Australia is making a significant move to close long-standing gaps in its anti-money laundering and counter-terrorism financing (AML/CTF) regime. With the passage of the Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill, the country will soon require lawyers, accountants, real estate agents, and dealers in precious metals and stones to comply with robust AML/CTF obligations. These professions, often referred to as “gatekeepers,” have until now been exempt from the legal framework that governs financial institutions. This legislative update is designed to align Australia with global standards and avoid the risk of international grey-listing by the Financial Action Task Force (FATF).
The current AML/CTF framework has long been criticized for its failure to include these high-risk professional sectors, despite warnings dating back to 2015. FATF and other international observers have repeatedly flagged the vulnerability posed by the legal, accounting, and real estate sectors, which can be misused to conceal illicit wealth through complex structures, anonymous companies, and high-value transactions. Australia’s delay in implementing these changes placed it among only a handful of countries that had not yet addressed these risks in full.
Under the new amendment, approximately 90,000 new entities will be brought under AUSTRAC’s regulatory oversight beginning in 2026. These entities will be required to register, perform customer due diligence, monitor for suspicious activity, and report transactions that may be linked to money laundering or terrorist financing. The regime will also modernize certain aspects of compliance, such as the travel rule for virtual asset transfers and the reporting of international fund movements.
This expansion marks the long-awaited implementation of “Tranche Two” reforms, a term used to describe the second phase of Australia’s AML/CTF regime. The first tranche focused on banks and major financial institutions. The second tranche, now in motion, targets professions that have increasingly been implicated in financial crime investigations but remained outside AUSTRAC’s direct supervision.
Despite strong support from regulators and anti-financial crime advocates, the reforms have faced resistance from some in the legal and accounting professions. Concerns have been raised about compliance burdens, costs, and the potential conflict with legal professional privilege. The Law Council of Australia, for instance, has lobbied for exclusions and safe harbor provisions, especially in relation to legal advice and client confidentiality. However, government officials argue that without these measures, Australia’s financial system remains at risk and open to abuse by organized criminal groups.
Financial modeling by the Australian government estimates that the total cost of compliance across affected industries could reach approximately AUD 13.9 billion over ten years. However, the benefits of reducing money laundering and terrorism financing risks are also valued at nearly AUD 13.1 billion, making the reform economically justified.
The Albanese government has committed additional funding of AUD 160 million to AUSTRAC to support the rollout of the expanded regime and provide guidance to newly regulated entities. A phased approach has been adopted to allow time for adaptation, with enrollment required by March 31, 2026, and full compliance enforcement starting from July 1, 2026.
In the face of evolving global threats and increasingly complex financial crimes, Australia is taking a definitive step forward. The inclusion of gatekeeper professions in the AML/CTF net strengthens the country’s defense against illicit finance and moves it closer to international best practices. The reforms not only safeguard the integrity of the financial system but also send a clear message that Australia is no longer willing to be a safe haven for dirty money.
