What you need to know about AUSTRAC’s core guidance release

AUSTRAC have released core guidance around the Tranche 2 rules that will be coming into play in July 2026. This reform is the next step in Australia's Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) regulations. For businesses in real estate, legal, accounting, trust and company service providers, and (dealers of) precious metals and stones, these reforms mean one thing: new compliance obligations are coming fast, and non-compliance could mean penalties, lost business, or reputational damage.

We recently released an overview of Australia’s Tranche 2 reforms – what is changing and the key requirements for Tranche 2 entities. We covered key aspects involved in AML checks from CDD, EDD, to PEPs –as well as a breakdown on what all the acronyms mean. Read on to learn what your obligations are from the core guidance release.

What are your key requirements?

AUSTRAC’s core guidance provides a foundational framework for regulated entities under the rule changes. It moves away from prescriptive compliance toward outcome driven governance and requires you to demonstrate that your business’ programmes work in practice.

Your main obligations are:

1. Programme design & risk assessment

• Conduct and document a formal AML/CTF programme and risk assessment, that’s tailored to your business
• Ensure your programme adapts to business changes and emerging risks
• Make sure this programme is followed by your employees (audits will look for evidence your programme is adhered to)
• You may be required to submit regular compliance reports to AUSTRAC showing how you meet your obligations. AUSTRAC will notify you when this needs to happen.

2. Governance & accountability

• Obtain senior management and board sign-off on your AML/CTF programme
• Obtain senior management approval on high risk customers (e.g. Foreign PEPs)
• Appoint a dedicated AML/CTF Compliance Officer
• Establish clear reporting lines and escalation procedures

3. Customer Due Diligence (CDD)

• Perform CDD before providing designated services
• Maintain ongoing monitoring of customer activity
• Update your customer profiles based on risk triggers or new information, especially if your client/customer is a PEP (politically exposed person)

4. Risk Rating & Monitoring

• Assign customer risk ratings during initial CDD using documented, consistent criteria
• Review and update ratings periodically or when risk changes
• Use ratings to inform transaction monitoring and escalation

5. Enhanced Due Diligence (EDD)

• Identify high-risk customers (e.g. PEPs, complex structures)
• Conduct source of wealth and source of funds checks
• Document EDD decisions and escalation outcomes

6. Designated Services Assessment

• Determine if your actions directly advance a transaction
• Register with AUSTRAC if providing designated services
• Maintain service logs and client engagement records

At a glance, this may feel overwhelming, but if you put the right AML compliance technology in place from the very beginning you can keep your business compliant with confidence. APLYiD can help streamline your processes with no-nonsense onboarding, ID verification checks, record keeping and risk assessment made easy.

A short timeline of Tranche 2 key dates so far:

• October 2024 - The Anti-money laundering and Counter Terrorism Financing Amendment Bill 2024 passed in Parliament
• December 2024 - February 2025 - The first round of consultation for the proposed AUSTRAC rules
• March 2025 - Changes to tipping off offences
• May 2025 - Second round rules consultation
• August 2025 - AML/CTF rules were finalised
• October 2025 - just released - Core guidance

What's coming up?

January 2026

At the end of January, sector specific guidance will be released that will help businesses plan for the AML/CTF programme.

• The starter kits will be most beneficial for smaller and less complex businesses.
• The kits will help to build templates for compliance policies and risk assessments.

During New Zealand’s Phase 2 AML/CFT reforms we found that the guidance materials provided by supervisors were not a one-size-fits-all solution. So, you may need to take a more bespoke approach. Our team can help if you need further guidance.

31 March 2026

March 2026 is the next big milestone: enrolment for Tranche 2 entities opens, which applies to:

• Accounting services
• Real estate and conveyancing services
• Legal firms, trust and company service providers
• Dealers in precious metals and stones

You must enrol by 29 July 2026 to avoid penalties.

1 July 2026

The AML/CTF obligations formally take effect for all Tranche 2 entities.

Start planning now to get ahead of the Tranche 2 reforms

If you want to hit the ground running, start by identifying the existing policies and procedures in your business that may already align with AML/CTF obligations. Your business may already have policies and procedures in place that support the upcoming changes.

1. Develop an AML/CFT programme (detail your policies, procedures, systems, and controls to mitigate and manage these identified risks).
2. Develop a Risk Assessment (to identify the ML/TF risks the specific business faces, considering its size, nature, and complexity).
3. Appoint a Compliance Officer (as part of the AUSTRAC registration process & to oversee the AML/CTF programme).

How APLYiD makes Tranche 2 compliance simple:

• No worries for you – A world class ISO-accredited AML platform that makes AML compliance complete, visible and auditable. Onboard, verify, and reverify clients and businesses, assess and manage risk – all in one place.
• Protect against fraud with biometric KYC and AML – our clever platform allows you to onboard a business, trust, or individual — face-to-face or remotely.
• Lightning-fast KYC and AML – Our people-first onboarding flows feature fast, automated, non-intrusive checks with results in less than 90 seconds. APLYiD gives you a world-class AML platform with PEP checks, including sanction checks, and more.
• Gives you confidence – Our no-nonsense AML platform lets you manage all your AML compliance, for every client, from start to finish. APLYiD self-serve platform makes AML as painless as possible for you and your clients.
• Builds trust - Our branded workflows and client-friendly process build trust from day one – creating stronger relationships from the start.

Tranche 2 is moving quickly, and businesses that wait risk scrambling to catch up or may face non-compliance. APLYiD helps you smoothly onboard your clients, simplify compliance, and stay audit-ready – so you can focus on running your business, not chasing paperwork.