company restructures, or insolvency matters, this directly affects you.
Here is what you need to know.
What Is AML/CTF Tranche 2?
Australia’s Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) has long required banks, financial institutions, and casinos to verify the identity of their customers, monitor transactions for suspicious activity, and report to AUSTRAC. These obligations were known as ‘Tranche 1’.
The Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2024 (passed 29 November 2024) extends these obligations — now called ‘Tranche 2’ — to a much wider range of professional services firms, including:
- Lawyers and law practices
- Accountants
- Real estate agents and conveyancers
- Trust and company service providers
- Dealers in precious metals and stones
Australia was the last major FATF (Financial Action Task Force) member country not to have extended AML/CTF obligations to these professional gatekeepers. That changes on 1 July 2026.
Law firms that provide certain designated services must enrol with AUSTRAC (enrolment opened 31 March 2026), implement a risk management programme, conduct customer due diligence, and report suspicious activity from 1 July 2026.
Which Legal Services Trigger Tranche 2 Obligations?
The law does not simply capture all legal work — it captures specific designated services described in Table 6 of the amended AML/CTF Act. For law firms, the key designated services include:
- Assisting clients to buy, sell or transfer entities (companies, trusts, other legal structures)
- Assisting clients to buy, sell or transfer real estate
- Receiving, holding, controlling or managing property when assisting clients in planning or executing a transaction
- Assisting clients with equity or debt financing transactions
- Creating or restructuring entities or legal arrangements
- Selling or transferring shelf companies
- Acting as a director, secretary, attorney, trustee, partner or similar
- Acting as a nominee shareholder
- Providing a registered office address or principal place of business
If you are engaging a lawyer to help you buy or sell a business, restructure a corporate group, raise equity or debt capital, or navigate insolvency or voluntary administration, your lawyer is almost certainly providing one or more of these designated services.
What Does This Mean for Business Owners and Directors?
When you engage your lawyer for a commercial transaction or restructure, they will now be required to:
1. Verify your identity. Your lawyer must collect and verify identity documents for you personally, and for any other beneficial owners of the entities involved. This means providing government-issued photo ID, and potentially additional documentation confirming source of funds or ownership structure.
2. Conduct customer due diligence (CDD). Your lawyer must understand the nature and purpose of your business relationship and, in higher-risk situations, conduct enhanced due diligence. This may include questions about the source of funds being used in a transaction.
3. Verify beneficial ownership. For companies or trusts, your lawyer must understand who ultimately controls or benefits from the entity. Complex ownership structures will require more detailed mapping.
4. Monitor and report suspicious activity. If your lawyer identifies suspicious activity — including situations where the source of funds is unclear or inconsistent with what you have told them — they are legally required to file a Suspicious Matter Report (SMR) with AUSTRAC. This is not optional.
This is not bureaucratic box-ticking. Firms that fail to comply face civil penalties of up to $33 million for body corporates, and up to $6.6 million for individuals.
What Does This Mean in Practice?
For most legitimate commercial clients, Tranche 2 will add a step — not a barrier — to your legal engagements.
Before or at the start of a new commercial matter, you can expect your law firm to:
- Ask you to complete an identity verification process (commonly via an online portal or certified documents)
- Request information about the structure of your business and its ultimate beneficial owners
- Ask questions about the source of funds for any transaction
- Obtain information about counterparties where relevant
Our practical advice:
- Be prepared to provide identity documents promptly — delays in providing CDD information can delay your matter
- For complex corporate structures, consider preparing an organisational chart showing ultimate beneficial ownership before your first meeting
- If your transaction involves foreign entities or counterparties, expect additional questions
- Treat these requirements as routine — they are now a standard part of professional legal practice
Action Points for Queensland Business Owners
- Expect identity verification at the start of any new legal matter — this is now a legal requirement, not a choice.
- Prepare your documentation — ID, business ownership structure, source of funds information.
- Do not be alarmed if your lawyer asks detailed questions about your transaction or business — this is due diligence, not suspicion.
- If your business provides any of the designated services (e.g., you are an accounting firm, real estate agent, or trust and company service provider), you need to enrol with AUSTRAC and have your own AML/CTF compliance programme in place by 1 July 2026.
- Seek legal advice if you are unsure whether your business is caught by Tranche 2 as a reporting entity.
How Boss Lawyers Can Help
At Boss Lawyers, we regularly act for directors and business owners navigating complex commercial transactions, litigation, insolvency processes, and corporate restructures. As Tranche 2 comes into effect, we are committed to meeting our obligations efficiently and without unnecessary delay to our clients' matters.
We understand that these requirements may feel unfamiliar at first. Our team will guide you through any verification process quickly and professionally so that your commercial matter can proceed without disruption.
If you are a business owner or director with questions about how Tranche 2 may affect your upcoming transaction, restructure, or insolvency matter, we are happy to discuss your situation confidentially.
Call Mark Harley on 1300 267 711 or contact us online.
Frequently Asked Questions
Q: Does AML/CTF Tranche 2 mean my lawyer will report me to the government?
Not unless there is a legal obligation to do so. Lawyers are required to file a Suspicious Matter Report with AUSTRAC only if they form a suspicion that a transaction is related to money laundering, terrorism financing, or other serious crime. Routine commercial transactions by legitimate businesses will not trigger reporting obligations.
Q: Which law firms are required to comply with Tranche 2?
Law practices that provide one or more designated services — including helping clients buy or sell businesses, restructure entities, raise capital, or manage funds in transactions — must enrol with AUSTRAC and comply with AML/CTF obligations from 1 July 2026.
Q: My business provides trust and company services — am I a Tranche 2 reporting entity?
Likely yes. Trust and company service providers (including those who help form companies, act as registered office providers, or arrange for nominee directors or shareholders) are directly caught by Tranche 2. You should seek legal advice specific to your situation and ensure you are enrolled with AUSTRAC before 1 July 2026.
This is general information only and is not legal advice. You should obtain professional advice specific to your circumstances.
Mark Harley is the Principal Solicitor at Boss Lawyers Pty Ltd. He has over 17 years of experience in commercial litigation, insolvency, and corporate disputes. Boss Lawyers is located at Level 27, Santos Place, 32 Turbot Street, Brisbane QLD 4000. Phone: 1300 267 711.
