If your practice does anything with trust money, company structuring, or real estate settlements for clients, there is a compliance question sitting on your desk right now, whether or not anyone has told you about it.
On 28 August 2026, AUSTRAC announced it had begun issuing section 167 notices — compulsory information requests — to businesses it believes are providing a "designated service" under the Anti-Money Laundering and Counter-Terrorism Financing Act without having enrolled. Accounting and legal firms are named among the sectors receiving them. This is the first real enforcement signal since the second tranche of AML/CTF reform took effect, and it changes "I'll get to that" from a mild risk into an active one.
What actually changed on 1 July
The AML/CTF Act has regulated banks, remitters and casinos for years. The 2026 reforms — commonly called "Tranche 2" — extended the regime to professions that were never covered before. AUSTRAC's own account of the rollout states that commencement was staged: 31 March 2026 for entities already regulated under the old rules, and 1 July 2026 for the newly regulated sectors — named as legal, accounting, real estate and dealers in precious metals and stones, among others (AUSTRAC, "Regulatory expectations for the implementation of AML/CTF reforms"). AUSTRAC's own framing is that it does not expect perfection from day one, but it does expect businesses to be actively working toward compliance — a distinction that matters for what comes next.
Crucially, inclusion isn't automatic by job title. Grant Thornton's client alert on the new enforcement activity sets out what actually brings an accounting or legal practice into scope: providing one or more "designated services," which for professional firms can include assisting with certain real estate transactions, structuring trusts, companies or other legal arrangements, corporate restructures, equity or debt financing transactions, and holding or controlling client money or assets (Grant Thornton, "AUSTRAC commences issuing section 167 notices to newly regulated businesses"). A practice that only prepares tax returns, runs payroll, and reconciles bank accounts for clients, without touching trust structuring or controlling client funds, is working from a different starting point than one that manages a solicitor-style trust account or sets up companies on a client's behalf. Every practice needs to work out, specifically, which category it falls into — not assume either way.
The deadline that has already passed
Commentary from several firms that advise on AML/CTF compliance converges on the same practical deadline for businesses that began providing a designated service from day one: 29 July 2026, calculated as 28 days from the 1 July commencement date (Legl, "Tranche 2 is live: the 29 July enrolment deadline now facing Australian law firms"). If your practice determined months ago that it provides a designated service and enrolled, this is already behind you. If the question was never asked, that date has quietly gone past regardless.
Why August changed the stakes
A missed administrative deadline sitting quietly in the past is one thing. An active information request is another, and that is what arrived on 28 August.
AUSTRAC CEO Brendan Thomas announced that the agency had begun issuing section 167 notices to businesses that appear to be providing designated services without enrolling, warning plainly that "the time for preparation has passed" (Cowell Clarke, "The time for preparation has passed: non-enrolled Tranche 2 entities set to face AUSTRAC scrutiny"). The sectors named alongside accountants were real estate agents, lawyers, conveyancers, and trust and company service providers — bookkeepers were not named in this list, which is one reason the designated-services test matters more than the label on your door.
A section 167 notice itself is not an accusation. Legal commentary describes it as a formal, compulsory information-gathering notice that requires the recipient to provide specified information, documents or records relevant to AUSTRAC administering and enforcing the Act — and recipients must comply whether or not they turn out to be a regulated entity at all (Clyde & Co, "AUSTRAC takes compliance action in relation to Tranche 2 entities"). The same source notes that responses can be required in as little as 14 days, that providing false or misleading information is a separate offence carrying serious penalties, and that failing to comply with the notice at all is itself an offence with both criminal and civil consequences. None of that requires a finding that your practice has done anything wrong with client money — it only requires that AUSTRAC suspects you should have enrolled and didn't.
What to actually do this week
1. Make the designated-services call in writing, not from memory. List what your practice does for clients — tax, BAS, payroll, bank reconciliation, trust accounting, company formations, conveyancing support — against the designated-services categories above. Where the answer is genuinely unclear, that is a conversation for a lawyer who practises in this area, not a guess made under time pressure in response to a notice.
2. If you provide a designated service and haven't enrolled, enrol now. Late is better than not at all, and AUSTRAC's own messaging distinguishes businesses working toward compliance from those ignoring the obligation entirely.
3. Know what a notice would ask for before one arrives. Section 167 responses are about documents and records, not guesses. A practice that can show, quickly and accurately, what money moved through which client account and when, is in a materially better position to respond to any regulatory request than one piecing it together after the fact.
4. Don't let this get confused with bookkeeping software. This is a regulatory and legal compliance question about your practice's own obligations under the AML/CTF Act — customer due diligence, an AML/CTF program, suspicious matter reporting. No bank reconciliation tool, including ours, performs any of that, and treating accurate books as a substitute for actual AML/CTF compliance advice would be a mistake.
Where ReconLink does help, honestly: if your practice holds or moves client funds through a trust or clearing account, having that account reconciled continuously rather than discovered at quarter end means you already know, at any point, what moved and when — which is a better starting position for any compliance conversation than finding out retrospectively. That's a side effect of good bank reconciliation discipline, not an AML/CTF feature, and it doesn't substitute for proper advice on whether your practice is in scope.
Frequently asked questions
When did the Tranche 2 AML/CTF reforms start applying to accountants? AUSTRAC states that newly regulated sectors, including accounting and legal practices, came under the regime from 1 July 2026, with enrolment for these sectors opening from 31 March 2026.
Does every accounting practice need to enrol with AUSTRAC? No. Enrolment is required where a practice provides one or more "designated services" as defined under the Act — for professional firms this generally centres on trust and company structuring, certain real estate transactions, and holding or controlling client money or assets. A practice that does not provide any of these is working from a different starting point, but should document that assessment rather than assume it.
What is a section 167 notice? A compulsory, formal information request under the AML/CTF Act. AUSTRAC can use it to require documents or information relevant to deciding whether a business should be enrolled and whether it is meeting its obligations. It is not, by itself, a finding that anything has gone wrong.
What happens if a practice ignores a section 167 notice? Failing to comply is a separate offence under the Act, with both criminal and civil consequences, independent of whatever AUSTRAC eventually decides about the underlying enrolment question. Providing false or misleading information in response carries its own, more serious penalties.
Are bookkeepers in scope? The professional sectors named in AUSTRAC's August enforcement announcement were accountants, lawyers, real estate agents, conveyancers, and trust and company service providers. Bookkeepers were not named among them. The designated-services test, not the job title, is what actually determines scope, so a bookkeeping practice that also handles trust money or structures entities for clients should still check its position.
Can bank reconciliation software make a practice AML/CTF compliant? No. AML/CTF compliance requires a formal program, customer due diligence processes, and suspicious matter reporting, none of which a reconciliation tool performs. Accurate, current books are useful supporting evidence if a question is ever asked, not a substitute for the underlying compliance work.
The short version
Tranche 2 brought accounting and legal practices into the AML/CTF regime from 1 July 2026, with a 29 July enrolment deadline for firms providing a designated service from day one. On 28 August, AUSTRAC moved from messaging to active enforcement, issuing section 167 notices to firms it suspects should have enrolled and didn't. Whether that applies to your practice depends on what you actually do for clients, not on your job title — work that out in writing this week, get advice if it's unclear, and don't mistake well-reconciled books for AML/CTF compliance.