Commonwealth’s AML/CTF Tranche 2 reforms

By now, most firms will have seen the Commonwealth’s AML/CTF Tranche 2 reforms, which extend reporting obligations to lawyers, accountants, conveyancers and certain other advisers, where they are providing “designated services”, from 1 July 2026.

Some accounting practices may be affected where their work moves beyond tax and compliance advice and into transaction implementation, structuring or client asset work. The designated services framework may be relevant to activities such as:

• establishing or restructuring companies, trusts and SMSFs;

• assisting with business sales, acquisitions and restructures;

• supporting equity raises, loans and refinancing arrangements;

• receiving, holding or directing client funds for a transaction;

• company, trust and family group administration; and

• tax structuring connected to those transactions.

For firms acting for SMEs, family groups and private clients, many matters that once involved a standard engagement process will now require customer identification, beneficial ownership checks, ongoing due diligence and transaction monitoring.

At Jenkins Legal & Advisory, we have spent much of this year preparing for the regime. Our AML/CTF framework, governance structure, onboarding procedures and InfoTrack-based workflows are now in place. We have also worked through the practical issues that arise when multiple advisers are involved in the same transaction.

AML/CTF Reliance Arrangements

The AML/CTF framework allows one reporting entity to rely on aspects of another reporting entity’s customer due diligence where there is a properly documented reliance arrangement. The relying party still remains responsible for its own compliance obligations, but does not need to repeat work already completed.

Where both an accountant and JLA are involved in a matter, a reliance arrangement allows:

• the firm with the primary client relationship to undertake the client due diligence;

• the other firm to rely on that work rather than duplicate it;

• the client to avoid repeated requests for identification and source-of-funds material; and

• the transaction to progress without unnecessary delay.

For firms regularly involved in restructures, business sales, succession planning and financing work, these arrangements are likely to become part of ordinary transaction management.

If your business is considering Commonwealth’s AML/CTF Tranche 2 reforms, or changes to employee roles, contact Jenkins Legal and Advisory for tailored advice before taking further steps.

This article is not legal advice and the views and comments are of a general nature only. This article is not to be relied upon in substitution for detailed legal advice.

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