Many Australian small businesses are now asking whether they fall under Tranche 2, the upcoming expansion of the AML/CTF regime. This guide explains which industries will be included, what activities trigger regulation and how to understand the risk factors that determine whether your business is caught by the reforms. It is written for SMEs that have never had AML obligations before.
\nTranche 2 will extend AML/CTF obligations to several sectors that have not previously been regulated. Instead of focusing only on traditional financial institutions, the reforms aim to include industries that have been identified as vulnerable to misuse for money laundering or terrorism financing.
\nThe important point for SMEs is that Tranche 2 is based on the type of services you provide, not the size of your business. Even small firms can be captured if the services they offer fall within specific activities related to handling funds, arranging transactions or dealing in high-value goods.
\nUnderstanding these activities will help you determine whether your business will be regulated once the reforms begin.
\nAUSTRAC has indicated that the following sectors are expected to be included in the reforms:
\nThese industries have been highlighted due to their involvement in transactions that can be used, intentionally or unintentionally, to conceal the movement of funds.
\nIf your business falls under one of these categories, you are likely to be caught by Tranche 2 once legislation is finalised.
\nEven within a regulated industry, not every service will automatically create an AML/CTF requirement. What matters is the nature of the activity.
\nHere are common triggers that may bring an SME under Tranche 2 obligations:
\nIf your business provides any of these services, you will need to consider how Tranche 2 applies to your operations.
\nSmall businesses often underestimate whether their services fall within the new rules. Here are simplified examples to help clarify what being “caught” looks like.
\nReal estate example: A small real estate agency handling property sales would be affected because it manages transactions that involve large sums of money and ownership transfers.
\nAccounting example: An accountant who helps clients set up companies or move funds between entities would fall within Tranche 2 due to the financial nature of the activity.
\nLegal services example: A solicitor who manages a trust account, completes settlements or assists with conveyancing would be captured by the reforms.
\nHigh-value goods example: A jewellery store selling items above certain thresholds, particularly with cash or mixed payment methods, may be required to verify customers and report suspicious activity.
\nThese examples show that Tranche 2 affects many everyday business activities rather than only specialised financial services.
\nSome SMEs may only perform occasional higher-risk tasks. In these cases, the obligation usually applies only to the relevant services, not your entire business.
\nThis means you may still need a simple AML/CTF program, even if only a portion of your work falls under the reforms. The aim is to ensure that businesses have controls in place when they handle transactions that could be misused for criminal activity.
\nUnderstanding which parts of your business fall within the reforms helps you tailor your compliance program so that it remains proportionate to your operations.
\nAlthough final legislation is still progressing, SMEs can benefit from preparing early. A few practical steps include:
\nThese steps help businesses understand their exposure and reduce the uncertainty that usually comes with new regulatory requirements.
\nSmall businesses that start early often find the transition far less disruptive than expected.
\nMany newly regulated businesses will need straightforward and accessible tools to help them verify customers and screen for key risks, including politically exposed persons and sanctions concerns.
\nNameScan’s pay-as-you-go screening tools provide a practical way for SMEs to meet these requirements. They are designed for businesses that need simple, flexible solutions without long-term commitments or complex onboarding.
\nThese tools help SMEs complete essential checks with clarity and confidence as they prepare for Tranche 2.
\nHow do I know for certain if Tranche 2 applies to my business?
If your services involve handling funds, managing transactions or dealing in high-value goods, you are likely included. The final legislation will confirm the scope.
Will Tranche 2 apply to sole traders?
Yes. Tranche 2 focuses on activity, not business size. Sole traders can still be caught.
Do occasional high-risk transactions bring me under the rules?
In many cases they do. Even occasional relevant services may trigger AML/CTF obligations.
Do I need costly software or consultants?
No. Many SMEs use simple tools and templates supported by pay-as-you-go services.
What if I misinterpret the rules?
AUSTRAC typically takes an education-first approach for new reporting entities, especially early in the transition period.
NameScan will continue sharing updates and practical guidance as Australia moves toward implementing Tranche 2. Understanding whether you are caught by the reforms is the first step in preparing your business for the changes ahead.
\nDisclaimer: The information provided is general in nature and is not legal advice. Tranche 2 reforms are still progressing, and requirements may change. Before making decisions or taking action, please refer to AUSTRAC’s official guidance or seek independent professional advice.
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