If you run an accounting practice, bookkeeping service, law firm, conveyancing business, or real estate agency in Melbourne or Victoria, the compliance framework that governs how you take on clients has changed significantly.
Australia's Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) regime — long applied primarily to banks and financial institutions — has been expanded to capture a much wider range of professional service providers. These changes, commonly referred to as the Tranche 2 reforms, are not a future proposal. They are current law, and they apply to businesses across Footscray, Melbourne, and Victoria right now.
For businesses that have not yet addressed their obligations, the time to do so is now — before enforcement attention turns squarely to the newly captured sectors.
What the Tranche 2 Reforms Actually Changed
Before the Tranche 2 reforms, Australia's AML/CTF obligations applied mainly to the financial sector — banks, credit unions, money transfer businesses, and similar entities.
The reforms close that gap. They bring Australia into line with international AML standards set by the Financial Action Task Force (FATF), which had previously identified Australia's exclusion of designated non-financial businesses and professions (DNFBPs) as a significant gap in its framework.
This is a substantive new compliance obligation with real consequences for non-compliance.
Who Is Captured in Australia
The businesses captured by the expanded regime are those providing what the AML/CTF Act calls designated services. The most relevant categories for businesses include:
- Accountants and tax agents — when providing services involving business structuring, asset management, or financial transactions on behalf of clients
- Bookkeepers — when managing financial records or processing transactions in ways that could be used to obscure the movement of money
- Lawyers and conveyancers — particularly when handling real property transactions, client funds, company formations, or business acquisitions
- Real estate agents — when facilitating the purchase, sale, or lease of real property
- Trust and company service providers — businesses that form, register, or manage corporate structures or trusts on behalf of clients
The Four Core Obligations
1. Customer Due Diligence (KYC)
Before providing designated services, businesses must verify who their clients are. For individual clients, this means verifying name, date of birth, and address using a reliable identity document such as a passport or driver's licence. For business clients, verification extends to the entity itself and — critically — to the beneficial owners: the individuals who ultimately own or control the business.
KYC is not a one-time onboarding exercise. It must be maintained on an ongoing basis. Where client circumstances change — new ownership, new business activities, new transactions — the verification must be updated.
2. Risk Assessment
Every business captured by the regime must assess the money laundering and terrorism financing risks inherent in its client base, services, and transaction types. This assessment must be documented and must form the basis of the AML/CTF program.
3. Monitoring and Reporting
Where there are reasonable grounds to suspect a transaction or matter is linked to criminal activity, a suspicious matter report (SMR) must be lodged with AUSTRAC — regardless of the amount involved, and regardless of whether the suspicion can be substantiated. Cash transactions of $10,000 or more also trigger mandatory threshold transaction reports.
4. Staff Training and Record Keeping
Staff who deal with clients or handle transactions must be trained on the business's AML/CTF obligations — what to look for, what the red flags are, and what to do when a concern arises. Training must be documented. Identity verification records must be retained for a minimum of seven years.
Why Now Is the Right Time for Melbourne Businesses
The businesses that manage AML/CTF compliance most effectively are the ones that build it into their operations from the outset — so that asking for ID is normal, documentation is current, and the program runs alongside the business rather than as a separate administrative burden.
The businesses that struggle are invariably the ones that wait until a compliance review, a client complaint, or a regulator inquiry forces the issue. By that point, the options are narrower, the cost of remediation is higher, and AUSTRAC's view of the business is already forming.
For businesses in Melbourne and Victoria that are newly captured, the current period is the window to get this right. AUSTRAC has signalled its intention to focus enforcement attention on the newly captured sectors. The businesses that have their programs in place before that attention arrives are in a materially better position than those that do not.
How Phan Campbell & Associates Can Help
Our legal and accounting teams at Phan Campbell & Associates in Footscray work with small and medium businesses across Melbourne and Victoria on AML/CTF compliance. We help businesses determine whether they are captured, conduct proportionate risk assessments, build AML/CTF programs that work practically alongside how the business operates, and implement KYC processes that meet the legal requirements without creating unnecessary friction with clients.
If you are not sure where your business stands, we are happy to have an initial conversation to help you find out.
Frequently Asked Questions
1. Do the new AML rules apply to small businesses in Melbourne?
Yes. The expanded AML/CTF regime applies to businesses of all sizes providing designated services — including accounting, bookkeeping, legal, conveyancing, and real estate — across Melbourne and Victoria.
2. What is an AML/CTF program?
An AML/CTF program is a documented framework covering how your business identifies and manages money laundering and terrorism financing risks.
3. What is the KYC process?
KYC requires verifying client identity before providing services — name, date of birth, and address for individuals; entity details and beneficial ownership for business clients.
4. What are the penalties for AML/CTF non-compliance in Australia?
Penalties include civil financial penalties, enforceable undertakings, and in serious cases, criminal prosecution. AUSTRAC has broad enforcement powers and uses them across all business sizes.