Company Formation Services
Assisting clients to form companies, trusts or other legal persons—high-risk designated service under AUSTRAC guidance.
Accountants | Tranche 2
Tranche 2 AML Reforms for Accountants
Complete guide to Tranche 2 AML/CTF reforms for accountants. Learn about AUSTRAC designated services, high-risk activities, compliance obligations, and key dates for accounting firms.
Key Information
Accountants: High-Risk Gatekeepers Under AUSTRAC
From 1 July 2026, accountants providing designated services will have comprehensive AML/CTF obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006. AUSTRAC's Money Laundering National Risk Assessment 2024 found services provided by accountants pose a HIGH money laundering risk in Australia.
Why Accountants Are High-Risk
Your expertise can be used to give the impression of respectability and legitimacy to criminal activities. Common money laundering processes involve criminals creating distance between themselves and criminal profits using:
- Business structures and trusts - to hide beneficial ownership
- Third parties and intermediaries - including accountants
- Professional services - for legitimacy and credibility
You may not be aware you are helping criminals - which is why these obligations exist.
AUSTRAC Designated Services for Accountants
You have AML/CTF obligations when providing these services:
- Creating, restructuring or forming body corporates or legal arrangements (companies, trusts, partnerships)
- Acting as director, secretary or trustee of a body corporate or legal arrangement
- Acting as nominee shareholder
- Providing registered office or business address
- Managing money, securities or other property including trust accounts
- Selling shelf companies
- Assisting with corporate transactions (buying/selling body corporates)
Not covered: General accounting, tax preparation, audit services, and financial advice are NOT designated services.
AUSTRAC Risk Indicators for Accountants
Client behaviour red flags:
- Avoids face-to-face meetings, obstructive or secretive
- Appears nervous or defensive when questioned
- Doesn't understand their business sector
- Ends relationship when asked for more information
- Has unusual knowledge of AML/CTF requirements
- Prepared to pay higher fees without clear reasons
Source of Funds Red Flags
- High-value assets with no clear funding source
- Funds that don't match client's financial standing or employment
- Won't identify source of wealth or provides false information
- Companies set up with unknown equity source
- Back-to-back transactions with rapidly increasing values
Complex Arrangement Red Flags
- Requests complex structures to hide beneficial ownership
- Large volumes of company/trust creations at one time
- Use of shell or shelf companies to distance from funds
- Transfers between subsidiaries with no apparent reason
Key Dates
- 31 March 2026: AUSTRAC enrolment opens
- 1 July 2026: AML/CTF obligations commence
- 29 July 2026: Enrolment deadline (within 28 days of first designated service)
Designated Services for Accountants
Managing Client Money
Managing money, securities or other property held in trust accounts—triggers AML/CTF obligations.
Nominee Director/Secretary
Acting as or arranging for others to act as director, secretary or partner of a body corporate.
Registered Office Services
Providing registered office address or business address for companies or trusts.
Trust Administration
Acting as trustee or providing trust administration services for express trusts.
Corporate Transactions
Assisting in planning or execution of transactions to buy, sell or transfer a body corporate.
Key Compliance Obligations
AML/CTF Program
Written policies and procedures to identify, mitigate and manage ML/TF risks. Must be tailored to your practice size and client base.
- • Risk assessment of your services and clients
- • CDD procedures for all designated services
- • Ongoing customer due diligence processes
- • Staff training requirements
Suspicious Matter Reporting
Report to AUSTRAC when you suspect a customer or transaction involves money laundering or terrorism financing.
- • Report within 24 hours for terrorism concerns
- • Report within 3 days for other suspicions
- • Tipping off clients about SMRs is prohibited
- • Legal protection for good-faith reports
Record Keeping (7 Years)
Maintain records of all AML/CTF compliance activities, customer identification, and transaction records.
- • Customer identification documents
- • Transaction records and file notes
- • AML/CTF program documentation
- • Staff training records
Key Dates
- 31 March 2026: AUSTRAC enrolment opens
- 1 July 2026: AML/CTF obligations commence
- Within 28 days: Enrol after providing first designated service
- Every 2 years: Independent review of AML/CTF program
Frequently asked questions
Which accounting services trigger AML/CTF obligations?
Designated services include: assisting clients to form companies/trusts, managing money or property, acting as or arranging nominee directors/secretaries, providing registered office addresses, trust administration, and assisting with corporate transactions. General accounting, tax preparation and audit services are NOT designated services.
Why are accountants considered high-risk by AUSTRAC?
AUSTRAC's national risk assessment identifies accountants as 'gatekeepers' whose services can be misused to establish corporate structures, manage finances, and provide legitimacy to criminal operations. Their trusted professional status makes them attractive to money launderers.
What Customer Due Diligence is required?
You must verify customer identity before providing designated services, identify beneficial owners of companies and trusts, determine if customers are PEPs, understand the purpose and nature of the business relationship, and apply enhanced due diligence for high-risk customers.
What reports must accountants submit to AUSTRAC?
Suspicious Matter Reports (SMRs) when you suspect money laundering or terrorism financing. Unlike financial institutions, accountants are not required to submit Threshold Transaction Reports (TTRs) for cash transactions over $10,000.
What if I only occasionally provide designated services?
If you provide any designated service—even occasionally—you must enrol with AUSTRAC and comply with AML/CTF obligations for those services. The volume of services doesn't exempt you from compliance.
How should I document source of funds?
Obtain documentation showing legitimate origin of client funds: bank statements, loan documents, sale contracts, inheritance records, or employment records. The level of verification should match the ML/TF risk level of the customer and transaction.
CDD Solutions for Accounting Firms
ARCaml automates customer due diligence so you can focus on serving clients while meeting AUSTRAC requirements.