Designated Services Under Australia's Tranche 2 AML Reforms

Real Estate Services

From 1 July 2026, certain real estate related services will be captured as designated services under the AML/CTF regime. Real estate transactions are widely recognised as higher risk because property can be used to conceal, transfer, or integrate illicit funds.

Examples include:

  1. Buyer’s or seller’s agent services, where a real estate agent negotiates and finalises the sale of residential property on behalf of a client.
  2. Property development sales, where a developer sells house and land packages or off-the-plan apartments and receives deposits or other client funds.
  3. Trust or escrow services, where a business holds deposits or other client funds in a trust or escrow account pending settlement of a property transaction.

Professional Services

From 1 July 2026, certain professional services that support financial or property transactions will be captured as designated services under Australia's AML/CTF regime.

These services are regulated when the professional's involvement materially facilitates the transaction, rather than providing general or incidental advice.

Examples include:

Real Estate Related Transactions

  1. Property acquisition through a trust, where a lawyer establishes a trust structure and acts on the purchase of commercial property on behalf of the trustee.
  2. Planning or executing real estate transactions, where a lawyer prepares and executes a contract for sale under a power of attorney for a company acquiring property.
  3. Transfer of real property, where a conveyancer prepares contracts for sale, conducts settlement and coordinates the transfer of title.

Company Formation, Structuring and Restructuring

  1. Incorporation and structuring of entities, where a lawyer or accountant advises on structure and incorporates holding companies or subsidiaries to operate a business.
  2. Pre-sale or pre transaction restructures, where a lawyer or accountant undertakes a corporate restructure to separate assets and liabilities ahead of a sale or transaction.
  3. Buying or selling a body corporate or legal arrangement, where a lawyer or accountant prepares documentation to transfer shares or interests in an entity, including asset or share sales of proprietary companies.

Trustee, Nominee and Director Services

  1. Nominee arrangements, where a firm provides nominee shareholder or nominee director services.
  2. Trustee services, where a corporate service provider acts as trustee of a trust holding client assets.

Trust Account and Funds Handling

  1. Handling client funds to facilitate transactions, where a lawyer or accountant receives, holds, controls, or disburses client funds through a trust account to complete a transaction.
  2. Escrow style arrangements, where a firm holds funds pending satisfaction of contractual or completion conditions.

Financing and Capital Raising

  1. Arranging debt or equity financing, where a lawyer, accountant or adviser assists in structuring, negotiating, or coordinating debt or equity financing for a transaction.
  2. Equity investment transactions, where a lawyer acts in relation to share issues or equity investments by incoming investors.

Mergers, Joint Ventures and Complex Transactions

  1. Joint venture structuring, where a lawyer structures a joint venture between domestic or foreign parties and prepares transactional documentation.
  2. Complex structuring or restructuring, where a lawyer or accountant establishes complex trust or corporate structures or restructures entities to facilitate a transaction.

Shelf Companies and Corporate Services

  1. Sale of shelf companies, where a firm sells a formed company to a client for immediate use.
  2. Registered office or principal place of business services, where a firm provides a registered address or principal place of business for a company.
Founder

What you will be required to do

If your business falls within Tranche 2, you will need to:

  1. Register with AUSTRAC before providing designated services
  2. Implement an AML/CTF compliance program appropriate to your business
  3. Verify client identity and beneficial ownership
  4. Monitor transactions and escalate suspicious activity
  5. Maintain records of compliance checks and decisions

These are now considered standard business practices for regulated professionals.

How Flagship AML Helps

Flagship AML is built for professional businesses that must comply with AML/CTF obligations without adding unnecessary complexity.

The platform converts complex regulatory requirements into a clear workflow that guides you through onboarding clients, assessing risk, maintaining records and staying audit ready.

Instead of relying on consultants or manual processes, businesses can manage compliance through a simple, centralised dashboard.

The Tranche 2 reforms will apply to thousands of professional businesses across Australia.

Flagship AML helps those businesses prepare early and manage compliance efficiently.

What we don't provide:

  1. Identity verification services: Flagship AML does not provide identity verification directly. Businesses may use a provider such as Australia Post Digital ID or another verification service.
  2. Legal advice about AML/CTF obligations or professional privilege: Flagship AML provides tools to support compliance workflows, but legal obligations and professional privilege must be assessed by each firm based on its own circumstances.
  3. Client funds or transaction handling services: The platform supports compliance processes but does not handle client funds, escrow arrangements or financial transactions.

What we do provide:

  1. A comprehensive AML/CTF compliance platform designed for Tranche 2 businesses preparing for Australia's AML/CTF reforms.
  2. Simple client onboarding and sanctions screening to support practical customer due diligence workflows.
  3. Structured risk assessment tools that guide firms through ML/TF risk analysis and document key compliance decisions.
  4. Audit-ready compliance records, with generated reports and documents stored securely within your dashboard.
  5. Ongoing platform updates as regulatory guidance and industry expectations evolve.

Frequently Asked Questions About Tranche 2

Tranche 2 refers to the proposed expansion of Australia's Anti-Money Laundering and Counter-Terrorism Financing laws to cover certain professional service businesses. These may include lawyers, accountants, real estate agents and trust and company service providers that provide designated services linked to financial transactions.

Businesses involved in real estate transactions, company formation, trust services, financial structuring or similar professional services may fall within the proposed Tranche 2 designated services framework. The final scope will depend on the legislation and AUSTRAC regulatory guidance.

The Australian Government has announced plans to extend AML/CTF obligations to additional industries. The timing of implementation will depend on the passage of legislation and the release of AUSTRAC guidance for affected businesses.

Businesses captured by the reforms will likely need to implement AML/CTF compliance programs, conduct client due diligence, identify beneficial owners, assess money laundering and terrorism financing risk, and maintain records demonstrating compliance.

Professional firms can begin preparing by reviewing their client onboarding processes, understanding their exposure to AML/CTF risks and implementing systems that help manage compliance obligations, including identity verification, risk assessments and record keeping.