A comprehensive guide to AML compliance for conveyancers under Australia’s Tranche 2 reforms
Australia’s Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Tranche 2 reforms will extend AML obligations to professional service providers involved in property transactions.
Conveyancers play a central role in facilitating property settlements and ownership transfers, and as a result the sector has been identified as potentially vulnerable to financial crime risks.
From 1 July 2026, conveyancers providing designated services related to property transactions may become reporting entities under the AML/CTF Act.
Businesses captured under the reforms will be able to enrol with AUSTRAC from 31 March 2026, with AML compliance obligations commencing from 1 July 2026.
Further information is available from AUSTRAC:
AML/CTF Reform
Conveyancers coordinate the legal transfer of property ownership and manage important aspects of the settlement process.
This role may involve:
Because these transactions often involve large sums of money and complex ownership arrangements, regulators recognise that the sector may be exposed to money laundering risks.
Not all conveyancing work will necessarily trigger AML obligations.
However, services connected to property transfers may be considered designated services under the AML/CTF Act.
Examples may include:
Where these services are provided, AML obligations may apply.
Understanding financial crime risks is an important part of AML compliance.
Common risks in the conveyancing sector include the following.
Third-Party Settlement Payments
Settlement funds may be provided by individuals or entities unrelated to the buyer.
While legitimate in some cases, such arrangements may warrant additional scrutiny.
Complex Ownership Structures
Properties may be purchased through companies or trusts that obscure beneficial ownership.
Multiple layers of corporate ownership can make it difficult to identify the individuals who ultimately control the asset.
Cross-Border Transactions
Funds used in property settlements may originate from overseas jurisdictions.
Jurisdictions with weaker AML controls may present higher financial crime risks.
Unusual Transaction Arrangements
Changes to settlement structures or payment arrangements may indicate attempts to conceal the origin of funds.
Where conveyancing businesses are captured under the AML regime, they may need to implement several key compliance measures.
These typically include:
AML Compliance Lifecycle for Conveyancers
Risk Assessment
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AML Compliance Program
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Customer Due Diligence
↓
Transaction Monitoring
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Suspicious Matter Reporting
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Ongoing Compliance Review
Customer Due Diligence for Conveyancers
Customer Due Diligence ensures that businesses understand the identity of their clients and the nature of the transaction.
CDD procedures may involve:
CDD should generally be completed before providing a designated service.
AUSTRAC guidance:
Customer Due Dilligence (Reform)
Monitoring Settlement Transactions
Conveyancers should monitor property transactions for unusual activity.
Examples of potential red flags include:
When unusual activity is identified, businesses should conduct further review.
Suspicious Matter Reporting
If a business forms a suspicion that a transaction may involve money laundering or terrorism financing, it may be required to submit a Suspicious Matter Report (SMR) to AUSTRAC.
Further information on reporting obligations is available here:
Reporting
Preparing for AML compliance requires conveyancers to review their services and operational processes.
Preparation may involve:
Early preparation allows businesses to integrate AML compliance into existing workflows.
Bravishi Advisory works with conveyancing firms to translate regulatory requirements into clear operational structures.
This may include:
