Am I caught by AML Tranche 2? The test for accounting firms
Obligations commenced 1 July 2026 and the enrolment deadline has already passed. But a large number of firms currently panicking about this are not caught at all — and some who assume they're fine are. It turns on one question.
Updated 2 August 2026
The one question
Tranche 2 does not capture accountants. It captures designated services. That distinction is the whole thing, and most of the confusion in the market right now comes from collapsing it — firms assuming that because they are an accounting practice, they are automatically in scope.
The reforms added professional services to a new Table 6 in section 6 of the AML/CTF Act. If you provide one of those services in the course of your business, you are a reporting entity. If you don't, you aren't — regardless of your size, your client count or how uncomfortable that feels.
Likely caught
- Assisting a client to plan or execute the buying, selling or transfer of a body corporate or legal arrangement — in plain terms, helping restructure or transfer ownership of a company or trust.
- Company formation, and acting as (or arranging) a trust or company service provider.
- Assisting a client to plan or execute the buying, selling or transfer of real estate.
- Managing client money, accounts or assets where that forms part of a designated service.
- Acting as, or arranging for someone to act as, a nominee director, shareholder or trustee.
Not a designated service on its own
- Preparing an annual tax return.
- Preparing and lodging BAS.
- Bookkeeping.
- Payroll.
- Routine business advisory that does not touch structure, transfer or client money.
If you do someone's annual return and nothing else, that client does not trigger an obligation.
The trap is the firm that does mostly compliance work but sets up two or three companies a year for clients. That firm is caught — and is exactly the profile least likely to have realised it.
If you are caught, in order
- 1
Work out whether you provide a designated service at all.
This is the only question that matters first, and a large number of firms will answer no. If your work is genuinely tax, BAS, bookkeeping, payroll and general advice, you are very likely outside the regime. If you set up companies or trusts, or help clients restructure or transfer entities, you are almost certainly inside it.
- 2
Enrol with AUSTRAC if you are caught.
Enrolment opened 31 March 2026 and reporting entities must apply within 28 days of first providing a designated service — for firms already providing them on commencement, that meant 29 July 2026. If you have identified an obligation late, enrol now rather than waiting; late is materially better than not at all.
- 3
Put an AML/CTF program in place.
AUSTRAC publishes a starter program that small practices can adopt rather than drafting from scratch. You also need a nominated compliance officer and staff who have actually been trained — not a policy PDF nobody has opened.
- 4
Decide how customer due diligence fits your onboarding.
The rules tell you what to collect. They do not tell you where it sits in your engagement process, who chases the client, or what happens when a client refuses. Those are practice decisions, and they are the ones that determine whether this works.
- 5
Price it before you deliver it.
The most common mistake so far: firms absorbing verification work as a goodwill cost, then discovering it recurs on every new engagement. Decide the fee position before the first invoice, not after the tenth.
Why accountants, and why now
Australia was one of the last major jurisdictions to bring professional services into its AML regime. The UK has supervised accountants for years and New Zealand since 2018, which means this is not uncharted territory — it is territory your counterparts overseas have already mapped, including the parts that went badly.
The policy rationale is that accountants sit as gatekeepers to the structures that obscure beneficial ownership: trusts, layered corporate groups, nominee arrangements. That is why the obligations attach to structuring work rather than to compliance work, and it is a useful lens for reading any borderline case — the closer a service sits to who ultimately owns or controls something, the more likely it is caught.
Frequently asked questions
- Do accountants need to register with AUSTRAC?
- Only if the firm provides a designated service under the AML/CTF Act. Tranche 2 obligations commenced on 1 July 2026, and reporting entities must apply to enrol with AUSTRAC within 28 days of first providing a designated service — for firms already providing them at commencement, that deadline was 29 July 2026. Many accounting practices whose work is limited to tax returns, BAS, bookkeeping and payroll do not provide designated services and are not required to enrol.
- Is preparing a tax return a designated service?
- No. Preparing an annual tax return, lodging BAS, bookkeeping and payroll are not designated services under the AML/CTF Act on their own. If that is the entirety of what you do for a client, that client does not trigger an AML obligation. The obligations attach to services such as company and trust formation, assisting with the transfer of entities or real estate, and managing client money or assets.
- What is a designated service for accountants under Tranche 2?
- The reforms added professional services to a new Table 6 in section 6 of the AML/CTF Act. For accountants the main triggers are assisting a client to plan or execute the buying, selling or transfer of a company, trust or real estate; company formation and trust or company service provider activity; acting as or arranging a nominee director, shareholder or trustee; and managing client money or assets as part of a designated service. Accountants were brought into the regime because structuring work can be used to obscure beneficial ownership.
- Do I have to verify all my existing clients?
- No. Pre-commencement customer relief means clients you already acted for as at 1 July 2026 do not have to be retrospectively verified. They enter your customer due diligence process when a trigger occurs after that date — for example when you begin providing a designated service to them, or when something changes that alters their risk profile. That relief is a timing concession, not an exemption.
- What happens if an accounting firm does not enrol?
- Failing to enrol or to maintain an AML/CTF program while providing designated services is a breach of the AML/CTF Act and carries civil penalty exposure, alongside the professional consequences that follow a regulatory breach. If you have realised late that you are caught, the practical answer is to enrol promptly and document when and how you identified the obligation, rather than delaying further.