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What even is a 'designated service'? And why the answer matters for your practice.

Published Week of 10 June 2026

If you've looked at the AUSTRAC guidance and hit the phrase "designated service", you're probably either confused or quietly hoping it doesn't apply to you. This post exists to answer the question your AUSTRAC reading raised but didn't quite resolve.

The phrase is doing a lot of heavy lifting in Tranche 2. Whether your practice is captured by the new AML/CTF laws depends entirely on whether you provide a designated service — not on how big your practice is, how long you've been operating, or what your letterhead says.

The plain-English version

A 'designated service' is a specific type of transaction or activity that AUSTRAC has identified as carrying meaningful money laundering risk. For accounting practices, the relevant designated services are listed in AUSTRAC guidance (see Table 6). Here's what that list actually means in practice:

In scope
Not in scope (on its own)
  • Setting up a company or trust for a client
  • Managing a client's bank account
  • Assisting a client to buy or sell property or a business
  • Acting as a director, shareholder, or trustee on behalf of a client
  • Providing a registered office address
  • Administering a SMSF where you hold or manage client funds or assets as part of a transaction
  • Preparing tax returns
  • Providing general business or financial advice
  • Bookkeeping only
  • Payroll processing
  • Preparing financial statements without managing funds

The catch most practices miss

The "not in scope" list is reassuring right up until you remember that most accounting practices do both.

If your practice provides even one designated service, AUSTRAC will treat your firm as a reporting entity — and the AML/CTF obligations apply to the whole practice, not just that one service.

In practical terms: the AML/CTF obligations usually apply across the practice, not just to the trust work. This is the point where most small practice principals look up from their screen and quietly say "oh."

What being a reporting entity means in practice

Once you determine you provide a designated service, you become a reporting entity from 1 July 2026. That means the full set of AML/CTF obligations applies:

  • Risk assessment
  • Written compliance program
  • Client identity verification
  • Staff training
  • Suspicious matter reporting

None of it is optional — but the obligations are scalable. AUSTRAC has published a starter kit designed specifically for small, low-complexity practices. 'Scalable' means you can apply controls proportionate to your risk profile. It does not mean you can skip steps.

Still not sure?

AUSTRAC's free eligibility checker walks you through your services in about five minutes. It's the fastest way to get a definitive answer: austrac.gov.au — check if you're regulated and need to enrol.

Free resource

Am I providing a designated service?
Use the free 5-minute Tranche 2 checklist.

A plain-English PDF that helps you confirm whether your practice is in scope — and what to do next.

  • ✓ Do my services count as designated services?
  • ✓ What does being a reporting entity mean in practice?
  • ✓ What's the fastest path to being audit-ready?
Send me the checklist

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Tranche 2 Checklist for Accounting Practices Free PDF

← Back to Issue 1: Do the new AUSTRAC laws actually apply to your accounting practice?