Every compliance term you'll encounter under AUSTRAC Tranche 2, explained in plain English for real estate agents, conveyancers, and property developers.
The Australian federal law that requires certain businesses to identify their customers, monitor transactions, and report suspicious activity to AUSTRAC. Originally applied to banks and financial services (Tranche 1). From July 2026, extends to real estate agents, conveyancers, accountants, and lawyers (Tranche 2).
A written document that describes how your business will comply with AML/CTF obligations. It must be based on your ML/TF risk assessment, approved by your principal or board, and reviewed at least annually. Covers your CDD procedures, screening processes, reporting procedures, record keeping, and staff training plan.
Australia's financial intelligence agency and the regulator responsible for AML/CTF compliance. AUSTRAC collects reports from reporting entities (SMRs, TTRs, IFTIs), analyses financial intelligence, and enforces compliance. All Tranche 2 businesses must enrol with AUSTRAC before 29 July 2026.
Checking news sources and public records for negative information about a customer — such as criminal charges, fraud investigations, or sanctions. Used as part of CDD to identify potential risks that wouldn't show up in sanctions or PEP databases alone.
The person who has the power to appoint or remove the trustee of a trust. Under Tranche 2, identifying the appointor is part of trust CDD because they hold significant control over the trust, even without being a trustee or beneficiary. If the appointor is unknown, the trust is flagged as higher risk.
The natural person (human being) who ultimately owns or controls a customer entity. For companies, this means anyone who owns 25% or more of the shares or exercises significant control. For trusts, it includes the trustee, settlor, appointor, and beneficiaries. Identifying beneficial owners is a core CDD requirement — you must "look through" companies and trusts to find the real people behind them.
A day that is not a Saturday, Sunday, or Australian national public holiday. AUSTRAC deadlines (delayed CDD, SMR filing, TTR filing) are calculated in business days, not calendar days. This means weekends and public holidays don't count toward your deadline.
The process of verifying who your customer is before providing a designated service. Includes collecting identification (name, date of birth, address), verifying identity (biometric IDV or documentary check), screening against sanctions and PEP lists, and assessing risk. Must be done for every buyer, vendor, and associated entity.
The person responsible for day-to-day management of your AML/CTF program. They handle escalations, make decisions about suspicious matters, manage CDD reviews, and ensure ongoing compliance. Usually the principal, office manager, or a senior agent. Must be named in your AUSTRAC enrolment.
A provision that allows you to complete customer verification after starting a designated service, when completing it beforehand would disrupt the ordinary course of business. In real estate, this applies to auction buyers (who can't be verified before bidding) and exchange buyers. Delayed CDD must still be completed "as soon as practicable" — typically within 20 business days for auction buyers and 15 business days for exchange buyers.
A service that triggers AML/CTF obligations. For real estate agents, this includes: selling real property, buying real property, auctioning real property, and managing real property transactions. The obligation attaches when you provide the service, not when the transaction completes.
The Australian Department of Foreign Affairs and Trade's list of individuals and entities subject to sanctions. Includes people and organisations targeted under Australian autonomous sanctions, United Nations Security Council sanctions, and counter-terrorism laws. You must screen every customer against this list at onboarding and periodically thereafter.
Additional verification steps required for customers assessed as higher risk. Goes beyond standard CDD by requiring source-of-funds documentation, source-of-wealth verification, senior management approval, and more frequent ongoing monitoring. Triggers include: PEPs, high-risk countries, complex ownership structures, large cash transactions, and adverse media.
The process of registering your business with AUSTRAC as a reporting entity. Opens 31 March 2026, due by 29 July 2026. You'll need your ABN, business structure details, list of designated services, compliance officer details, and AUSTRAC Online access.
The process of confirming that a customer is who they claim to be. Can be done via biometric verification (photo ID + live selfie comparison) or documentary verification (checking government-issued ID documents). Biometric IDV is faster and more reliable. Part of the CDD process.
A report filed with AUSTRAC when funds are transferred into or out of Australia. For property professionals, IFTIs may be relevant when international buyers transfer funds from overseas to purchase Australian property.
The broader practice of knowing who your customer is. Encompasses CDD, identity verification, sanctions screening, PEP checking, and ongoing monitoring. KYC is the umbrella term; CDD is the specific regulatory process within it.
The equivalent of KYC for business entities — companies, trusts, partnerships. Involves verifying the entity's registration (ABN/ACN), identifying beneficial owners, understanding the ownership structure, and screening key persons against sanctions and PEP lists.
A formal assessment of the money laundering and terrorism financing risks your business faces. Must evaluate 5 risk dimensions: customer risk, service/product risk, geographic risk, delivery channel risk, and transaction risk. Your AML/CTF program must be based on this assessment. Required before you can generate your compliance program.
An individual who holds or has held a prominent public position — such as a head of state, government minister, senior military officer, judge, or senior executive of a state-owned enterprise. PEPs (and their close family members and associates) are considered higher risk because their positions may make them vulnerable to corruption. Requires Enhanced CDD.
A business that provides designated services and must comply with AML/CTF obligations. From July 2026, real estate agents, conveyancers, accountants, lawyers, and property developers become reporting entities and must enrol with AUSTRAC.
Checking a customer's name against sanctions lists to ensure they are not a sanctioned individual or entity. In Australia, the primary list is the DFAT Consolidated List. Some platforms also screen against UN, OFAC (US), and EU sanctions lists. Must be done at customer onboarding and periodically thereafter.
The person who creates a trust by contributing the initial property or assets. Under Tranche 2 CDD, you must identify the settlor, the nature and value of their contribution, and whether it was nominal (e.g. $10) or significant. A significant settlement (e.g. $100,000+) may indicate the settlor has ongoing interest in the trust's assets.
A report filed with AUSTRAC when you form a suspicion that a customer may be involved in money laundering, terrorism financing, or other serious crime. Must be filed within 24 hours for terrorism financing or 3 business days for other offences. Tipping off a customer about an SMR is a criminal offence.
Deliberately splitting a transaction into smaller amounts to avoid triggering a reporting threshold (e.g. making multiple $9,000 cash payments instead of one $27,000 payment to avoid the $10,000 TTR threshold). Structuring is a criminal offence and also triggers an SMR obligation — you must report the suspicious pattern.
Informing a customer (or anyone outside your compliance team) that you have submitted or intend to submit a Suspicious Matter Report to AUSTRAC. Tipping off is a criminal offence. This is why agents should never see SMR details, sanctions match alerts, or compliance trigger information — only the compliance officer and principal need access.
The second phase of Australia's AML/CTF regime, extending obligations to real estate agents, conveyancers, lawyers, accountants, and trust/company service providers. Passed into law in late 2024. Obligations commence 1 July 2026. AUSTRAC enrolment opens 31 March 2026.
A report filed with AUSTRAC when you receive $10,000 or more in physical cash (notes and coins) as part of providing a designated service. Must be filed within 10 business days. Only applies to physical currency — electronic transfers, cheques, and card payments do not trigger a TTR. If cash is deposited directly into your bank account, the bank files the TTR, not you.
An internal report raised when unusual or potentially suspicious activity is observed, before it escalates to a formal SMR. Agents typically raise UARs, which are then reviewed by the compliance officer to determine whether an SMR should be filed with AUSTRAC.
AMLTranche handles CDD, screening, SMRs, TTRs, and more — so you don't need to memorise the glossary.
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