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Tranche 2 builds on the foundation laid by the initial AML/CTF regime that came into force in 2016 and which focused primarily on financial institutions and casinos. The latest reforms are designed to address the growing threat of money laundering and terrorist financing through the real estate sector and associated professions. Because of the position of trust they hold, money launderers may target law firms, for instance. They often handle large amounts of money confidentially for their clients, including escrow on sale transactions. As a result, using a solicitor's client account can give criminals a way to enhance the credibility of transactions.

Alongside CPA Australia and the Institute of Public Accountants, they reiterated the willingness of the accountancy profession to join efforts to prevent, detect, and report money laundering and the financing of terrorism. However, the accounting professional bodies stressed that the implementation of tranche 2 should “harness, not duplicate, existing obligations on professional accountants.”

Tranche 2 will have a major impact on Australia’s real estate industry. Real estate transactions involving high-value properties have been attractive to money launderers for a long time as they try to legitimise their illicit funds. Under new laws, real estate agents must perform extensive background checks on buyers and sellers, which will lead to an increased administrative burden, longer transaction times, and potential financial costs for compliance.