Australia will move to so-called tranche 2 reform of its anti-money laundering and counter-terrorism financing regime, if proposals detailed in a consultation paper released by Attorney-General Mark Dreyfus are adopted. Currently, AML/CTF law applies to financial institutions, money remitters, digital currency exchanges, gambling service providers and gold bullion dealers. Under tranche 2, the regime would be extended to professional service providers, such as lawyers, accountants, real estate agents, conveyancers, trust and company service providers, and dealers in precious metals and stones. Such a change has been a long time coming. In 2015, the Financial Action Task Force, the global AML/CTF watchdog and standard setter, released a review of the Australian regime, which included the finding that one of its shortcomings was that “professional groups did not demonstrate an adequate understanding of their AML/CTF risks or have measures to mitigate them effectively”. In 2016, The Statutory Review of the Anti-Money Laundering and Counter-Terrorism Financing Act recommended that Australia's regime should be extended to cover “other services” that pose ML/TF risk. Later that year, the then Minister for Justice Michael Keenan released The Statutory Review of the Anti-Money Laundering and Counter-Terrorism Financing Act. One of its recommendations was that the regime be extended to cover other services that pose AML/CTF risk.  And in March last year, the Senate Legal and Constitutional Affairs References Committee released a report on the adequacy of Australia’s AML/CTF regime, recommending that the government “accelerate its consultation with stakeholders on the timely implementation of tranche 2 reforms”. Dreyfus said in a statement that the government has accepted all the senate committee’s recommendations, which have been incorporated into the consultation paper. “Australia is now one of only five jurisdictions, including China, Haiti, Madagascar and the United States, out of more than 200 that do not regulate tranche 2 entities.” Dreyfus said. The case for including professional service providers in the AML/CTF regime has been made a number of times over the years. In July last year, FATF reported that real estate transactions pose high money laundering and terrorism financing risks and that effective implementation of its standards must include coverage of the sector. FATF said the purchase of real estate allows for the movement of large amounts of funds, all at once in a single transaction as opposed to multiple transactions of smaller value. Buyers and sellers do not usually have ongoing relationships, which makes it more difficult to identify patterns of suspicious activity. And in many countries there are only limited requirements to determine the beneficial ownership or source of funds behind the entity making the purchase. The Australian Banking Association said that as a result of FATF rating Australia as non-compliant in this area, Australian banks seeking international credit are required to provide additional information to satisfy investors that the country’s banking system is secure. The consultation paper also outlines proposals to simplify and streamline AML/CTF obligations. This is another overdue reform. The 2016 statutory review said the rules were too complex. “This complexity generates uncertainty, impeding industry's ability to understand and comply with its obligations,” it said. The proposed changes