AML/CTF Tranche 2 readiness checklist for accountants

Use this checklist to confirm your firm has scoped its designated services, enrolled with AUSTRAC within 28 days, designated a compliance officer, completed an ML/TF risk assessment and policies, and set up CDD, reporting and record keeping.

General information only, not legal or tax advice. Check the current rules against the source before relying on this. Current as at 18 October 2026. Rule numbers refer to the AML/CTF Rules 2025 as compiled at 31 March 2026 (Compilation No. 1, which includes the 2026 Amendment Rules); check legislation.gov.au for any later compilation.

A tick-box checklist for an accounting firm preparing for, or checking, its AML/CTF Tranche 2 obligations. Each item is cited to the Act, the AML/CTF Rules 2025 or AUSTRAC. Work through it with the person who will be, or is, your AML/CTF compliance officer. For the full explanation, read the Tranche 2 guide.

How to use it

Copy the list into your firm's compliance file, tick each item and note the date and who completed it. Keep the completed checklist as part of your AML/CTF records, which AUSTRAC says should generally be kept for 7 years.

1. Scope: are you a reporting entity

List every service the firm provides and compare each one with the nine items in table 6, section 6 of the Act (AUSTRAC, Professional designated services)
Note which services are excluded, such as fees held in trust for your own services, and services that only influence a client's decisions (AUSTRAC, Professional designated services)
Record the date the firm first provided a designated service on or after 1 July 2026
Identify existing clients who are pre-commencement customers under section 36 of the Act

2. Enrolment

Enrolled with AUSTRAC within 28 days of first providing a designated service (typically 29 July 2026 for services from 1 July 2026) (AUSTRAC factsheet)
Process in place to update enrolment details within 14 days of a change (AUSTRAC factsheet)

3. Governance

One or more senior managers nominated to make AML/CTF decisions (AUSTRAC senior managers quick guide)
Governing body (partners or directors) briefed on its oversight role (AUSTRAC factsheet)
Records kept of senior manager approvals (AUSTRAC senior managers quick guide)

4. AML/CTF compliance officer

Individual designated as AML/CTF compliance officer within 28 days of first providing a designated service (Act s 26K)
Employed or engaged at management level (Act s 26J(2)(a))
Has sufficient authority, independence and access to resources and information (Act s 26J(2)(b))
Resident of Australia, where services are provided through an Australian permanent establishment (Act s 26J(3)(a))
Assessed as fit and proper, having regard to the matters in the Rules (Act s 26J(3)(b); Rules 5-14)
Plan in place to designate a replacement within 28 days if the officer stops being eligible (Act s 26K(2))
AUSTRAC notified of the compliance officer within 14 days of designation (Act s 26M). For a newly regulated business the first notice was due by the later of 14 days after enrolment or 29 July 2026 (AUSTRAC, AML/CTF transitional rules 2026)

5. ML/TF risk assessment

Risk assessment covers money laundering, terrorism financing and proliferation financing risk (AUSTRAC factsheet)
Considers the kinds of customers, designated services, delivery channels and countries dealt with (Act s 28(4) factors)
Approved by a senior manager (AUSTRAC senior managers quick guide)
Reviewed AUSTRAC's ML/TF risk indicators for accountants and risk assessment quick guide (AUSTRAC, Accountants)

6. AML/CTF policies

7. Customer due diligence in practice

Every engagement letter flags whether a designated service is included
CDD checklist available for individuals, sole traders, companies, partnerships, trusts and SMSFs (see CDD checklist)
Method for confirming an individual is who they claim to be, such as matching their face to photo ID (AUSTRAC, Initial CDD for individuals)
Sanctions checks against the DFAT Consolidated List (AUSTRAC, Initial CDD for individuals)
Senior manager approval step for foreign PEPs and high-risk domestic or international organisation PEPs (AUSTRAC senior managers quick guide)
Beneficial owners identified using the 25% ownership or control test (Act s 5)

8. Reporting

Internal process for staff to escalate unusual matters to the compliance officer
SMRs lodged within 24 hours for terrorism financing and 3 business days otherwise (AUSTRAC factsheet)
TTRs lodged within 10 business days for physical currency of A$10,000 or more (AUSTRAC factsheet)
Annual compliance report diarised (AUSTRAC factsheet)
Enhanced CDD applied if you continue to act after an SMR obligation arises (Act s 32(b))

9. Tipping off

Staff trained not to disclose SMR information where it could prejudice an investigation (Act s 123)
Any good-faith disclosure made to dissuade a client from an offence is recorded, with reasons (Act s 123(4))

10. Records, training and review

Records of the program and compliance activities kept for 7 years for most obligations (AUSTRAC factsheet)
Steps taken where beneficial owners could not be identified are recorded (Rules 6-8)
Staff training delivered and recorded
Independent evaluation scheduled at least once every three years (AUSTRAC factsheet), with the first one booked by the transitional date for your AUSTRAC account number, between 30 June 2029 and 31 December 2030 (AUSTRAC, AML/CTF transitional rules 2026)
Program reviewed after any significant change to the business or its risks (AUSTRAC factsheet)

Where Nagaris fits

Nagaris includes AML risk assessments and PEP and sanctions screening in every plan, with ID checks at $5 a person and company checks from $9. It handles the client-facing CDD steps. It does not provide legal advice and does not replace your firm's AML/CTF program, which stays your responsibility. See AML/CTF software.

Questions

What is the first step in Tranche 2 readiness?

Compare each service your firm provides with the nine professional designated services in table 6 of section 6 of the AML/CTF Act. If none apply, the obligations do not attach to that work.

Who can be the AML/CTF compliance officer?

An individual at management level with sufficient authority, independence and resources, who is fit and proper and, for services provided in Australia, an Australian resident (Act s 26J).

How often must the AML/CTF program be independently evaluated?

AUSTRAC says in certain circumstances and at least once every three years.

Sources

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Tranche 2 readiness checklist for accounting firms