AUSTRAC Tranche 2: What Australian Accountants Need to Know About New KYC and AML Obligations

Australia's anti-money laundering framework just got its biggest overhaul in two decades. The Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2024, passed on 29 November 2024, introduces what's known as AUSTRAC Tranche 2 — and it's about to transform how Australian accountants onboard new clients.

Starting 1 July 2026, accountants, lawyers, real estate agents, and other designated non-financial businesses must comply with the same KYC (Know Your Customer), KYB (Know Your Business), and AML (Anti-Money Laundering) obligations that banks and financial institutions have followed since 2006.

If you're an Australian accounting firm, here's everything you need to know — and how to prepare without breaking the bank.

Why Is This Happening Now?

Australia was the last major FATF member country not to extend AML obligations to professional gatekeepers like accountants and lawyers. Criminals have long exploited these sectors to launder money through company structures, trust arrangements, and financial transactions — all without the same scrutiny that banks apply.

Tranche 2 closes this gap by bringing approximately 90,000 new reporting entities into AUSTRAC's regulatory scope.

What Services Trigger Compliance for Accountants?

Not every accounting service falls under Tranche 2. The obligations apply when accountants provide designated services, including:

• Managing client money or assets — handling funds, investment portfolios, or financial accounts on behalf of clients
• Creating or managing trusts and companies — setting up business entities, nominee arrangements, or corporate structures
• Buying or selling business entities — facilitating acquisitions, mergers, or transfer of company ownership
• Handling real estate settlement transactions — managing funds in property transactions
• Tax advisory involving financial structuring — when the advice relates to structures that could be used for money laundering

If your firm provides any of these services, you're in scope.

What Exactly Do Accountants Need to Do?

Customer Due Diligence (CDD)

For every new client, you'll need to:

1. Verify identity — Confirm who the person is using reliable, independent sources (government databases, accredited digital verification platforms)
2. Identify beneficial owners — For business clients, determine who ultimately owns or controls the entity (KYB)
3. Understand the relationship — Document the purpose and intended nature of the business relationship
4. Conduct risk profiling — Assess each client's money laundering/terrorism financing risk level

Enhanced due diligence is required for high-risk clients, while simplified processes may apply for low-risk scenarios.

Ongoing Monitoring

Verification isn't a one-time event. You must also:

• Monitor transactions and client behaviour for suspicious activity
• Update customer risk profiles when circumstances change
• Re-verify identification information periodically
• Report suspicious matters (SMRs) to AUSTRAC
• Report threshold transactions over AUD $10,000

AML/CTF Program

Every firm needs a documented compliance program that includes:

• A written ML/TF risk assessment specific to your practice
• An appointed AML/CTF compliance officer
• Employee training and awareness programs
• Independent compliance reviews
• Record keeping for at least 7 years

Key Dates

Date	What Happens
31 January 2026	AUSTRAC releases sector-specific guidance
31 March 2026	Enrolment opens for new reporting entities
1 July 2026	Full compliance obligations begin
29 July 2026	Final enrolment deadline (penalties apply after this)

The Penalties Are Serious

Non-compliance isn't just a slap on the wrist:

• Corporations: Up to AUD $33 million per contravention
• Individuals: Up to AUD $6.6 million per contravention
• Failure to enrol: AUD $18,780/day for corporations, AUD $3,756/day for individuals

AUSTRAC can also issue infringement notices, remedial directions, enforceable undertakings, and civil penalty orders through the Federal Court.

The Challenge: Cost and Complexity

For accounting firms that have never had to perform identity verification, the prospect of building a compliance infrastructure from scratch can feel overwhelming. Traditional KYC providers charge anywhere from $1 to $5 per verification, with minimum commitments and lengthy contracts. For a mid-sized firm onboarding hundreds of clients per year, that adds up fast.

And it's not just cost — it's complexity. You need document verification across multiple ID types, biometric liveness checks, beneficial ownership verification for business clients, and ongoing AML screening. Stitching together multiple vendors for each piece creates operational headaches and compliance gaps.

How Didit Helps Accountants Comply — At a Fraction of the Cost

This is exactly the problem Didit was built to solve. As an identity verification platform purpose-built for scale and affordability, Didit offers Australian accountants everything they need for Tranche 2 compliance:

Complete KYC/KYB in one platform:

• Document verification — 14,000+ document types across 220+ countries, powered by AI
• Biometric liveness detection — Prevents fraud with real-time facial verification
• AML screening — 1,000+ global watchlists, PEP lists, and sanctions databases
• Ongoing monitoring — Continuous screening, not just at onboarding
• Business verification (KYB) — Verify companies, trusts, and beneficial ownership structures

Why accountants choose Didit:

• $0.30 per verification — 3-5x cheaper than competitors like Jumio, Onfido, or Veriff
• No minimums, no contracts — Pay only for what you use
• 500 free verifications per month — Start testing before July 2026 at zero cost
• 48+ languages supported — Verify clients regardless of their document language
• API and no-code options — Integrate into your existing workflow or use the business console directly

For a firm verifying 200 new clients per month, that's $60/month with Didit versus $200-$1,000/month with legacy providers. And you get full document verification, biometrics, and AML screening included — not as separate add-ons.

Getting Started Before July 2026

The smartest move is to start now. With AUSTRAC's sector-specific guidance already published and enrolment opening in March 2026, firms that wait until June will be scrambling.

Here's a simple action plan:

1. Assess your exposure — Identify which of your services fall under Tranche 2
2. Appoint a compliance officer — This person will own your AML/CTF program
3. Set up identity verification — Sign up for Didit's free plan and start testing with your 500 free monthly checks
4. Document your program — Write your risk assessment, policies, and procedures
5. Train your team — Ensure all staff understand the new obligations

Conclusion

AUSTRAC Tranche 2 is a major shift for Australian accounting firms, but it doesn't have to be a costly or complex one. With the right identity verification partner, you can meet your new KYC, KYB, and AML obligations efficiently — and at a price point that makes compliance a no-brainer.

Get started with Didit for free and be ready well before the July 2026 deadline.