Australian conveyancers and settlement agents are about to operate under one of the biggest regulatory shifts in a generation. The Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2024 brings “Tranche 2” entities — including conveyancers, settlement agents, lawyers, accountants, real estate agents and dealers in precious stones and metals — squarely under AUSTRAC supervision for the first time.
If you handle real-estate settlements, trust money, or any part of a property transaction for a client, you are a “designated service” provider under the amended Act. That triggers a long list of obligations that your existing client-engagement documents almost certainly do not cover.
Who is caught
- Licensed conveyancers in every state and territory
- Settlement agents (especially WA’s regulated settlement profession)
- Anyone preparing or facilitating a transfer of real property for a client
- Anyone acting as a buyer’s or seller’s agent on a real-estate transaction
- Anyone receiving or transmitting client funds connected to a property settlement
What an AML/CTF program actually means
You will need a written AML/CTF program with two parts: Part A (risk assessment, governance, training, oversight) and Part B (customer due diligence — verifying every client’s identity, beneficial ownership, and source of funds before you act).
- Risk-based identification of every client and any beneficial owner
- Ongoing customer due diligence and trigger-based reviews
- Suspicious matter reports (SMRs) lodged with AUSTRAC
- Threshold transaction reports for cash movements over $10,000
- Record keeping for seven years
- Annual compliance reports to AUSTRAC
What is new vs the existing Tranche 1 obligations
Tranche 1 (banks, money remitters, gambling) has carried these obligations since 2006. Tranche 2 extends them to “gatekeeper” professions whose work is repeatedly exploited in money-laundering cases — the 2024 reforms mirror international FATF recommendations Australia has been criticised for failing to meet for over a decade.
What contracts and documents need updating
- Your client service agreement / engagement letter — must include AML/CTF disclosure, ID-verification consent, source-of-funds enquiries, and your right to delay or refuse acting if checks fail
- Trust account terms — handling instructions for funds where source cannot be verified
- Privacy collection notices — collecting and storing more sensitive ID data
- Subcontractor / referrer agreements — your AML obligations flow down
The deadlines
The Bill received royal assent in late 2024, with Tranche 2 obligations commencing in stages from 1 July 2026. AUSTRAC enrolment is the first step; full AML/CTF program and reporting obligations apply from the commencement date with limited transitional relief. Penalties for non-compliance can reach $22 million per contravention for body-corporate offenders.
How an updated Service Agreement helps
Claim Done’s Service Agreement wizard generates a Tranche 2-ready engagement document in about ten minutes. It includes the AML/CTF disclosures, the ID-verification clauses, the source-of-funds language, the right to delay or terminate where checks cannot be completed, and the file-note record-keeping framework AUSTRAC expects to see at audit.
Flat $79. Sent in DOCX and PDF, ready to use with every new client. The faster you re-paper your client base, the smaller the compliance gap when the obligations bite.
Next step
Update your service agreement now, enrol with AUSTRAC, and put a documented Part A program in place this financial year. The transitional window is short and the penalties are not theoretical.