By Cameron Cooper

With Australia’s tranche 2 anti-money laundering and counter-terrorism financing (AML/CTF) reforms set to take effect from 1 July 2026, Australian Transaction Reports and Analysis Centre (AUSTRAC) CEO Brendan Thomas explains what accountants need to do to be ready and how they can play their part in the crackdown on crime.

1. Enrol

Accountants providing designated services under the expanded AML/CTF regime must enrol with AUSTRAC between 31 March and 29 July 2026. This entails providing details on business services and structures, names of directors and officeholders, and relevant financial statements.

Thomas says registration is mandatory, before firms provide any regulated services. “That’s a straightforward, online process,” he says.

2. Appoint an AML/CTF officer

For small businesses, the compliance officer may be the head of the business or another appropriate employee. Larger businesses may consider recruiting candidates with suitable expertise. Compliance officers should have sufficient authority to access all areas of the business and its staff, as well as having the power to deal with any AML/CTF-related obligations.

Training of staff is also crucial to ensure they have the right skills and knowledge to manage the new rules.

Thomas notes that when New Zealand introduced similar AML/CTF reforms in 2018, many businesses turned to consultants for assistance.

“First, that was costly,” he says. “Second, it was cumbersome and third, because it was a new regime, people weren't sure about the quality of the work they were getting from some of those advisers and it caused a lot of angst.”

He is confident that new and comprehensive guidance material and starter program kit from AUSTRAC will limit the need for external assistance, and ensure a less costly and easier transition for the reforms in Australia.

3. Maintain an AML/CTF program and keep records

Accounting firms need to design a tailored AML/CTF program, including doing a risk assessment and outlining operational policies to manage money-laundering and terrorism-financing risks.

The starter program is designed for small practices, to help them get started without having to build an AML program from scratch. Larger, more complex businesses will need to build their own programs but for many businesses the starter tool can be a great base.

Programs should be clearly documented and approved by a senior manager.

In addition, firms should keep accurate and complete records covering customer due diligence, transactions, AML/CTF programs and training for at least seven years. These records must be available for AUSTRAC inspection.

4. Ramp up risk-based due diligence on clients

Accountants need to understand who they are dealing with. Is the client acting on behalf of themselves or someone else? Do documents look forged? Is the client uncomfortable providing identity information? Are there questions about from where the money could have come?

Firms will need to apply initial and ongoing client due diligence checks to identify high-risk clients in particular. Thomas says because accounting firms routinely collect know-your-customer (KYC) information, they are well placed to detect unusual behaviour or changes in a client’s risk profile.

“I’m sure most accountants really want to be confident that they know who they’re dealing with,” Thomas says. “This regime just cements that and asks people to really understand who your customer is.”

5. Watch out for red flags

AUSTRAC estimates that serious and organised crime costs the Australian economy about A$68 billion a year and Thomas wants to help bring that figure down through the new AML/CTF regime.

“We’re combatting very sophisticated and dogged criminal networks, organised crime groups and professional money-laundering organisations that are constantly looking for opportunities and avenues to launder money,” he says.

Accountants should start now to familiarise themselves with money-laundering techniques, so they can identify unusual behaviour and report suspicions when the AML/CTF obligations come into effect.

Thomas identifies shell companies that exist only on paper as a particular risk, with dodgy businesses using them to hide ownership and facilitate fraudulent transactions through complex networks that are hard to trace.

“These companies might be dormant for a while, before suddenly coming to life to launder money,” he says. “Accountants have an opportunity to see areas of suspicion and alert us.”

Vigilance around cash transactions is also recommended. “People turning up and paying for things in cash these days is something we’d suggest you might want to pay extra attention to, as people try to hide their identity.”

6. Report suspicious behaviour promptly

Accountants will be required to report a range of transactions and activities to AUSTRAC, including suspicious matter reports, threshold transaction reports for cash amounts of A$10,000 or more and cross-border movement reports for monetary instruments above A$10,000.

Be alert to unusually large of complex transactions, deals that have no apparent economic or legal purpose and activities involving an unusual pattern of transactions.

Thomas acknowledges the most clients of accountants are “honest people doing an honest business” and that they will require relatively low levels of scrutiny. With more suspicious cases, accountants may have to adopt a risk-based approach that involves enhanced due diligence, such as collecting more KYC information on the customer, obtaining the reason for certain transactions or services, and better understanding the background and financial situation of the customer.

The reports firms submit are one very important piece of the criminal puzzle. AUSTRAC uses many pieces to form a picture of criminal activity.

7. Take advantage of data analytics

Advanced data analytics can assist accounting firms as they seek to detect suspicious or illegal business behaviour. Likewise, Thomas says AUSTRAC is gathering and mining more and more data that allows it to “play back learnings” and risks to businesses.

“We are increasingly using the data that businesses give us to help strengthen those businesses’ fight against crime.”

In the lead-up to 1 July 2026, Thomas says AUSTRAC is committed to assisting accounting firms and other businesses, as they prepare for and adjust to the reforms.

“We don’t expect people to be perfect from day one,” he says, “but what I’d say is that these reforms are trying to solve a real problem. All of us have a responsibility to do everything we can to try to make it hard for criminals to profit from their crimes.”

Listen to CA ANZ’s new podcast, Small Firm, Big Impact Express, for a three-minute overview of what Australian CAs need to do now to prepare for the coming AML/CTF reforms.