Many Australian small businesses are now asking whether they fall under Tranche 2, the upcoming expansion of the AML/CTF regime. This guide explains which industries will be included, what activities trigger regulation and how to understand the risk factors that determine whether your business is caught by the reforms. It is written for SMEs that have never had AML obligations before.

Understanding Whether Tranche 2 Applies to You

Tranche 2 will extend AML/CTF obligations to several sectors that have not previously been regulated. Instead of focusing only on traditional financial institutions, the reforms aim to include industries that have been identified as vulnerable to misuse for money laundering or terrorism financing.

The important point for SMEs is that Tranche 2 is based on the type of services you provide, not the size of your business. Even small firms can be captured if the services they offer fall within specific activities related to handling funds, arranging transactions or dealing in high-value goods.

Understanding these activities will help you determine whether your business will be regulated once the reforms begin.

Industries Most Likely to Be Caught Under Tranche 2

AUSTRAC has indicated that the following sectors are expected to be included in the reforms:

  • Real estate agencies involved in buying, selling or managing property
  • Lawyers and conveyancers providing transactional, trust account or company formation services
  • Accountants and bookkeepers who assist with financial transactions or set up client structures
  • Dealers in precious metals, precious stones and certain high-value items
  • Certain professional service providers who facilitate or arrange transactions on behalf of clients

These industries have been highlighted due to their involvement in transactions that can be used, intentionally or unintentionally, to conceal the movement of funds.

If your business falls under one of these categories, you are likely to be caught by Tranche 2 once legislation is finalised.

What Actually Triggers AML/CTF Obligations?

Even within a regulated industry, not every service will automatically create an AML/CTF requirement. What matters is the nature of the activity.

Here are common triggers that may bring an SME under Tranche 2 obligations:

  1. Helping clients transfer, receive or manage funds. This includes paying deposits, handling trust accounts, or arranging payments linked to property or business transactions.
  2. Advising on or facilitating the creation of companies, trusts or business structures. These structures can be used to hide beneficial owners, which is why Tranche 2 places emphasis on transparency.
  3. Managing high-value assets or goods that can be purchased in ways that conceal identity. This is relevant for bullion dealers, jewellery retailers and precious metals traders.
  4. Acting on behalf of a client in a financial or property transaction. Many small legal and accounting practices perform these activities as part of their daily work.

If your business provides any of these services, you will need to consider how Tranche 2 applies to your operations.

Examples to Help SMEs Understand Their Position

Small businesses often underestimate whether their services fall within the new rules. Here are simplified examples to help clarify what being “caught” looks like.

Real estate example: A small real estate agency handling property sales would be affected because it manages transactions that involve large sums of money and ownership transfers.

Accounting example: An accountant who helps clients set up companies or move funds between entities would fall within Tranche 2 due to the financial nature of the activity.

Legal services example: A solicitor who manages a trust account, completes settlements or assists with conveyancing would be captured by the reforms.

High-value goods example: A jewellery store selling items above certain thresholds, particularly with cash or mixed payment methods, may be required to verify customers and report suspicious activity.

These examples show that Tranche 2 affects many everyday business activities rather than only specialised financial services.

What If Tranche 2 Doesn’t Apply to All of My Services?

Some SMEs may only perform occasional higher-risk tasks. In these cases, the obligation usually applies only to the relevant services, not your entire business.

This means you may still need a simple AML/CTF program, even if only a portion of your work falls under the reforms. The aim is to ensure that businesses have controls in place when they handle transactions that could be misused for criminal activity.

Understanding which parts of your business fall within the reforms helps you tailor your compliance program so that it remains proportionate to your operations.

How SMEs Can Prepare Early

Although final legislation is still progressing, SMEs can benefit from preparing early. A few practical steps include:

  • Reviewing which of your services involve handling money, property or high-value assets
  • Mapping where clients rely on you to arrange or facilitate financial transactions
  • Identifying whether you manage any trust accounts
  • Considering how you currently record customer information

These steps help businesses understand their exposure and reduce the uncertainty that usually comes with new regulatory requirements.

Small businesses that start early often find the transition far less disruptive than expected.

How NameScan Supports SMEs Caught by Tranche 2

Many newly regulated businesses will need straightforward and accessible tools to help them verify customers and screen for key risks, including politically exposed persons and sanctions concerns.

NameScan’s pay-as-you-go screening tools provide a practical way for SMEs to meet these requirements. They are designed for businesses that need simple, flexible solutions without long-term commitments or complex onboarding.

These tools help SMEs complete essential checks with clarity and confidence as they prepare for Tranche 2.

FAQs

How do I know for certain if Tranche 2 applies to my business?
If your services involve handling funds, managing transactions or dealing in high-value goods, you are likely included. The final legislation will confirm the scope.

Will Tranche 2 apply to sole traders?
Yes. Tranche 2 focuses on activity, not business size. Sole traders can still be caught.

Do occasional high-risk transactions bring me under the rules?
In many cases they do. Even occasional relevant services may trigger AML/CTF obligations.

Do I need costly software or consultants?
No. Many SMEs use simple tools and templates supported by pay-as-you-go services.

What if I misinterpret the rules?
AUSTRAC typically takes an education-first approach for new reporting entities, especially early in the transition period.

Stay Informed

NameScan will continue sharing updates and practical guidance as Australia moves toward implementing Tranche 2. Understanding whether you are caught by the reforms is the first step in preparing your business for the changes ahead.

Disclaimer: The information provided is general in nature and is not legal advice. Tranche 2 reforms are still progressing, and requirements may change. Before making decisions or taking action, please refer to AUSTRAC’s official guidance or seek independent professional advice.