Important update for our clients ahead of 1 July 2026

From 1 July, the Tranche 2 AML/CTF reforms bring accounting firms into the Federal Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) regime for the first time. Like banks and financial institutions, accounting firms are legally classified as frontline gatekeepers against financial crime, by providing ‘designated services’. These now require us to verify our clients’ identities more extensively, conduct ongoing due diligence and meet new reporting obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006.⁠ ⁠ What this means for you:⁠

• We will need to verify your identity at the start of every new client appointment (and confirm details for existing clients). We are unable to provide any advice or act for you until this has been completed.⁠ This will require you to show valid identification prior to your appointment.
• Individuals: Government-issued photo ID (e.g., passport, driver’s licence) and proof of residential address.
• Companies & Trusts: Details of beneficial ownership, the nature of business operations, and verification of who controls the entity.
• We are required to ask additional questions about our client’s source of wealth, source of funds, and the purpose of complex business or trust structures. Accountants are required to continuously monitor client activities and transactions to ensure they align with the firm’s knowledge of the client’s business.
• If accountants spot inconsistencies, unusual behaviour, or transactions that don’t match the client’s profile, they are legally obligated to investigate and potentially submit a Suspicious Matter Report (SMR) to AUSTRAC. By law, accountants cannot inform or “tip off” the client that an SMR is being or has been lodged.
• Our records and verification processes are governed by AUSTRAC and will apply across the accounting profession nationally.⁠ We will be required to securely and meticulously retain all documented client identification, risk assessments, and transaction monitoring for seven years.
• To cover the additional time, technology and verification work these obligations require and place on our business, we will be allowing more time for each appointment, to ensure we are covering the obligations required.⁠

We appreciate your understanding and cooperation as we adapt to this important reform. ⁠ ⁠If you have any questions about how the changes affect you, please call our office to discuss.