AUSTRAC Tranche 2 for Conveyancers and Settlement Agents: What You Need to Update

Australian conveyancers and settlement agents now operate under one of the biggest regulatory shifts in a generation. The Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 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 Western Australia’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: an ML/TF risk assessment and AML/CTF policies, covering governance, training, oversight and 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 of $10,000 or more
• 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 applying from 1 July 2026. AUSTRAC enrolment is the first step; full AML/CTF program and reporting obligations have applied since commencement, subject to any transitional relief AUSTRAC has announced. Civil penalties for non-compliance can be up to 100,000 penalty units per contravention for a body corporate.

How an updated Service Agreement helps

Claim Done’s Service Agreement wizard generates an engagement document in about 5 minutes. It includes the AML/CTF disclosures, the ID-verification clauses, the source-of-funds language, and the right to delay or terminate where checks cannot be completed.

$49 flat fee. Sent as a 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 ML/TF risk assessment and AML/CTF policies in place this financial year. The transitional window is short and the penalties are not theoretical.