Preparing For AUSTRAC Tranche 2 AML/CFT (Pre-March 31st)

Category

Likely Captured Under AU Tranche 2?

Law firms with trust accounts

✅ Yes – Handling client funds is a key AML risk

Conveyancing / Property Lawyers

✅ Yes – Involves high-value transactions

Corporate / Business Lawyers

✅ Yes – If assisting with company formation, trust setup, or structuring

Estate Planning & Trust Lawyers

✅ Yes – If managing trusts, acting as trustee, or handling client assets

Litigation & Dispute Resolution Lawyers

✅ Yes – If managing client funds or settlements

Family Lawyers

✅ Yes – If handling property settlements or financial arrangements

Criminal Lawyers

❌ No – Generally not handling client funds in transactions

Employment Lawyers

❌ No – Typically does not involve financial transactions

In-house Counsel

❌ No – Does not provide services to the public

Barristers

❌ No – Do not handle client funds

Government Lawyers

❌ No – Work for the government, not private clients

Aspect

Australia (Tranche 2 - 2026)

New Zealand

UK (England & Scotland)

Ireland

South Africa

Law Firms Covered?

✅ Yes (from July 1, 2026)

✅ Yes

✅ Yes (since 2007, expanded in 2017)

✅ Yes (since 2010)

✅ Yes (since 2001)

Customer Due Diligence (CDD)?

✅ Yes (from July 1, 2026)

✅ Yes

✅ Yes

✅ Yes

✅ Yes

Enhanced Due Diligence (EDD) for PEPs?

✅ Yes

✅ Yes

✅ Yes

✅ Yes

✅ Yes

Ongoing Monitoring of Clients?

✅ Yes

✅ Yes

✅ Yes

✅ Yes

✅ Yes

Suspicious Activity Reports (SARs)?

✅ Yes (to AUSTRAC)

✅ Yes (to FIU)

✅ Yes (to NCA)

✅ Yes (to FIU)

✅ Yes (to FIC)

Threshold Transaction Reports (TTRs)?

✅ Yes ($10,000+)

❌ No

❌ No

❌ No

✅ Yes (R25,000+)

Independent Audits?

✅ Yes (from 2026)

✅ Yes

✅ Yes

✅ Yes

✅ Yes

Risk-Based AML Programs?

✅ Yes

✅ Yes

✅ Yes

✅ Yes

✅ Yes

Pre-Existing Clients Require CDD?

✅ Yes (from July 1, 2026, risk-based)

✅ Yes (risk-based)

✅ Yes (risk-based)

✅ Yes (risk-based)

✅ Yes (risk-based)

Regulator

AUSTRAC

DIA

SRA / LSRA / Law Society of Scotland

Law Society of Ireland

FIC (Financial Intelligence Centre)

Date of Coverage for Law Firms?

From July 1, 2026

Since 2018

Since 2007 (Strengthened in 2017)

Since 2010

Since 2001

Requirement

ARNECC VOI*

Tranche 2 CDD

Primary Focus

Verification of Identity (VOI) for property transactions

Customer Due Diligence (CDD) for AML/CTF compliance

Regulatory Body

ARNECC (state-based)

AUSTRAC (federal)

Primary Verification Method

Face-to-face with a legally authorized Identity Agent*

Remote or face-to-face, using risk-based measures

Remote Verification

Allowed* if face-to-face is not possible due to remoteness

Always permitted with risk mitigation

Who It Applies To

Lawyers, conveyancers, mortgagees involved in property transactions

Lawyers, accountants, real estate agents, and other designated professions under Tranche 2 AML

Identity Documents Required

Set categories based on Model Participation Rules (MPR)

Risk-based approach, identity must be verified per AML/CTF standards

Services

Should the Same Vendor Do It?

Establishing AML/CTF Compliance Program & Staff Training

✅ Yes, same vendor allowed

AML/CTF Independent Audit & Compliance Program Setup

❌ No, independence required

AML/CTF Independent Audit & Staff Training

❌ No, independence required

Date

Requirement

March 31, 2026

Risk assessment & AML/CTF compliance policy must be completed.

July 1, 2026

Tranche 2 AML/CTF obligations fully in effect & enforced by AUSTRAC.