In less than two weeks, the largest expansion of Australia's anti-money laundering and counter-terrorism financing (AML/CTF) regime in nearly two decades takes effect. From 1 July 2026, the so-called "Tranche 2" reforms bring lawyers, conveyancers, accountants, real estate professionals, trust and company service providers, and dealers in precious metals and stones into the regulatory net for the first time. AUSTRAC, the federal financial intelligence agency, estimates the change will create between 80,000 and 90,000 new reporting entities — many encountering AML/CTF obligations for the first time.

The reforms flow from amendments to the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) (the AML/CTF Act) passed in December 2024, and bring Australia closer into line with the international standards set by the Financial Action Task Force (FATF). Enrolment with AUSTRAC opened on 31 March 2026, and newly regulated businesses have until 29 July 2026 to complete it. But the substantive obligations — having a programme, conducting due diligence, keeping records — switch on at commencement on 1 July, regardless of when a firm enrols.

The regime regulates services, not "lawyers"

A point that AUSTRAC and the state law societies have laboured to communicate is that the Act does not regulate the legal profession as a whole. It regulates a defined subset of activity. Whether a practice is captured turns entirely on whether it provides one or more "designated services" set out in the new professional services table at subsection 6(5B) of the Act — referred to as Table 6.

Table 6 lists nine items relevant to legal work, including assisting clients to buy, sell or transfer real estate; assisting with the purchase or sale of entities or legal arrangements; receiving, holding, controlling or managing client property in connection with a transaction; assisting with equity or debt financing; selling shelf companies; creating or restructuring entities; acting as (or arranging) a director, trustee or nominee shareholder; and providing a registered office address. According to the Law Society of NSW, the distinction often comes down to whether the work directly advances a transaction. Strategic advice, background analysis, or advice on a past transaction will generally fall outside the regime, while acting on instructions to move money, transfer property or create a structure will generally fall inside it — and obligations can attach to preparatory steps taken before a transaction completes.

What captured firms must have in place

A captured practice must, by 1 July, have appointed an AML/CTF compliance officer and developed a written AML/CTF programme. The programme centres on a documented risk assessment weighing the firm's exposure across its services, client types, jurisdictions and delivery channels, plus policies and processes governing customer due diligence (CDD), ongoing monitoring and reporting. Mixed practices that provide both legal and conveyancing services must maintain two separate risk assessments.

Some relief is available through the Anti-Money Laundering and Counter-Terrorism Financing Transitional Rules 2026, last updated by AUSTRAC on 30 March 2026. Firms enrolled on 30 March 2026 may continue using applicable customer identification procedures (ACIP) for nominated customer classes until as late as 31 March 2029, provided their transitional policies are documented by 1 July 2026. The rules also extend the compliance-officer notification deadline and stagger the first independent programme evaluation. Crucially, the new ongoing CDD obligations apply from 31 March 2026, and the transitional concessions do not delay the core obligation to have a programme in place at commencement.

AUSTRAC's Starter Kits ease the burden — to a point

To help smaller firms, AUSTRAC has published sector-specific Program Starter Kits, including a Legal Profession Starter Kit and a Conveyancing Starter Kit — described as the first of their kind globally. The kits provide customisable building blocks — a risk assessment framework, policy and process templates and operational forms — for low-complexity practices of 15 or fewer personnel that do not regularly handle high-risk clients or complex cross-border work. They are not one-size-fits-all: larger or higher-risk firms can use them as a base but must justify and build on them to meet AUSTRAC's expectations. For firms managing this transition, technology that structures client risk assessment, identity verification and record-keeping — workflows Legl helps law firms operate — can reduce the manual overhead of a first AML/CTF programme.

Key takeaways for compliance officers

• Commencement is 1 July 2026. Enrolment can run to 29 July 2026, but substantive obligations begin at commencement regardless of enrolment date.
• Map your services against Table 6. Capture turns on designated services that directly advance a transaction — include one-off, low-volume and unbilled work.
• Have the essentials ready: an appointed compliance officer, a documented risk assessment, and a written two-part AML/CTF programme. Mixed legal-and-conveyancing practices need two risk assessments.
• Use the transitional rules deliberately. ACIP may continue for nominated customer classes until 31 March 2029, but only if your transitional policies are documented by 1 July 2026.
• Document your reasoning even if you conclude you are out of scope — AUSTRAC expects a defensible record.

Looking ahead

With commencement days away, attention shifts from preparation to AUSTRAC's supervisory posture. The regulator has signalled an initial focus on education and support rather than immediate enforcement, but that goodwill is unlikely to extend to firms that made no attempt to assess whether they are captured. Compliance officers should watch for further sector-specific guidance and any clarification of the Table 6 boundaries as real-world matters test where advisory work ends and a designated service begins.

Sources

• Law Society of NSW — Understanding designated services: when legal services trigger Tranche 2 AML/CTF obligations
• Law Society Journal — AML/CTF Tranche 2 Reforms: introducing AUSTRAC's Program Starter Kits
• AUSTRAC — AML/CTF Transitional Rules 2026 guidance
• AUSTRAC — Legal Profession Program Starter Kit
• Norton Rose Fulbright — Tranche 2 and AML/CTF Reforms Hub

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