AML CTF Obligations for Lawyers in Queensland 2026: What Tranche 2 Means for Your Practice and Your Clients

As of 1 July 2026, Queensland lawyers are operating under a fundamentally different compliance landscape. The Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Amendment Act 2024 (Cth) has extended Australia’s AML/CTF regime to legal professionals for the first time — and the obligations are real, immediate, and enforced from day one. If you are a lawyer providing certain transaction-related services, or a business owner who uses lawyers for deals, restructures, or property transactions, this article is for you. The most urgent item on your list: if your firm was providing designated services on 1 July 2026, you must be enrolled with AUSTRAC and have notified AUSTRAC of your compliance officer’s identity by 29 July 2026. That is one week away.

What Is AML/CTF Tranche 2?

Australia’s anti-money laundering and counter-terrorism financing framework has existed since the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) came into force. For the first 18 years of that Act, its reach was largely confined to banks, financial institutions, casinos, and remittance providers — around 19,000 businesses in total. Lawyers, accountants, and real estate agents were outside the regime.

That changed with the AML/CTF Amendment Act 2024, which passed the Australian Parliament in November 2024. The Amendment Act delivers what the legal and financial crime sectors had anticipated for years: Tranche 2, the expansion of Australia’s AML/CTF regime to designated non-financial businesses and professions. AUSTRAC CEO Brendan Thomas described the reforms as “the most significant overhaul of Australia’s AML/CTF framework in more than 20 years.” The Australian Government’s stated goal is to close long-standing gaps that criminals have exploited in high-risk professions that sit at key points in financial and property transactions, and to align Australia with international standards.

The scale of the change is significant. AUSTRAC expects the number of regulated businesses to grow from approximately 19,000 to close to 100,000 nationwide as a result of Tranche 2.

Who Is Now a Reporting Entity Under Tranche 2 AML/CTF Obligations?

Tranche 2 brings the following newly regulated sectors into the AML/CTF regime from 1 July 2026:

• Legal professionals (lawyers and law firms providing designated services)
• Accountants (accounting firms providing designated services)
• Real estate agents and professionals
• Conveyancers
• Trust and company service providers
• Dealers in precious metals, stones and products

For lawyers, the Tranche 2 regime does not simply regulate “law firms” as entities. It regulates what those firms do. Whether a legal practice is inside or outside the AML/CTF net turns on whether the practice provides one or more “designated services” — a defined concept under the amended AML/CTF Act.

According to the Law Society of New South Wales, the designated services relevant for lawyers are set out in Table 6 of the amended AML/CTF Act (subsection 6(5B)) and include:

1. Assisting clients to buy, sell or transfer real estate
2. Assisting clients to buy, sell or transfer entities or legal arrangements
3. Receiving, holding, controlling or managing client property when assisting in planning or executing a transaction
4. Assisting clients with equity or debt financing transactions
5. Selling or transferring a shelf company
6. Assisting clients to create or restructure entities or legal arrangements (companies, trusts, partnerships)
7. Acting as, or arranging for someone else to act as, a director, secretary, attorney of a non-natural person, trustee, partner or similar
8. Acting as, or arranging for someone else to act as, a nominee shareholder
9. Providing a registered office address or principal place of business address for an entity

Critically, the assistance only needs to directly advance the transaction — not just advise on it. Preparatory or organisational steps that are connected to a transaction in progress can trigger obligations. However, pure litigation work (for example, advising on whether a past transaction was valid) or strategic advice that merely influences a client’s thinking without advancing a transaction, is generally outside the scope of the regime. If you are uncertain whether your practice is captured, obtain independent advice specific to your work mix.

One other important point: in-house lawyers advising their own employer are generally not themselves captured as reporting entities under the regime — though their employer may be.

What Are the Key AML/CTF Obligations for Lawyers?

If your practice is a reporting entity, the obligations are layered and operational. This is not a paper compliance exercise. AUSTRAC has been explicit: functioning systems, trained staff, and active reporting processes are expected from 1 July 2026 onwards.

1. Enrolment with AUSTRAC

Every reporting entity must enrol with AUSTRAC via the AUSTRAC Online platform. Enrolment opened on 31 March 2026. If your firm was providing designated services on 1 July 2026, the deadline to complete enrolment is 29 July 2026 — 28 days after obligations commenced. If you start providing designated services after 1 July, you must enrol within 28 days of first providing that service. Operating without enrolment is a criminal offence under the AML/CTF Act.

2. AML/CTF Program

You must develop and implement a written AML/CTF program that is tailored to your firm’s size, structure, and risk profile. The program must include two components:

• Part A: General risk management — your firm-wide risk assessment and controls for managing money laundering and terrorism financing risks.
• Part B: Customer identification and verification procedures — your processes for knowing who your clients are before and during any designated service.

The program must be approved by a senior manager before you provide your first designated service from 1 July 2026. It is a living document — you must review and update it regularly as risks and circumstances change.

