Australia’s next transparency leap: a public beneficial ownership register — and what Tranche 2 entities should do about trusts now
Australia is moving decisively toward greater corporate transparency. Treasury’s latest policy specifications outline a Commonwealth‑operated beneficial ownership register for unlisted companies, with access expanding in stages and early policy development underway for beneficial ownership regimes covering trusts. For Tranche 2 sectors (real estate, lawyers, accountants, and trust & company service providers), this shift aligns with global trends and will materially change onboarding of complex structures — especially trusts that commonly hold Australian real estate.
Transparency International Australia has welcomed the Government’s plan to “lift the veil” on corporate ownership by moving to a public register, emphasising the reform’s importance for due diligence, cost savings for SMEs, and Australia’s FATF evaluation. Implementation is expected to dovetail with broader registry stabilisation work, with public availability targeted after the first stage.
Why this matters: Tranche 2 is coming fast
Parliament passed the Anti‑Money Laundering and Counter‑Terrorism Financing Amendment Bill 2024, extending AML/CTF obligations to Tranche 2 entities and setting transition dates: enrol with AUSTRAC by 31 March 2026 and comply from 1 July 2026. AUSTRAC’s reforms guidance confirms new obligations for real estate professionals, lawyers, accountants, TCSPs, and others.
Concurrently, enhanced corporate transparency — including a beneficial ownership register — will reduce blind spots in customer due diligence (CDD), help firms “follow the money,” and strengthen Australia’s alignment with FATF Recommendations 24 and 25 ahead of the 2026–27 mutual evaluation.
The register: what’s changing for unlisted companies (and why trusts are next)
Treasury’s specifications propose that unlisted companies collect, verify and record beneficial owner information, with self‑identification obligations for beneficial owners and ASIC enforcement powers (including freezing orders) where disclosure fails. Stage 1 access prioritises journalists, academics, AML/CTF reporting entities, regulators and law enforcement, with broader public access envisaged when the Commonwealth‑operated register goes live.
Crucially for onboarding chains, the definition now aligns to 25% ownership or voting rights and captures significant influence or control — and companies must trace through to a registrable beneficial owner, including across trusts. Where a trust appears, the trustee must disclose detailed information on trustees, beneficiaries, appointors/protectors, settlors (with professional advisers below $1,000 excluded), and any person with powers to remove/appoint trustees or control trust property. For discretionary trusts, trustees must identify persons who received distributions in the last three years, are likely to receive a distribution, or exert significant influence.
AUSTRAC’s 2024 National Risk Assessment underscores how limited visibility of ultimate beneficial owners creates significant money‑laundering vulnerabilities — particularly in channels like real estate — reinforcing why corporate and trust transparency are being prioritised.
Trusts: Australia’s most practical onboarding challenge for Tranche 2
Why trusts are hard to onboard today
Real estate is often held via trusts (including discretionary, unit and fixed trusts), and the beneficiaries or controllers may be layered behind multiple trusts or entities, creating extended chains for KYC/KYB. FATF’s updated guidance stresses the need for adequate, accurate and up‑to‑date beneficial ownership information for express trusts and similar arrangements, with mechanisms to verify and access this data.
In Australia, trust information cannot be sourced from a single independent public register like ASIC; onboarding teams must obtain documents directly from the client/trustee, such as trust deeds (and variations), trustee resolutions, schedules of beneficiaries, appointor/protector details, and distribution records. Treasury’s trust trace‑through parameters formalise that trustees bear verification obligations because beneficiaries may not even be aware of their interests.
Layering (trust‑within‑trust, plus companies and partnerships) means reporting entities must continue to trace through non‑registrable entities until they reach a registrable beneficial owner that satisfies disclosure requirements.
What’s getting easier over time
As Australia builds the beneficial ownership register and considers trust regimes, Tranche 2 entities will gain more reliable access to validated data across corporate chains, narrowing the scope of documents they must manually chase. Transparency International Australia argues that a public corporate transparency register materially improves due diligence efficiency and outcomes.
Australia’s trajectory mirrors the EU’s post‑2022 pivot toward high‑quality data
After the CJEU’s 2022 ruling curtailed fully public access to EU beneficial ownership registers, the EU’s new AML package (AMLD6 + AML Regulation + AML Authority) aims to standardise access via legitimate interest, machine‑readable data standards, and interoperability — with default legitimate‑interest access for journalists, academics, NGOs and obliged entities. That balance between privacy and transparency is informing Australia’s staged approach and eventual public register.
Practical steps: onboarding corporate/trust structures under Tranche 2
1) Map the ownership & control chain (end‑to‑end).
Use a structured KYB/KYC workflow to identify natural persons with ≥ 25% ownership/voting rights or significant influence/control, and continue trace‑through for trusts, partnerships, associations and co‑ops until you reach a registrable beneficial owner.
2) Raise your trust documentation standards.
Request (from the trustee/client): the executed trust deed and all variations, trustee appointment/removal instruments, appointor/protector clauses, beneficiary schedules, distribution history (3 years) for discretionary trusts, unit registers for unit trusts, and evidence of fixed entitlements for fixed trusts. Validate settlor information (subject to professional‑advisor exclusion and <$1,000 threshold) and identify any person empowered to direct or control trust property.
3) Align CDD to AUSTRAC’s timelines and expectations.
Prepare to enrol by 31 March 2026 and comply from 1 July 2026, with initial and ongoing CDD, SMR reporting, and seven‑year record‑keeping. Start training teams on risk‑based assessments, customer risk scoring, and enhanced due diligence for higher‑risk scenarios (politically exposed persons, offshore arrangements, complex layering).
Key takeaways for Tranche 2 sectors (especially real estate)
Real estate is repeatedly highlighted as a high‑risk laundering channel; transparency reforms and Tranche 2 obligations are designed to close due diligence gaps in property transactions held via layered trusts and companies.
The beneficial ownership register will progressively provide trusted data about who really owns and controls corporate entities, reducing reliance on client‑provided documents alone — and Australia is exploring trust transparency to prevent regulatory arbitrage.
Australia’s approach is consistent with FATF R.24/R.25 and comparable to the EU’s push for standardised, machine‑readable, interoperable BO data under legitimate‑interest access.
How AML Advisers can help (and what to do next)
Trust‑ready onboarding playbook: We’ll tailor checklists, templates and escalation paths for discretionary, unit and fixed trusts — including appointor/protector mapping and distribution‑history analysis.
CDD uplift for Tranche 2: Program design, customer risk scoring, training, and SMR process design to meet AUSTRAC’s 2026 deadlines.
Extensive CDD training: We can assist with tailored AML training for the types of individuals, corporate entities or trusts which you provide designated services to.
Contact us directly via the Contact page on our website or schedule your free, no-obligation call with AML Advisers today to see how we can assist with your Tranche 2 preparations!
