The global fight against financial crime is intensifying, and the spotlight is now firmly on Designated Non-Financial Businesses and Professions (DNFBPs). As international standards evolve, so too do the regulatory frameworks in key financial hubs like Singapore and Australia. These nations are moving to close loopholes and align with global best practices, which means a significant shake-up for sectors previously not as heavily regulated.
What are DNFBPs?
DNFBPs are a diverse group of businesses and professions that, while not traditional financial institutions, are at risk of being exploited for money laundering, terrorism financing, and proliferation financing (ML/TF/PF). The list typically includes:
- Real estate agents and developers
- Dealers in precious metals and stones
- Lawyers and conveyancers
- Accountants
- Trust and company service providers
Historically, these sectors have faced less stringent anti-money laundering (AML) and counter-terrorism financing (CTF) requirements than banks. However, a growing understanding of how criminals use these professions to hide illicit funds is driving a wave of new regulations.
Singapore: Strengthening a Robust Framework
Singapore, a leading financial center, is continually enhancing its AML/CFT regime. The country has a well-established framework for DNFBPs, but new and upcoming requirements are raising the bar.
- Expanded Due Diligence: Singapore’s regulations require DNFBPs to conduct comprehensive customer due diligence (CDD). This includes not only identifying and verifying a customer’s identity but also, for higher-risk transactions, establishing the source of wealth and funds.
- Real Estate Focus: The real estate sector is a particular area of focus. Estate agents and real estate salespersons are required to perform due diligence on both their clients and unrepresented counterparties, screening them against sanctions lists and other databases.
- Suspicious Transaction Reporting (STR): A core obligation is the filing of STRs. DNFBPs in Singapore must report any reasonable suspicion of ML/TF/PF to the Suspicious Transaction Reporting Office (STRO), with legal protections for those who file in good faith.
- Ongoing Monitoring: Regulations also emphasize the need for ongoing monitoring of business relationships to ensure that the transactions are consistent with the customer’s profile.
Singapore’s approach is one of continuous improvement, with regulatory bodies like the Council for Estate Agencies (CEA) and the Monetary Authority of Singapore (MAS) providing guidance and updating rules to address emerging risks.
Australia: The “Tranche 2” Revolution
For years, Australia has been an outlier among developed nations, with its DNFBP sectors largely exempt from the full scope of AML/CTF laws. This is about to change with the long-awaited “Tranche 2” reforms.
- New Reporting Entities: From July 1, 2026, many DNFBPs will become “reporting entities” under Australia’s AML/CTF Act. This means they will be subject to the same obligations that have long applied to financial institutions.
- Key Obligations: The new requirements will demand that DNFBPs:
- Enrol and Register with AUSTRAC: Businesses will need to enrol with the Australian Transaction Reports and Analysis Centre (AUSTRAC), the country’s financial intelligence agency.
- Develop an AML/CTF Program: Each business must create a tailored program to identify, assess, and mitigate ML/TF risks.
- Customer Due Diligence (CDD): This is a cornerstone of the new regime. DNFBPs will need to verify the identity of their customers, including the ultimate beneficial owners of companies and trusts, and perform risk assessments.
- Reporting: Reporting entities will be required to file suspicious matter reports and potentially other reports for certain high-value transactions.
- Impact on Real Estate: The real estate sector, in particular, will see a dramatic shift. Agents will now be required to conduct ID verification for both sellers and buyers, a process that has previously not been a legal requirement.
- Lead-in Period: To help businesses prepare, AUSTRAC is providing a lead-in period. Enrolment for newly regulated sectors will open in March 2026, with the new obligations commencing a few months later.
The Bottom Line for Businesses
The message for DNFBPs in both Singapore and Australia is clear: compliance is no longer a “nice-to-have” but a legal and operational necessity. These upcoming changes will require significant investment in technology, training, and internal processes. Businesses that fail to adapt risk not only hefty fines and legal penalties but also severe reputational damage.
For firms in these sectors, the time to act is now. This includes:
- Conducting a thorough risk assessment of your business.
- Reviewing and updating your internal policies and procedures.
- Investing in technology solutions that can automate CDD, screening, and transaction monitoring.
- Training all relevant staff on the new requirements and red flag indicators of financial crime.
By embracing these changes, DNFBPs can not only ensure compliance but also build greater trust with their clients and contribute to a safer, more transparent global economy.