3. Appoint an AML/CTF Compliance Officer

Every reporting entity must appoint an AML/CTF compliance officer: a senior, Australian-based manager responsible for implementing and overseeing the AML/CTF program. You are required to notify AUSTRAC of the identity of your compliance officer. The deadline for this notification, for firms providing designated services on 1 July 2026, is 29 July 2026. This is one of the most time-sensitive obligations on the current calendar.

4. Customer Due Diligence (CDD)

From 1 July 2026, every time your firm provides a designated service to a client, you must conduct customer due diligence. This includes:

• Know Your Customer (KYC) procedures: Identify and verify the identity of your client before or when providing the service.
• Ongoing monitoring: Continuously monitor transactions and client behaviour throughout the relationship to detect unusual activity.
• Enhanced due diligence (EDD): For higher-risk clients — for example, politically exposed persons, clients from high-risk jurisdictions, or unusual transaction structures — apply additional verification and scrutiny.

Beneficial ownership identification is a core element of CDD: you need to understand who ultimately owns or controls the client entity you are acting for, not just the nominal party to the transaction.

5. Suspicious Matter Reporting (SMR)

If your firm has reasonable grounds to suspect that a transaction or potential transaction is connected to money laundering, terrorism financing, or certain other serious offences, you must submit a Suspicious Matter Report to AUSTRAC. The timing requirements are strict: within 24 hours for suspicions relating to terrorism financing, and within three business days for other suspicious matters.

The “tipping off” prohibition applies: once an SMR is filed, you must not disclose to the client or any other person that a report has been made or is being considered. This is a separate obligation and a breach carries its own consequences.

6. Threshold Transaction Reports (TTR) and International Funds Transfer Instructions (IFTI)

Where a transaction involves physical currency of AUD $10,000 or more (or the equivalent in foreign currency), a Threshold Transaction Report must be lodged with AUSTRAC within 10 business days. For cross-border fund transfers, International Funds Transfer Instruction reports must be submitted within 10 business days of the transfer instruction.

7. Staff Training

All personnel involved in providing designated services must be trained on AML/CTF obligations — how to identify red flags, how to handle suspicious activity, and how to escalate concerns. Training must be completed before staff provide designated services, and must be ongoing.

8. Record Keeping

Reporting entities must maintain comprehensive records of customer identification, transaction records, risk assessments, and AML/CTF program documents for a minimum of seven years. These records must be retrievable and available to AUSTRAC on request.

The 29 July 2026 Deadline — What You Must Do Right Now

If you have been reading this article and you are a lawyer or law firm that provides transaction-related services — and you have not yet enrolled with AUSTRAC or notified AUSTRAC of your compliance officer — you have one week. Here is the immediate action list:

1. Confirm whether your firm provides designated services. If any of the nine Table 6 items listed above describe your work, your firm is likely a reporting entity. Get advice if you are unsure.
2. Enrol via AUSTRAC Online. Go to austrac.gov.au and complete your enrolment immediately. The deadline is 29 July 2026 for firms providing designated services on 1 July.
3. Appoint your AML/CTF compliance officer and notify AUSTRAC. This must also be done by 29 July 2026.
4. Ensure your AML/CTF program is in place. Part A and Part B, approved by a senior manager, tailored to your firm.
5. Confirm staff are trained and your SMR process is operational. From 1 July, every designated service transaction triggers obligations. If you are not ready to report a suspicious matter, you are not compliant.

AUSTRAC has been unambiguous: there is no grace period, and enrolment alone is not compliance. The regulator expects functioning programs, trained staff, and active reporting capability from day one.

What Does This Mean for Boss Lawyers’ Clients?

If you are a Queensland business owner or entrepreneur who engages lawyers for commercial transactions — whether that is buying or selling a business, restructuring your corporate group, acquiring commercial property, or establishing a new trust or company structure — Tranche 2 changes the mechanics of your relationship with your lawyer.

Effective 1 July 2026, when you engage Boss Lawyers or any other law firm for a designated service, we are required by law to:

• Verify your identity before or at the time of providing the service — not just name and address, but potentially documents confirming who you are, your role in the transaction, and who ultimately owns or controls any entity involved.
• Understand the nature and purpose of the transaction at a level of detail that allows us to assess the money laundering or terrorism financing risk it may present.
• Monitor transactions for any activity that appears unusual, inconsistent with your stated purposes, or inconsistent with what we know about you as a client.
• Report to AUSTRAC if we identify suspicious activity — and we cannot tell you if we have done so.

This is not a reflection on you or your integrity. It is a legal obligation that applies to every client in every transaction that falls within the designated services. Think of it like the identity checks you go through when opening a bank account or settling a property purchase. It is now part of the legal services landscape in Australia.

What this means practically is that you should expect your lawyer to ask you for additional documentation at the outset of a transaction, including proof of identity, information about beneficial ownership of any entities involved, and in some cases the source of funds. Providing this information promptly and accurately will help your matter proceed efficiently.

