Why we're here: the reforms and money laundering
The reforms & money laundering, explained simply
In this module, you'll be able to
- Explain in plain words what money laundering is and its three stages
- Say why accountants are now regulated (Tranche 2) and what problem it fixes
- State the key dates that apply to your firm
- Describe the duties that follow at a high level
This module's tools & templates
Lesson 1 of 3
What is money laundering?
It’s making money that came from crime look legitimate.
Money laundering is how criminals take money from crime — drugs, fraud, scams, tax evasion, corruption — and make it look honest. If they can’t clean it, they can’t safely spend it. It usually moves through three stages, and it helps to see each through an accountant’s eyes:
Placement
Dirty cash enters the system — deposits, buying assets. You might notice: a client pushing large amounts of cash with no clear reason.
Layering
Moving it around to hide the trail — companies, trusts, transfers overseas. You might notice: complex structures with no real business reason.
Integration
It returns looking clean — loans, dividends, asset purchases. You might notice: buys that don’t fit what you know about the client.
Lesson 2 of 3
Why are accountants covered now?
Criminals need professionals to build and run the structures that hide money — companies, trusts, nominee setups. It’s because accountants are trusted and skilled that their services are useful to launder through. AUSTRAC has named accountants among the professionals criminals use in Australia, so bringing them in closes a long-standing gap.
Tranche 1 vs Tranche 2 — in 60 seconds. The AML/CTF laws have covered banks, casinos and remitters (“Tranche 1”) since 2006. “Tranche 2” — accountants, lawyers, real-estate agents and precious-metal dealers — was promised for years but never delivered, leaving Australia as one of the last major economies not to cover these gatekeepers. The AML/CTF Amendment Act 2024 finally extended the laws to cover them.
The goal
Three things at once: meet global standards, cut off the professional help criminals rely on, and protect the professions themselves — a firm used to launder money without knowing suffers real harm.
Lesson 3 of 3
Your key dates
The full timeline runs from the 2024 Act through to commencement. Two dates matter most for your firm:
Enrolment opens 31 March 2026, and your AML/CTF program should be in place by 30 June 2026 — so the work starts well before July.
Activity
Spot the stage
Tap the stage each example belongs to. The point isn’t to become an investigator — it’s to notice when something doesn’t add up.
A new client insists on paying a large fee in cash and is vague about where it came from.
Right — cash entering the system is placement.
A client asks you to set up four companies and two trusts, move money between them, then close two down within months — with no business reason.
Right — churning through structures to blur the trail is layering.
A client with a modest income suddenly buys a property with a “loan” from an overseas company they control.
Right — money returning as “clean” wealth is integration.
Worked example
Meet Riverside Advisory
The firm we’ll follow all course
Riverside Advisory is a 6-person suburban practice — two partners, three accountants, one admin. It prepares tax returns and BAS (not designated services), but it also sets up 15–20 companies and trusts a year, lets ~30 client companies use its office as their registered office, and now and then holds settlement money in a trust account.
Verdict: Riverside is clearly a reporting entity — a business these laws apply to. Every later module puts this firm into a real situation. (We show why in Module 2.)
What’s coming
Your duties at a glance
If you provide a designated service (Module 2 settles whether you do), the law requires you to:
- Enrol — sign your firm up with AUSTRAC (Module 3).
- Have an AML/CTF program — your written plan (Module 4).
- Do customer due diligence — check who your client really is, before you act (Module 5).
- Rate the risk and keep watching it (Module 6).
- Report suspicious matters and large cash to AUSTRAC (Module 7).
- Keep records for seven years.
Knowledge check
Answer all 5 questions. You need 80% to pass — retakes are allowed, and the explanation appears after each answer.
1. Money laundering makes money that came from crime look legitimate.
Why: That is exactly what laundering does. It disguises the proceeds of crime so they look like they came from a legitimate source.2. The three stages of money laundering are placement, layering and ______.
Why: Placement gets the cash into the system, layering hides the trail, and integration brings the now 'clean' money back as apparent legitimate wealth.3. Accountants were brought under the AML/CTF laws as part of:
Why: Tranche 1 covered banks, casinos and remitters from 2006. Tranche 2 extends the regime to accountants, lawyers, real estate agents and dealers in precious metals and stones.4. Obligations for accountants commence on:
Why: Newly regulated (Tranche 2) firms must comply from 1 July 2026. Enrolment then closes on 29 July 2026.5. Preparing a tax return is a designated service.
Why: On its own, preparing a tax return is not a designated service. Module 2 covers exactly which services are caught.
Key takeaways
You’ve finished Module 1
- Money laundering makes criminal money look legitimate — placement, layering, integration.
- Accountants are covered because of the structures they build and the money they handle — and the laws also protect the profession.
- Tranche 2 closed a long-standing gap; duties start 1 July 2026, enrolment closes 29 July 2026.
- The duties ahead: enrol · program · CDD · risk · monitor · report · records.