Tranche 2 Reforms
What is Tranche 2 of the AML/CTF reform?
The Act currently targets the financial sector and other businesses that involve large transfers of cash – the gambling sector, remittance or money-transfer services, bullion dealers and more. A list of designated services – including taking deposits, payroll services and currency exchange – is included in the Act, and any business that provides one or more of these services must comply with the regulations. Some financial institutions are also required to report transactions over a certain threshold, along with any suspicious activity.
It’s looking increasingly likely that reforms to the AML/CTF Act (Tranche 2) will be implemented early 2025 and come into effect mid-2025 – so those who operate in the real estate, law, and accounting sectors need to start looking at how this will affect them too, and get their processes in place, ready to go.
Now that AML/CFT obligations are likely to apply to a broader range of organisations, more business owners will need to adjust their processes and put systems in place to ensure compliance. Adhering to the rules isn’t just a legal requirement, it’s also an important way to prevent criminal activity – and protect your business reputation.
What will Tranche 2 look like in Australia?
Businesses that are affected by the Act must register with AUSTRAC (Australian Transaction Records and Analysis Centre), the government agency responsible for deterring financial crime.
Once your business is registered, you are a ‘reporting entity’ and need to keep up with your obligations under the Act. This means:
- Developing a written AML/CTF program to manage compliance
- Carrying out risk assessments
- Appointing a compliance officer
- Collecting and verifying key client details before providing services – often referred to as ‘know your customer’ (KYC) information. This can mean taking verified copies of documents or using a credit-reporting body (CRB) to find and verify details.
- Reporting certain types of transaction – those over a certain monetary threshold, international transfers, information about carrying or shipping physical currency and any suspicious transactions or interactions
- Keeping and securely storing records showing your AML/CTF activity
- Submitting compliance reports if requested
- Paying an industry levy if your business earns over a certain threshold.
11 September: AML/CTF Bill released
This bill introduces expanded regulatory frameworks and stricter compliance requirements for a broader range of industries. This Bill has three key objectives:
- extend the AML/CTF regime to additional services provided by lawyers, accountants, trust and company service providers, real estate professionals, and dealers in precious metals and stones (tranche two entities)
- modernise the regulation of virtual assets and payments technology
- simplify and clarify the regime, to increase flexibility, reduce regulatory impacts and support businesses to prevent and detect financial crime.
AML and financial crime expert
Webinar series: Tranche 2 with Luke Raven and Milan Cooper
Part 3: AML 101 - Your guide to red flags and typologies
Wed Nov 27, 11:30am AEDT
In part 3 of this series, join us for a practical deep-dive into the warning signs of money laundering across professional services. We’ll cover:
- Why criminals specifically target professional services
- Red flags specific to the legal, accounting and real estate sectors
- How to respond when something doesn't look right
- Practical steps to protect your firm
- Real life red flag examples
[Past webinars on-demand]
Part 1: AML 101 for Australian professional services
Here's your chance to understand the risks faced by lawyers, real estate professionals, and accountants, as well as the key objectives and requirements of the new AML legislation in Australia. Watch the webinar here >
Part 2: AML 101 - Your guide to building a compliance framework
Understand the fundamentals of a compliance programme including policy development, risk assessments and practical steps to help reduce burden on your firm. Watch the webinar here >
We also received many questions during and after the webinars, which are addressed in the FAQs article. Read more >
How will Tranche 2 affect your business?
Real estate
Learn how First AML can get you compliant without risking transactions or customer relationships.
Law and Conveyancing
Get ahead of the game. Find out how First AML can give you a better picture of your clients, better data, quicker to onboard and get you to chargeable time quicker.
Accounting
Learn how we can help you meet your compliance requirements while protecting your bottom line and making KYC/KYB an easy process for your clients.
AML Glossary of Terms
Anti-money laundering can seem to have its own dialect, get clued in on everything compliance with this glossary of AML terms you need to know.
Tranche 2 resources
Tranche 2 Exclusive 3-in-1 Offer
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The one-stop-shop of everything you need to get compliant with AML/CTF reforms.