AML/CTF Tranche 2 Compliance 2026: What Australia-India Businesses Must Do Now

If you are an accountant in Parramatta advising an Indian founder, a Melbourne lawyer handling a Bengaluru-to-Brisbane share sale, or a director in Pune setting up an Australian subsidiary, the way you onboard clients has changed. Since 1 July 2026, the AML/CTF Tranche 2 reforms have placed professions that were once outside Australia's anti-money laundering regime under AUSTRAC's supervision. On the Australia-India corridor, where ownership chains, remittances and documents routinely cross two legal systems, the impact is bigger than most people expect.

What Is AML/CTF Tranche 2?

Tranche 2 is the second phase of Australia's anti-money laundering and counter-terrorism financing (AML/CTF) reforms, enacted through the Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024. The original regime mainly covered banks, remittance providers and casinos. Tranche 2 extends it to "gatekeeper" professions that help clients move money, buy property and build corporate structures.

Who Is Now Regulated?

• Lawyers and conveyancers
• Accountants
• Trust and company service providers (TCSPs)
• Real estate professionals
• Dealers in precious metals and stones, which matters given the gold and diamond trade between Australia and India

Regulation attaches to specific "designated services", not to the profession as a whole. Examples include acting for a client in buying or selling real estate, managing client money or assets, forming or transferring companies and trusts, acting as a nominee director or shareholder, and providing a registered office address. Many firms will be caught by only some of their work, so mapping your services is the first job.

Key Dates to Know

• 31 March 2026: the reformed obligations for existing reporting entities began, and AUSTRAC enrolment opened for Tranche 2 businesses.
• 1 July 2026: Tranche 2 obligations commenced for the newly regulated sectors.
• Enrolment window: AUSTRAC set a deadline in late July 2026. If you have provided a designated service and have not enrolled, treat it as urgent and confirm your position on AUSTRAC's website.

Why Tranche 2 Matters for the Australia-India Corridor

Whether you are regulated directly or you are a client of a regulated professional, the corridor has features that raise the compliance workload.

• Layered ownership. An Australian Pty Ltd is often owned by an Indian parent, sometimes through an intermediate holding company in a third country. Your adviser must look through each layer to the real people behind it.
• Cross-border funding. Money moving from India is governed by Reserve Bank of India rules, and banks will want paperwork such as Form 15CA/15CB or overseas investment filings. Australian advisers will now ask for the same trail to confirm source of funds.
• Different ownership thresholds. Australian AML/CTF rules generally look for beneficial owners holding more than 25%. India's significant beneficial owner rules under the Companies Act use a 10% threshold. Your Indian records may already contain the data, but they must be mapped to the Australian test.
• Foreign documents. Indian company records, identity documents and board resolutions need to be verifiable and, where required, certified or translated. Both countries are members of the Apostille Convention, which simplifies acceptance of public documents.

Core Tranche 2 Obligations

1. Enrol With AUSTRAC

Every regulated business must enrol through AUSTRAC Online and keep its details current. Enrolment is a legal obligation, not a formality.

2. Build an AML/CTF Program Based on Risk

You need a documented money laundering and terrorism financing (ML/TF) risk assessment, plus policies and procedures that match it. Your governing body (the partners, directors or owners) must oversee the program, and you must appoint an AML/CTF compliance officer. The risk assessment should consider customer type, services, delivery channel and geography, including how Indian-linked clients and structures fit your risk profile.

3. Customer Due Diligence (CDD)

Before providing a designated service, you must identify and verify the customer, identify beneficial owners and anyone acting on the customer's behalf, and understand the purpose of the relationship. Ongoing CDD means keeping that information current and monitoring activity. Higher-risk customers, including politically exposed persons (PEPs), need enhanced due diligence. Screen Indian PEPs and sanctions lists as part of onboarding.

4. Reporting and Record-Keeping

• Suspicious matter reports (SMRs) to AUSTRAC when you suspect money laundering, terrorism financing or other serious offences, within strict timeframes.
• Threshold transaction reports for cash transactions of $10,000 or more.
• Tipping-off rules: you generally cannot tell a client you have lodged a report.
• Record retention: keep CDD and transaction records for seven years.

Practical Steps for Australia-India Businesses

If You Are a Regulated Professional

1. Map your services. List every service you provide and mark which are designated services.
2. Enrol with AUSTRAC and appoint your compliance officer.
3. Complete a written risk assessment that addresses India-linked clients, cross-border payments and complex ownership.
4. Standardise onboarding. Create a checklist for Indian individuals, Indian companies and trusts, covering identity, ownership charts, source of funds and source of wealth.
5. Set escalation triggers. Examples are unexplained third-party payments, nominee structures with no commercial reason, and ownership that cannot be traced.
6. Train your team and keep records of the training.
7. Review annually, and whenever your services or client base change.

If You Are an Indian Founder or Australian Subsidiary

Prepare a standing document pack so onboarding does not stall:

• Passports for all directors and beneficial owners, with proof of residential address
• Indian parent company records: certificate of incorporation, constitutional documents, current shareholder register and board resolutions
• An ownership chart showing every holder down to individuals with 25% or more, and any 10% SBO declarations you already hold
• Bank evidence of the source of funds for capital injections and loans, including Indian remittance paperwork
• Apostilled or properly certified copies, with certified English translations where needed

Common Mistakes to Avoid

• Copy-pasting a generic program. AUSTRAC expects a program tailored to your business and risks.
• Treating all India-linked clients as high risk, or none. Assess each client on the facts, then document your reasoning.
• Accepting unverified scans. Verify documents against reliable, independent sources.
• Assuming small means exempt. Size does not remove the obligation if you provide a designated service.
• Neglecting ongoing CDD. Ownership changes, and so do risk profiles.

Frequently Asked Questions

Does Tranche 2 apply to an Indian firm serving Australian clients?

It can, where the designated services are provided in Australia or have a sufficient Australian connection. Check your position against AUSTRAC guidance before assuming you are outside the regime.

Will my accountant or lawyer ask for more information now?

Yes. Expect requests for ownership charts, source-of-funds evidence and certified identity documents. Having them ready speeds up every transaction.

Get Tranche 2 Right From the Start

Tranche 2 is no longer a future deadline. It is the standard your advisers, banks and counterparties now work to, and businesses that prepare early will onboard faster and face fewer surprises. If you want a clear view of where you stand, from AUSTRAC enrolment to cross-border documentation, book a free 30-minute compliance call with CorpArray and we will help you build a practical plan.

This article is general information only and is not legal advice. Confirm current dates and requirements with AUSTRAC or a qualified adviser.

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