AUSTRAC Tranche 2 for Trust and Company Service Providers

Trust and company service providers (TCSPs) — accountants, corporate-services firms, formation agents, nominee directors and registered-office providers — are one of the most-targeted Tranche 2 sectors in the Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024. From 1 July 2026, they sit fully inside AUSTRAC’s supervisory net.

The reasoning is straightforward: shell companies, opaque trust structures and nominee arrangements are the workhorse vehicles in modern money-laundering cases. The reforms close a gap Australia has been criticised for since 2015.

Who is caught

• Anyone forming or registering companies for clients
• Anyone acting as (or arranging) a director, secretary or trustee
• Anyone providing a registered office or business address
• Anyone acting as nominee shareholder or trustee
• Anyone providing trust set-up and administration services

What an AML/CTF program means

• Verify the identity AND beneficial ownership of every client (the human at the end of the chain)
• Risk-rate engagements (offshore beneficial owners, complex layering, PEPs)
• Ongoing CDD and trigger-based reviews when structures change
• Suspicious matter reports to AUSTRAC within 3 business days (24 hours for terrorism financing)
• Seven-year record retention covering ID, structure charts and engagement files
• Annual compliance reporting plus an ML/TF risk assessment and AML/CTF policies

What is new vs Tranche 1

Tranche 1 covered banks, casinos and money remitters. Tranche 2 brings in the gatekeepers — and TCSPs are the gatekeepers most cited in international laundering typologies. The practical lift is significant: beneficial-ownership checks down to ultimate human owners are not what existing client onboarding usually catches.

What contracts and documents need updating

• Engagement / service agreements — AML/CTF disclosure, ID and beneficial-ownership consent, source-of-funds clauses, refusal rights
• Trustee and nominee director appointments — additional due diligence and removal triggers
• Registered-office and mail-handling terms — termination triggers tied to AML risk
• Privacy notices — handling and storage of sensitive ID and structural data
• Subcontractor and referrer agreements — AML flow-down

The deadlines and penalties

Commencement 1 July 2026. AUSTRAC enrolment first; full AML/CTF program and reporting obligations from commencement. Civil penalties up to 100,000 penalty units per contravention for a body corporate, with significant personal liability for principals.

How an updated Service Agreement helps

Claim Done’s Service Agreement generates an engagement document in about 5 minutes — AML/CTF disclosures, beneficial-ownership consent, source-of-funds clauses and the right to delay or refuse where checks fail. $49 flat fee, delivered as a PDF.

Next step

Enrol, prepare your ML/TF risk assessment and AML/CTF policies, re-paper engagement letters, and document beneficial-ownership checks now, if you have not already.