What Happens if a Law Firm Does Not Comply?

AUSTRAC has made clear that it expects compliance from 1 July 2026 and that early enforcement action is anticipated where firms fail to meet baseline obligations. The consequences of non-compliance include:

• Civil penalties under the AML/CTF Act (refer to the Act and AUSTRAC’s published guidance for the current penalty framework — specific penalty amounts should be confirmed directly with AUSTRAC or via the legislation)
• Enforceable undertakings
• Remedial directions
• Compliance audits by AUSTRAC
• Reputational damage — in professional services, where client trust is the business, this is a material risk

AUSTRAC also has expanded information-gathering powers, including the ability to issue formal information-gathering notices under the AML/CTF Act, which are now in effect. The regulator has flagged suspicious matter reporting failures as a serious enforcement priority.

It is worth noting that the obligations extend beyond administrative compliance. A law firm that fails to identify and report suspicious transactions involving money laundering or terrorism financing is not just breaching a regulatory requirement — it is potentially facilitating serious criminal activity. The reputational and professional consequences of that should not be underestimated.

Frequently Asked Questions: AML/CTF Tranche 2 for Lawyers and Queensland Business Owners

Does the AML/CTF Tranche 2 regime apply to all Queensland lawyers?

No. The AML/CTF regime applies to lawyers who provide one or more “designated services” with a geographical link to Australia in the course of carrying on a business. Designated services include assisting clients to buy or sell real estate, transfer entities, create or restructure companies or trusts, manage client money in connection with transactions, and similar activities. Pure litigation practices and advisory-only work that does not directly advance a transaction are generally outside the scope of the regime. If you are unsure whether your practice is captured, you should obtain independent legal advice.

When did AML/CTF Tranche 2 obligations start for lawyers?

Obligations commenced on 1 July 2026 under the Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Amendment Act 2024 (Cth). AUSTRAC opened enrolment for newly regulated entities on 31 March 2026. If your practice was providing designated services on 1 July 2026, you must be enrolled with AUSTRAC by 29 July 2026 — 28 days after commencement.

What is an AML/CTF compliance officer and do I need one?

Yes. If your firm is a reporting entity under the AML/CTF Act, you are required to appoint an AML/CTF compliance officer — a senior, Australian-based manager responsible for the implementation and oversight of your AML/CTF program. You must notify AUSTRAC of the identity of your compliance officer. The deadline for entities providing designated services on 1 July 2026 is 29 July 2026.

If I use a lawyer for a property or business transaction, what does this mean for me as a client?

From 1 July 2026, when you engage a lawyer for a transaction that falls within the designated services — such as buying or selling a business, restructuring a company, or acquiring real estate — your lawyer is required by law to verify your identity, understand the nature and purpose of your transaction, monitor for unusual activity, and in some cases report to AUSTRAC. This is similar to the identity verification process you already experience with banks. It is a legal obligation on the lawyer, not a reflection on you as a client.

What happens if a law firm does not comply with AML/CTF Tranche 2?

AUSTRAC has stated that there is no grace period. Non-compliance can lead to civil penalties, enforceable undertakings, remedial directions, compliance audits, and reputational damage. AUSTRAC also holds expanded information-gathering powers and has signalled that early enforcement action is expected for businesses that fail to meet baseline obligations. Refer to the AML/CTF Act and AUSTRAC’s published guidance for the current penalty framework, or contact AUSTRAC directly at austrac.gov.au.

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If you are involved in a commercial dispute or need advice on how the new AML/CTF obligations interact with your existing contracts or business structures, the commercial litigation lawyers at Boss Lawyers can help you navigate the legal landscape. Call Mark Harley on 1300 267 711 to discuss your situation.

Disclaimer: This article is general information only and does not constitute legal advice. AML/CTF obligations are complex and fact-specific. Whether a particular firm or individual falls within the Tranche 2 regime depends on the nature of the services provided and other circumstances. You should not rely on this article as a substitute for specific legal advice tailored to your situation. For authoritative guidance, refer to the AUSTRAC website at austrac.gov.au or contact Boss Lawyers directly.

Related reading: Understanding director obligations and corporate compliance is increasingly important. See also our guides on director disputes, director duties under the Corporations Act, and insolvency law for Queensland businesses.

Speak to Boss Lawyers About AML/CTF Compliance

The 29 July 2026 deadline is one week away. If your practice has not yet enrolled, has not appointed a compliance officer, or does not have an operational AML/CTF program, the time to act is now.

Boss Lawyers acts for Queensland businesses across commercial litigation, insolvency, corporate restructuring, debt recovery, and business transactions. We understand the commercial and legal landscape our clients operate in — and we can help you understand where you stand.

Call Mark Harley on 1300 267 711 or visit bosslawyers.com.au to discuss your situation.

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Mark Harley is the Principal Solicitor of Boss Lawyers Pty Ltd. He was admitted to practice in July 2008 and has 17+ years of experience in commercial litigation and insolvency law in Queensland.