Are Accountants Now Regulated Under Australia’s AML/CTF Laws?

Yes – but only for specific work. Tranche 2 of Australia’s AML/CTF reforms took effect on 1 July 2026, and accountants who provide one or more designated services under the AML/CTF Act are now reporting entities. Examples include assisting with company or trust formation, managing client money or assets where this forms part of a designated service, and other professional designated services set out in the legislation.

General tax return preparation, standard bookkeeping and routine advisory work are not designated services in themselves and do not, on their own, trigger AML/CTF obligations.

That distinction matters more than almost anything else in this article. Much of the confusion since 1 July has come from accountants assuming the entire profession is now regulated – or conversely assuming none of it is. Neither is correct. The obligation attaches to specific designated services, not to the professional title ‘accountant’. NameScan’s guide to designated services explains this framework in more detail.

Which Accounting Services Are Now Designated Services?

Tranche 2 regulates designated services, not accounting as a profession. Whether your firm falls within the AML/CTF regime depends on the activities it performs for clients rather than the services described on your website or engagement letter.

Examples of designated services provided by accountants include:

  • Planning or executing the creation, operation, management or restructuring of a company, trust or other legal arrangement on behalf of a client
  • Managing client money, accounts, securities or other assets where this forms part of a designated service under the AML/CTF Act
  • Organising or executing equity or debt financing arrangements on behalf of a client where these activities constitute designated services
  • Assisting with changes to ownership or control structures, including identifying and implementing beneficial ownership arrangements where captured under the Act

In practice, many accounting firms will have a mixture of engagements – some that involve designated services and others that do not. General taxation, bookkeeping and many advisory engagements remain outside the expanded AML/CTF regime unless they include one or more designated services.

If none of these examples describe the specific engagement, that piece of work may sit outside Tranche 2’s designated services regime. Many accounting firms will have a mix of engagements: some that involve designated services and others that remain outside the expanded AML/CTF framework. The practical approach is to assess each engagement against AUSTRAC’s designated services guidance, rather than treating every client interaction as automatically regulated. General advice, routine tax return preparation and standard bookkeeping do not, on their own, trigger Tranche 2 obligations unless they directly form part of, or advance, a designated service.

The practical approach is therefore to assess each engagement individually, rather than assuming every client relationship is either wholly regulated or wholly exempt. A client for whom you only prepare annual tax returns will not generally trigger designated-service obligations. The same client asking you to establish a trust or restructure a company may trigger AML/CTF obligations for that particular engagement.

Client Due Diligence for Company and Trust Formation

Customer due diligence (CDD) involves verifying a client’s identity and assessing money laundering and terrorism financing risks before – and throughout – the provision of a designated service.

For accountants providing designated services, CDD should be completed before the designated service is provided, rather than after a structure has been established or client funds have already been managed.

For company and trust formation work, initial customer due diligence typically includes:

  1. Verifying the identity of the instructing client using reliable and independent documentation or electronic verification methods.
  2. Identifying the beneficial owners of any company, trust or other legal arrangement involved, including the individuals who ultimately own or control the structure.
  3. Screening clients and identified beneficial owners against sanctions lists, politically exposed person (PEP) databases and adverse media sources to identify higher-risk customers requiring enhanced due diligence.
  4. Assessing and documenting ML/TF risk, applying enhanced due diligence where the client, ownership structure or jurisdiction presents elevated risk.

Where an engagement involves managing client money or other assets as part of a designated service, the same customer due diligence should be completed before providing that designated service, rather than retrospectively after funds have already been handled.

Customer due diligence also continues throughout the engagement. A new beneficial owner, a significant change in ownership structure, an unexplained change in funding source, or new sanctions or adverse media involving an existing client should all feed back into your firm’s ongoing risk assessment.

Manually screening every client and beneficial owner across sanctions, PEP and adverse media databases can quickly become resource-intensive for firms that regularly undertake company formations alongside traditional accounting work. NameScan’s screening API combines sanctions, PEP and adverse media screening into a single pay-as-you-go workflow, allowing firms to integrate customer due diligence directly into engagement onboarding for designated services.

Reporting Obligations From Today

Accountants providing designated services may be required to submit a Suspicious Matter Report (SMR) where they form the requisite suspicion under the AML/CTF Act that a client instruction, transaction or attempted transaction may be linked to money laundering, terrorism financing or another relevant offence. Where required, reports must be submitted to AUSTRAC within the applicable statutory timeframes.

This obligation sits alongside the requirement to maintain records of customer identification, beneficial ownership findings, risk assessments and designated services provided for seven years, allowing both AUSTRAC and your firm’s compliance function to reconstruct the due diligence undertaken for an engagement if required.

Every firm providing designated services must also appoint an AML/CTF compliance officer and notify AUSTRAC of that appointment by the later of 29 July 2026 or 14 days after enrolment with AUSTRAC. If your firm has not yet formally assigned this role, it should be treated as a priority alongside the implementation of your broader AML/CTF program.

If You Haven’t Enrolled With AUSTRAC Yet

AUSTRAC opened enrolment for newly regulated entities on 31 March 2026. Businesses that begin providing designated services from 1 July 2026 must enrol within 28 days of commencing those services.

If your firm is already providing designated services and has not yet enrolled, enrolment should be completed as soon as possible. NameScan’s step-by-step guide to enrolling with AUSTRAC walks through the full process.

The priority actions are:

  • Confirm which legal entity within your business structure needs to enrol, depending on how designated services are provided.
  • Complete AUSTRAC enrolment without waiting for every element of your AML/CTF program to be finalised. Enrolment and implementation of your AML/CTF program can progress in parallel.
  • Implement a documented, risk-based AML/CTF program, appoint an AML/CTF compliance officer, and notify AUSTRAC of that appointment by the later of 29 July 2026 or 14 days after enrolment with AUSTRAC.
  • Begin customer due diligence immediately for new engagements involving designated services while completing any remaining implementation work and documentation.

AUSTRAC has indicated that it expects newly regulated businesses to actively engage with their AML/CTF obligations from commencement. A firm that has implemented a genuine risk-based AML/CTF program and is taking meaningful steps towards compliance is in a materially different position from one that has taken no meaningful action.

Frequently Asked Questions (FAQ)

Does Tranche 2 apply to all accountants in Australia?

No. Tranche 2 applies only where an accountant provides one or more designated services under the AML/CTF Act. Examples include assisting with company or trust formation, managing client money or assets where this forms part of a designated service, and certain other professional services specified in the legislation. General tax return preparation, routine bookkeeping and standard advisory services do not, by themselves, trigger AML/CTF obligations.

Do I need to run AML/CTF checks on every client, even for tax return work?

Not necessarily. Customer due diligence obligations apply when you provide a designated service, rather than to every client relationship. A client for whom you only prepare annual tax returns will not generally require AML/CTF customer due diligence. If that same client later engages you to provide a designated service, such as establishing a trust or restructuring a company, the relevant AML/CTF obligations apply to that engagement.

What happens if my firm hasn’t enrolled with AUSTRAC yet?

If your firm is providing designated services and has not completed enrolment within the required timeframe, enrolment should be completed as soon as possible. At the same time, your firm should continue implementing its documented AML/CTF program, appoint an AML/CTF compliance officer and begin customer due diligence for new designated services.

What’s the deadline to appoint a compliance officer?

Businesses providing designated services must notify AUSTRAC of their appointed AML/CTF compliance officer by the later of 29 July 2026 or 14 days after enrolment with AUSTRAC. The compliance officer should already be performing the role in practice, as the underlying AML/CTF obligations apply from the time designated services are provided.