The civil and criminal penalties for non-compliance with AUSTRAC Tranche 2. What AUSTRAC can do, what the courts can do, and why size is not a defence.
Yes. AUSTRAC has a strong track record of enforcement against reporting entities of all sizes — not just large financial institutions. In recent years, AUSTRAC has taken action against mid-tier and smaller entities. The message from AUSTRAC is clear: size is not a defence.
The consequences of non-compliance with the AML/CTF Act range from infringement notices for minor breaches to criminal prosecution for serious or wilful non-compliance.
The most common mistake small practices make: Assuming that because they are small, AUSTRAC won't come after them. AUSTRAC has published guidance specifically for conveyancers and has flagged that it will be monitoring enrolment compliance from July 2026.
Providing a designated service without being enrolled with AUSTRAC is a breach of section 6 of the AML/CTF Act. It carries a maximum civil penalty of 10,000 penalty units per contravention. As of 2026, one penalty unit is $330, making the maximum per-contravention penalty $3.3 million for a body corporate (with different multipliers for individuals).
Every transaction you process after 1 July 2026 without being enrolled is a separate contravention. A practice handling 100 matters per year could face 100 separate contraventions.
Operating without a compliant AML/CTF Program is also a civil penalty breach. AUSTRAC can issue infringement notices, seek enforceable undertakings, or apply to the Federal Court for civil penalty orders.
Conducting a designated service without completing the required CDD is a breach of the Act. This includes starting work on a matter before identifying and verifying your client. For conveyancers, the risk is particularly acute because CDD must happen at engagement — not at settlement.
If you have reasonable grounds to suspect a transaction involves money laundering or terrorism financing and you fail to file a Suspicious Matter Report, you commit an offence under section 41 of the Act. This can carry criminal penalties.
Equally important: the AML/CTF Act prohibits tipping off — telling a client or third party that you have filed or are considering filing an SMR. Tipping off is a criminal offence under section 123 of the Act, with penalties of up to 2 years imprisonment.
AUSTRAC typically starts with education and guidance, especially in the first year of a new regulatory regime. However, it has demonstrated a willingness to escalate to formal action for persistent or serious non-compliance. AUSTRAC's powers include:
In addition to AUSTRAC penalties, non-compliance with AML/CTF obligations could constitute professional misconduct under your state's conveyancing legislation. State licensing bodies may take disciplinary action — including suspension or cancellation of your conveyancing licence — for serious failures to comply with AML/CTF law.
The cost of non-compliance — in financial penalties, reputational damage and professional risk — far exceeds the cost of getting compliant. SimpleAML makes the compliance process as straightforward as possible. The free app and templates take a few hours to set up. The penalty for not doing it can be devastating.
SimpleAML walks you through every step — practice profile, staff vetting, training, risk assessment, program and AUSTRAC enrolment. Browser-based, no account required.
Open SimpleAML for Conveyancers →