Combating Money Laundering & Terrorism Financing

Is Tranche Two on Australia’s AML/CTF Horizon?

Forensic & Litigation Consulting

July 11, 2018


It’s been more than ten years since the arrival of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (“AML/CTF” Act) in Australia. The Act regulates how certain types of businesses manage the risks of money laundering and terrorism financing.

It’s becoming likely the next phase of legislation – known as ‘tranche two’ – that will amend the AML/CTF Act to place obligations on a broader range of businesses may appear in 2019. So, who will be affected by tranche two, and what does this mean for businesses that have previously never had to think about money laundering or terrorism financing risks?

What is ‘tranche two’ and who will it affect?

The Australian Government recently concluded a feasibility study into broadening the AML/CTF Act to include a number of additional designated services, known as tranche two. Tranche two will likely extend the legislation to include “designated non-financial businesses and professions” who, unwittingly or otherwise, can be used to enable the laundering of money or the financing of terrorism.

Below we briefly summarise some of the money laundering and terrorism financing risks faced by certain non-financial businesses and professions.

Designated non-financial businesses and professions

Lawyers, conveyancers, accountants, trust and company service providers

Known as ‘gatekeepers’, these service providers can be used to disguise money laundering and terrorism financing through the misuse of legitimate financial and corporate services. They have the potential to, intentionally or unintentionally, hide the true ownership or control of funds or assets and can also misrepresent the source of funds or the true purpose of transactions.

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