Build a Risk-Based AML Program That Meets Tranche 2 Obligations
#Tranche 2, #AML Compliance, #Australia
Jan 20, 2025
3 Minutes
The introduction of Tranche 2 reforms under Australia’s Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Act marks a significant shift in regulatory obligations for Designated Non-Financial Businesses and Professions (DNFBPs), including lawyers, accountants, and real estate agents. These sectors must now implement a comprehensive and risk-based AML program that goes beyond box-ticking compliance and focuses on identifying, assessing, and mitigating financial crime risk.
A risk-based approach is central to modern AML compliance. It involves evaluating the level of money laundering and terrorism financing risk posed by each customer and applying appropriate controls based on the level of risk. This ensures that resources are allocated efficiently, and compliance efforts are proportionate to the risk involved.
A compliant AML/CTF program under Tranche 2 should include the following key elements:
While the legislation sets minimum standards, your AML program must be tailored to your business model and risk exposure. This includes:
Preparing for Tranche 2 requires more than a reactive mindset. A proactive and structured risk-based AML program will not only help meet new obligations but also strengthen your long-term compliance strategy. Organisations that act early are better positioned to manage transition risks, avoid penalties, and ensure operational readiness.
MemberCheck supports businesses through this process with efficient, automated solutions that streamline customer risk profiling, ongoing monitoring, and regulatory reporting. Our platform is designed to help you build a resilient and scalable AML program aligned with Tranche 2 expectations.
Start building your compliance framework today - because preparation is not just best practice; it’s essential.
Tranche 2 refers to the proposed expansion of Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) regime to include ‘designated non-financial businesses and professions’ (DNFBPs) such as lawyers, accountants, and real estate agents. It aims to close regulatory gaps and align Australia with global FATF standards.
Legal practitioners, accountants, real estate agents, precious metals and stones dealers, Trust and Company Service Providers, and other DNFBPs will fall under the scope of AML/CTF regulations once Tranche 2 is implemented.
Businesses must implement enhanced KYC procedures to verify customer identity, assess risk, and ensure ongoing monitoring, especially for high-risk clients.
Yes. RegTech solutions can automate customer due diligence, screening, and reporting, helping businesses comply efficiently and reduce human error.
Yes. Businesses will need to ensure employees are trained in AML/CTF obligations, internal procedures, and in identification and reporting of suspicious activity.
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